Britain urges China to 'step back from the brink' on Hong Kong
- London | Britain has urged China to "step back from the brink" in its controversial imposition of a national security law on Hong Kong, with Foreign Secretary Dominic Raab promising "further response" if Beijing doesn't turn back.
- Britain has already flagged that it's prepared to offer open access to its shores for up to 350,000 Hong Kong citizens holding a special British national overseas (BNO) passport.
- Mr Raab was under pressure after a group of seven of his predecessors as foreign secretary, from both sides of politics, wrote to him on Monday urging Britain to take the lead on defending Hong Kong.
- This kept to a pattern under successive Conservative governments since 2010, which sought to balance national security concerns against economic interests - especially after Beijing froze diplomatic relations with London for more than a year in 2012 because then PM David Cameron had met the Dalai Lama.
Death, mayhem, recession: what can stop this rally?
- There is a daily drip-feed of bad news but the rally rolls on despite the risks from US-China trade tensions and the explosion of violence on US streets.
- There's still 3,000 people a day dying around the world from COVID-19, violent protests are spiralling out of control in the US, and renewed tensions between Washington and Beijing threaten a trade war redux at a time when the global economy can ill afford the world's two heavyweights shirt-fronting each other.
- Playing ball would not only provide an official imprimatur on the trivialising of the world's second largest economy in global economic relations, but also risk antagonising Beijing at a time when Australia is in the diplomatic deep freeze.
- The second risk is the US protests may derail the prospective recovery in the world's largest economy.
US mayhem a gift to China's propaganda machine
- Blanket coverage of US unrest in China's state-controlled media has become a timely propaganda tool for Beijing as it seeks to justify its Hong Kong crackdown.
- Shanghai | The ugly scenes of riots and violent protests in the United States have delivered China's Communist Party an unplanned propaganda victory at a time when it needs it most.
- China's state-controlled media has been saturated this week with images of looting, burning buildings and the heavy-handed police response to mass protests triggered by the death of African-American man George Floyd.
- China has repeatedly claimed that "foreign forces" led by the United States were behind the mass demonstrations in Hong Kong last year.
- There was, however, some coverage last year when the protests turned particularly violent, which allowed Beijing to justify last week's decision to impose its own national security laws on Hong Kong.
Boris Johnson's Brexit nightmare is back at the worst possible moment
- And if the UK wants tariff-free access to it after the transition period transpires -- as was Johnson's position last autumn when he struck an initial Brexit deal with the EU -- then the EU will need it to sign up to those rules.
- This level of insouciance is not uncommon across the EU's institutions, where an official working on the negotiations said with a shrug that "the UK is free to do whatever it wants" and that Brussels is prepared for a "stalemate" at the end of June.
- So if Boris Johnson is serious about wanting to avoid no deal, the combination of the talks being frozen, both sides being distracted by a pandemic and this pressing June deadline makes for a hellish start to the summer.
The Fed Can't Prop up the Housing Market Forever
- While generous forbearance regulations were preventing millions of homeowners from defaulting on their loans, the Federal Reserve’s unprecedented creation of dollars earmarked for mortgage-backed securities (MBS) was driving down interest rates.
- So effectively, in fact, that it triggered $5 billion in margin calls on routine hedges lenders place against rising interest rates.
- That’s in addition to the tens of billions of dollars that lenders say expanded forbearance access will cost the mortgage industry.
- The long-term effects of these forbearances and margin calls are equivalent to housing market lenders bailing out borrowers on the same scale as the 2008 financial crisis and Trump trade war bailouts combined.
- But holding interest rates down with MBS purchases is heating up another asset bubble in the housing market.
- The Federal Reserve is deploying massive monetary firepower to keep mortgage rates low and home prices rising.
Trump refuses to release economic update amid virus losses
- Stocks are opening lower on Wall Street as traders worry that trade tensions could flare again with China and as protests spread across the US against police brutality, potentially threatening more outbreaks of the coronavirus.
- The White House has taken the unusual step of deciding not to release an updated economic forecast as planned this year, a fresh sign of the administration's anxiety about how the coronavirus has ravaged the nation just months before the election.
- The decision, which was confirmed Thursday by a senior administration official who was not authorised to publicly comment on the plan, came amid intensifying signals of the pandemic's grim economic toll.
- But the delay of the updated midyear economic forecast, typically released in July or August, was an indication that the administration doesn't want to bring attention to the pandemic's impact anytime soon.
Posthaste: Racial divide, trade tensions, pandemic and unemployment carnage — yet markets rally on ‘reopening joy’
- Scotiabank expects the Labour Force Survey to register another one million drop in total employment and a 16 per cent unemployment rate.
- IHS Markit’s manufacturing purchasing managers index for May today will underscore the decline in that sector, while Thursday’s trade figures for April will likely register a wider trade deficit in the peak of the shutdown period.
- The Canadian Imperial Bank of Commerce analysts expects Canadian unemployment rate to climb down more slowly than the United States.
- U.S. stock index futures slipped early Monday, but are now in positive territory suggesting a higher opening amid unrest in major American cities that will only delay reopening of the wider economy.
- Stephen Poloz first dreamed of becoming Bank of Canada governor in 1974, when he got hooked on economics as an undergrad at Queen’s University in Kingston, Ont. Thirty-nine years later, it happened.
China said to halt some U.S. farm imports of soybeans, pork as tensions escalate
- Chinese government officials told major state-run agricultural companies to pause purchases of some American farm goods including soybeans as Beijing evaluates the ongoing escalation of tensions with the U.S. over Hong Kong, according to people familiar with the situation.
- The measures to halt imports come after President Donald Trump on Friday lobbed a barrage of criticism at Beijing after it moved to impose controversial new national security legislation on Hong Kong.
- They had been making pricing inquiries for 20 to 30 cargoes of U.S. soybeans on Friday but held off on going through with purchases after Trump indicated he would punish Chinese officials, one of the people said.
- However, the coronavirus outbreak roiled those plans, with China only managing to import $3.35 billion in American agricultural products in the first three months of the year, the lowest for that period since 2007, according to data from the U.S. Department of Agriculture.
Global stocks pull back from gains on reports China is halting key agricultural imports such as soybean from the US
- Stocks reversed earlier gains after major state-owned Chinese agricultural companies have reportedly halted purchases of US products including soybeans and pork, Bloomberg reported as Beijing evaluates its response to growing tensions with the US.
- Agricultural goods were considered a lifeline to the phase one trade agreement between the US and China, especially after Beijing pledged to step up purchases of agricultural goods in order to calm the rising tension between the two nations.
- On Friday, the Trump administration responded by listing a spate of ways it would alter its relationship with Hong Kong by announcing plans to investigate Chinese companies on US stock exchanges and sanction individuals involved in enforcing the new Hong Kong security measures, but fell short of scrapping trade talks with China altogether.
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