Global News September 08, 2017

  1. Bloomberg News
  2. Global News September 08, 2017

New York Times
“Caribbean Devastated as Irma Heads Toward Florida.”

One of the most powerful Atlantic hurricanes ever recorded crescendoed over the Caribbean on Thursday, crumpling islands better known as beach paradises into half-habitable emergency zones and sideswiping Puerto Rico before churning north. It is expected to hit the Florida Keys and South Florida by Saturday night. Gov. Rick Scott of Florida urged extreme caution in the face of a powerful storm that could quickly change course. “Every Florida family must prepare to evacuate regardless of the coast you live on,” he said.
A shortage of gasoline and bottled water, always a headache in the days before hurricanes, grew more acute in the wake of Hurricane Harvey, as the production of Houston oil refineries shrank and fuel and water were diverted to Texas. Pump lines in South Florida sprawled for blocks as fleeing residents sucked up what gas they could, and some drivers chased after tankers they had spied on the roads.
More than 60 percent of households in Puerto Rico were without power. On St. Martin, an official said 95 percent of the island was destroyed. The Haitian government called for all agencies, stores and banks to shut down as the storm hit. Prime Minister Gaston Browne of Antigua and Barbuda said that half of Barbuda had been left homeless.
Not all the news was awful. Despite the loss of power to most of the island, damage and loss of life on Puerto Rico was far less than feared. Haiti and the Dominican Republic, which share the island of Hispaniola, were also spared direct hits.


“Japan’s second quarter economic growth revised down from stellar first reading.”

Japan’s economic growth in the second quarter was much slower than seen in a stellar preliminary reading, government data showed on Friday, confounding hopes for a long-awaited pick-up in domestic demand. The downgrade was widely expected after data used to revise gross domestic product (GDP) figures showed capital spending growth in April-June slowed from the previous quarter.
While the disappointing data may weaken confidence in the government’s economic policies and the business outlook, analysts still expect the economy to sustain a steady recovery as robust global demand underpins exports and a tightening job market improves the prospects for higher wages. Japan’s economy expanded at an annualized rate of 2.5 percent in April-June, much less than an initial estimate of 4.0 percent growth, Cabinet Office data showed.
While it was lower than a median market forecast for a revision to 2.9 percent growth, the economy still managed to post a sixth straight quarter of expansion. Japan’s GDP data tends to experience big revisions due to the way the Cabinet Office estimates capital expenditure, consumption and inventory in the preliminary reading.
Wage growth and household spending, however, remain lackluster despite a tight job market, keeping the Bank of Japan under pressure to maintain its massive monetary stimulus even as its U.S. and European counterparts contemplate a gradual exit from their ultra-loose monetary policies.


“Buy Everything: Gold, Stocks, Bonds All Draw Big Inflows.”

Inflows were back with a vengeance the first week after the summer break as investors piled into everything from gold and government bonds to equities and high-yield credit.
Global funds that invest in gold, equities and bonds netted inflows of $11.6 billion for the week ended Sept. 7, Bank of America Merrill Lynch said in a research report, citing EPFR Global data. Precious-metal funds added the most in 30 weeks, while bond portfolios posted a 25th straight week of inflows.
Investors had a multitude of signals to react to in the first week of post-summer business as usual. While rising political risks including North Korean nuclear tests and American hurricanes sent some investors rushing to haven assets, fresh signals from the European Central Bank that it is prolonging monetary stimulus gave a boost to riskier securities.
Central-bank asset purchases which have totaled almost $2 trillion this year alone are the “best explanation” for money flowing into both bonds and stocks, the Bank of America analysts said in their note. Investors continued to shift funds from U.S. equities to stock markets in Europe, Japan and emerging markets. A net $6.6 billion has been taken out of U.S. equity funds since the beginning of the year, while European stocks are sitting on an inflow of $31 billion.


“ECB policymakers agreed on stimulus cut at meeting – sources.”

European Central Bank policymakers meeting on Thursday were in broad agreement their next step would be to cut bond purchases, with four options under consideration, two sources with direct knowledge of the discussion said.
Possibilities discussed by the ECB included – but are not limited to – cutting monthly assets buys from 60 billion euros now to 40 billion euros a month or 20 billion euros from the start of next year, with extension options including 6 months or 9 months, said the sources, who asked not to be named.
Policymakers also agreed that interest rates will not be raised before the asset buys end, the sources said, indicating by default that any extension of the program would also push out the first rate hike. Any decision, likely come in October, should also be backed by a broad consensus, the sources said, with one suggesting a compromise could be found for setting monthly purchases somewhere between 20 billion euros and 40 billion euros.