Global News 10/07/2015

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  2. Global News 10/07/2015

The New York Times

Greek Plan Accepts Austerity to Get Debt Relief: Only a day after grim predictions of financial and social collapse in Greece, a scramble appeared underway to work out the details of a new bailout package to bring the country back from the brink of falling out of the euro.

As details of the new offer emerged, it appeared that Prime Minister Alexis Tsipras was capitulating to demands on harsh austerity terms that he urged his countrymen to reject in the referendum last Sunday, like tax increases and various measures to cut the costs of pensions. It is still too early to gauge whether this prospective bailout will be any more effective than earlier pacts in balancing the demands of the creditors against some relief from austerity.

China’s Efforts Fail to Contain Market Plunge: As the Chinese stock market slumps, the country’s government has stepped in boldly, unveiling a series of measures to prop up shares. But those efforts have done little to stabilize the market, with stocks continuing to slide on Wednesday. The losses create a political and economic challenge for the nation’s leadership.

Beijing could face social unrest if the sell-off accelerates, since tens of millions of ordinary investors have plowed their savings into the market. The psychological toll on investors, in turn, could erode consumer confidence, dragging down growth in the already slowing economy.

Trans-Pacific Partnership’s Potential Impact Weighed in Asia and U.S: The Obama administration has been pushing the trade pact as a way to write new rules not just for the 12 nations involved but also as an umbrella to someday cover many other countries — above all, China.

One set of provisions requires that state-owned enterprises become less secretive and receive fewer government subsidies in the form of low-rate loans, cheap or free land and other assistance. The clause is initially aimed at Vietnam — as well as Malaysia and Singapore to some extent — but it offers a signpost for the direction in which the United States wants China to move.

Jobless Claims Jump to Highest Level Since February: The number of people seeking unemployment benefits rose last week to the highest level since late February, but the increase was probably more the result of temporary auto plant shutdowns than any underlying labor market weakness. The number of people filing applications for unemployment benefits rose by 15,000 to 297,000, the Labor Department reported Thursday. That is the highest weekly total since 327,000 applications were filed in the week of Feb. 28.

Bloomberg News

France Hails Greek Proposals as Tsipras Seeks Lawmaker Support: France praised a package of measures proposed by Greece, as lawmakers in Athens prepared to debate whether to support Prime Minister Alexis Tsipras’s plan to access a bailout of at least 53.5 billion euros ($60 billion).

The packet of spending cuts, pension savings and tax increases was being studied on Friday by the European Commission, the International Monetary Fund and the European Central Bank after it was submitted late the previous day.

Euro Climbs Most in Two Years Versus Yen on Greece’s Bailout Bid: The euro advanced, climbing the most against the yen in more than two years, after Greece proposed a package of spending cuts and tax increases aimed at securing a bailout and avoiding being pushed out of the currency union.

After months of abortive talks, which sent euro-dollar volatility soaring to the highest since 2012, Greece offered to meet most of the demands of its creditors in exchange for a 53.5 billion-euro ($60 billion) rescue package. The yen weakened at least 0.5 percent against all of its major peers as the news from Europe and a rally in Chinese stocks damped demand for haven assets.

IEA Says Oil May Fall Further Before Supply Growth Slows: Oil prices may fall further as the world remains “massively oversupplied,” before markets tighten in 2016 when output growth outside OPEC grinds to a halt, according to the International Energy Agency.

There will be no overall production growth outside the Organization of Petroleum Exporting Countries next year for the first time since 2008, according to the IEA. Growth in U.S. shale oil supplies will stagnate to the middle of 2016 while output declines in Russia, the Paris-based adviser said in its first detailed assessment of the year ahead. Global oil demand growth will slow, the agency predicted.

Oil-producing nations around the world are reeling after OPEC initiated a strategy in November to defend its share of global markets by pressuring rivals to curb output. Oil prices, about 45 percent lower than a year ago, may need to decline further to reduce the supply surplus, the IEA said.

U.S., Europe Stocks Rally With Euro Amid Optimism in Greek Pact:  Global markets signaled growing faith in Greece’s ability to clinch a bailout, as U.S. and European stocks climbed for a second day and the euro jumped the most in more than two years against the yen.

The Standard & Poor’s 500 Index climbed 1.1 percent at 9:46 a.m. and the Stoxx Europe 600 Index headed toward its biggest two-day gain in three years. Spanish securities jumped with their Italian counterparts as Greek contagion risk subsided, while German bunds fell with the yen on reduced haven demand. The Shanghai Composite capped its first back-to-back gain since June 24 after the government banned insiders from selling stocks, with about half of listed companies halted.