Global News October 13, 2017

  1. BBC
  2. Global News October 13, 2017

“Consumer Sentiment in U.S. Unexpectedly Surges to 13-Year High.”

U.S. consumer sentiment unexpectedly surged to a 13-year high as Americans’ perceptions of the economy and their own finances rebounded following several major hurricanes, a University of Michigan survey showed Friday.
The jump in sentiment, which was greater than any analyst had projected, may reflect several trends: falling gasoline prices following a hurricane-related spike; repeated record highs for the stock market; a 16-year low in unemployment; and post-storm recovery efforts driving a rebound in economic growth.
The advance in the main gauge spanned age and income subgroups as well as partisan views, according to the report. Almost six out of every 10 consumers thought the economy had recently improved in early October, the university said.
Not all measures in the survey showed big gains: the share of consumers reporting improved finances held steady at about half, while the proportion expecting gains in their financial situation fell slightly to 40 percent.
Other data from the survey showed 83 percent of respondents saw buying conditions for household durables as favorable, most in more than a decade; positive vehicle-buying attitudes at 75 percent, highest since 2004, consumers saw inflation rate in the next year at 2.3 percent after 2.7 percent the prior month and inflation rate over next five to 10 years seen at 2.4 percent after 2.5 percent in September


New York Times
“Trump to Scrap Critical Health Care Subsidies, Hitting Obamacare Again.”

President Trump will scrap subsidies to health insurance companies that help pay out-of-pocket costs of low-income people, the White House said late Thursday. His plans were disclosed hours after the president ordered potentially sweeping changes in the nation’s insurance system, including sales of cheaper policies with fewer benefits and fewer protections for consumers.
The twin hits to the Affordable Care Act could unravel President Barack Obama’s signature domestic achievement, sending insurance premiums soaring and insurance companies fleeing from the health law’s online marketplaces. After Republicans failed to repeal the health law in Congress, Mr. Trump appears determined to dismantle it on his own.
In a joint statement, the top Democrats in Congress, Senator Chuck Schumer of New York and Representative Nancy Pelosi of California, said Mr. Trump had “apparently decided to punish the American people for his inability to improve our health care system.”
It was the first time since efforts to repeal the landmark health law collapsed in Congress that Mr. Trump has set forth his vision of how to remake the nation’s health care system using the powers of the executive branch. It immediately touched off a debate over whether the move would fatally destabilize the Affordable Care Act marketplaces or add welcome options to consumers complaining of high premiums and not enough choice.


BBC News
“Brexit: EU ‘to prepare’ for future trade talks with UK.”

The EU is to begin preparing for its post-Brexit trade negotiations with the UK, while refusing to discuss the matter with the British government. An internal draft document suggests the 27 EU countries should discuss trade among themselves while officials in Brussels prepare the details. The draft text could yet be revised.
EU Commission chief Jean-Claude Juncker said a lack of compromise over the UK’s financial commitments was impeding progress – saying «they have to pay». Speaking in Luxembourg, Mr Juncker used the analogy of someone covering the bill after ordering 28 beers at a bar to explain the EU’s position – and added that the Brexit negotiating process was taking longer than expected. He also dismissed the wrangling over citizens’ rights – another sticking point – as «nonsense», calling on the UK to adopt a «common sense» approach and say «things will stay as they are» after Brexit.
As the fifth round of talks ended in Brussels on Thursday, the EU’s chief negotiator, Michel Barnier, said there was «deadlock» over the UK’s Brexit bill. He said there had not been enough progress to move to the next stage of post-Brexit trade talks – as the UK had hoped – but added that he hoped for «decisive progress» by the time of the December summit of the European Council.
The draft paper submitted to the 27 EU states by European Council president Donald Tusk, suggests free trade talks could open in December – should Prime Minister Theresa May improve her offer on what the UK pays when it leaves.


“ECB to Consider Cutting QE Purchases in Half Next Year.”

European Central Bank officials are considering cutting their monthly bond buying by at least half starting in January and keeping their program active for at least nine months, according to officials familiar with the debate.
Reducing quantitative easing to 30 billion euros ($36 billion) a month from the current pace of 60 billion euros is a feasible option, said the officials, who asked not to be identified because the deliberations are private. That reduced flow would match existing predictions from economists at institutions including ABN Amro Bank NV and Bank of America Merrill Lynch.
Policy makers led by President Mario Draghi are becoming increasingly confident that they can agree on Oct. 26 to the specifics of how much debt the euro-area’s central banks will buy in the coming months. After more than 2 1/2 years of trying to revive the region’s economy through bond purchases, some governors see the recent period of robust growth as a reason to rein in the support. Others are concerned that inflation remains too weak.
Any changes to the sum and time frame of QE easing would still fit into the ECB’s present guidance on monetary policy, a promise to a “sustained adjustment in the path of inflation consistent with its inflation aim.” It also pledges that if “the outlook becomes less favorable, or if financial conditions become inconsistent with further progress toward a sustained adjustment in the path of inflation, the Governing Council stands ready to increase the program in terms of size and/or duration.”
Policy members have yet to officially discuss options, and aren’t scheduled to meet again as a group until Oct. 25, in preparation for their decision the next day. Such meetings have sometimes produced outcomes that haven’t been clearly envisaged in advance.