Global News May 28, 2018

  1. BBC
  2. Global News May 28, 2018

“Risk Appetite Fades on Italy Outlook; Oil Slumps: Markets Wrap.”

Politics dominated markets on Monday, with risk appetite withering in Europe as Italy lurched toward fresh elections. The region’s shares and currency reversed early gains, while U.S. equity futures pared a jump even as the America-North Korea summit appeared to be back on track.
Most national gauges in Europe turned lower led by Italy’s benchmark, which plunged as populist leaders pulled the plug on their attempt to form a government and the country headed for new elections as early as the fall. The nation’s bonds also tumbled. S&P 500 futures, which jumped earlier alongside South Korean stocks, were fractionally stronger in muted trading — it’s a holiday in both the U.S. and U.K. Oil losses deepened after Saudi Arabia and Russia said they are discussing reviving output.
It had looked like a positive start to the week for global equities following a tumultuous few days, but investor concerns were never far away. U.S. negotiations with North Korea have proved unpredictable, and while the failure of populist leaders to form a government in Italy removes a threat to the euro area for now, it raises the prospect they will cement their power in a follow-up ballot.
“We may now be in for an extended period of heightened uncertainty ahead of fresh elections,” said Ray Attrill, head of foreign-exchange strategy at National Australia Bank Ltd. in Sydney.
Elsewhere, emerging-market stocks struggled to hold a gain as the dollar rose, while developing currencies erased an advance. The lira was the stand out performer, rallying after the central bank took steps to simplify its monetary policy. Gold fell.


“China rejects U.S. charge of ‘forced technology transfer’ at WTO.”

China told the World Trade Organization’s dispute settlement body on Monday that U.S. accusations that Beijing forced companies to hand over technology as a cost of doing business in China were groundless.
U.S. President Donald Trump has accused China of stealing American ideas and announced a plan for a $50 billion tariff penalty against Chinese goods. Both sides launched legal complaints at the WTO over the issue earlier this year. “There is no forced technology transfer in China,” Chinese Ambassador Zhang Xiangchen told the meeting, according to a copy of his remarks provided to Reuters.
“According to the U.S.’s view, China forces the U.S. companies to transfer technologies by imposing joint venture requirements, foreign equity limitations and administrative licensing procedures,” Zhang said. “But the fact is, nothing in these regulatory measures requires technology transfer from foreign companies.”
Technology transfer was a normal commercial activity that benefited the United States most of all, he said, while Chinese innovation was driven by “the diligence and entrepreneurship of the Chinese people, investment in education and research, and efforts to improve the protection of intellectual property.” Legal experts say Washington needs WTO backing to implement its tariffs as far as they relate to WTO rules, while China has rejected the tariff plan wholesale and resorted to WTO action to stop it.


The Economist
“The leaders of the two Koreas meet again.”

THERE is an old saying about buses: you wait for one for ages, then two come along at once. The same may now be said of inter-Korean summits. On May 26th Moon Jae-in, South Korea’s president, and Kim Jong Un, the North’s leader, added another surprise to a week already rich in them by meeting for informal talks on the northern side of the demilitarised zone between their two countries. The meeting came less than a month after the two men had vowed to bring about peace and “complete denuclearisation” on the peninsula during the first summit between leaders of the two Koreas in more than a decade.
Like the first summit, the impromptu meeting on May 26th featured a show of bonhomie. Pictures released by South Korea’s presidential office show the two leaders sharing a warm embrace after concluding their talks. “It was a meeting between friends,” Mr Moon said on May 27th. The two men agreed to hold a new round of working-level talks, which Mr Kim had cancelled the week before, on June 1st, and to arrange dates for military-level discussions and preparatory talks to reinstate family reunions.
Mr Moon said on May 27th that Mr Kim had asked to meet two days previously, after Mr Trump’s summit cancellation, suggesting that the North was spooked by the sudden volte face in Washington, DC. Mr Kim remained committed to the peace process and the “complete denuclearisation” of the peninsula, claimed Mr Moon, but was worried about the reliability of American guarantees for the security of his regime. That is the crux of the stand-off between America and the North: America wants “complete, verifiable, and irreversible denuclearisation”, but Mr Kim seems to view nuclear arms as the only way to ensure his regime’s survival.


“Spain to Appoint New Central Bank Governor Amid Calls for Women.”

European nations are facing mounting calls to name women to lead their central banks. This week Spain gets the chance to respond.
Economy Minister Roman Escolano is due to announce a new Bank of Spain governor as soon as Tuesday to replace Luis Maria Linde. Appointing a female governor would break new ground for an institution that traces its roots back to 1782 and whose 69 previous governors have all been men.
Spain’s decision is in the spotlight after European Central Bank Executive Board member Benoit Coeure just days ago called on governments to do more for diversity and appoint more women to top jobs. Just two of the 25 current members of the ECB’s Governing Council are women.
Among the names linked to Spanish job — which carries a seat on the ECB’s policy-setting council — are Jose Luis Escriva, the head of the budget watchdog and former chief economist at BBVA, and Pablo Hernandez de Cos, the Bank of Spain’s current head of research and statistics.
Female candidates the government may be inclined to consider include Margarita Delgado, deputy director at the Single Supervisory Mechanism under the ECB’s watch, or Rosa Maria Sanchez-Yebra, former head of the Spanish Treasury.
Luis de Guindos, a former Spanish economy minister, won the race to replace ECB Vice President Vitor Constancio this year. When Finland appointed Olli Rehn to succeed central bank Governor Erkki Liikanen in July, he was picked from a list of 10 candidates that was exclusively male. Not a single woman had applied.