The current threat of a slowdown is not enough to change our outlook, ECB member says

Concerns over a potential slowdown in Europe are currently not great enough for the European Central Bank (ECB) to change any economic forecasts for the region, a key member of the bank told CNBC Wednesday. “At this point in time, the impact is not such that it would take us to sort of fundamentally change our outlook,” Klaas Knot, the governor of the Dutch central bank and a member of the ECB’s Governing Council, told CNBC’s Joumanna Bercetche. Knot accepted that there were risks on the horizon


Concerns over a potential slowdown in Europe are currently not great enough for the European Central Bank (ECB) to change any economic forecasts for the region, a key member of the bank told CNBC Wednesday. “At this point in time, the impact is not such that it would take us to sort of fundamentally change our outlook,” Klaas Knot, the governor of the Dutch central bank and a member of the ECB’s Governing Council, told CNBC’s Joumanna Bercetche. Knot accepted that there were risks on the horizon
The current threat of a slowdown is not enough to change our outlook, ECB member says Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-11-14  Authors: matt clinch, hannelore foerster, getty images
Keywords: news, cnbc, companies, war, threat, wednesdayat, central, change, told, member, bank, trade, slowdown, ecb, risks, region, current, outlook


The current threat of a slowdown is not enough to change our outlook, ECB member says

Concerns over a potential slowdown in Europe are currently not great enough for the European Central Bank (ECB) to change any economic forecasts for the region, a key member of the bank told CNBC Wednesday.

“At this point in time, the impact is not such that it would take us to sort of fundamentally change our outlook,” Klaas Knot, the governor of the Dutch central bank and a member of the ECB’s Governing Council, told CNBC’s Joumanna Bercetche.

Knot accepted that there were risks on the horizon that could potentially cause growth to stall, including Brexit, Italy’s budget row with the EU and the U.S. trade war with China. He said it was “inevitable” to conclude that there were downside risks for the region.


Company: cnbc, Activity: cnbc, Date: 2018-11-14  Authors: matt clinch, hannelore foerster, getty images
Keywords: news, cnbc, companies, war, threat, wednesdayat, central, change, told, member, bank, trade, slowdown, ecb, risks, region, current, outlook


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‘Multiple and intertwined risks’ cloud outlook for the Middle East and its neighbors, IMF says

Major oil producing countries in the Middle East and its neighbors might benefit from higher crude prices in 2019, according to the latest outlook from International Monetary Fund (IMF), but there are numerous uncertainties in the region. The Fund’s latest regional economic outlook for the Middle East, North Africa, Afghanistan, and Pakistan (MENAP) region, published Tuesday, warns that “multiple and intertwined risks cloud the outlook of the MENAP region.” Oil producing countries in the Middle


Major oil producing countries in the Middle East and its neighbors might benefit from higher crude prices in 2019, according to the latest outlook from International Monetary Fund (IMF), but there are numerous uncertainties in the region. The Fund’s latest regional economic outlook for the Middle East, North Africa, Afghanistan, and Pakistan (MENAP) region, published Tuesday, warns that “multiple and intertwined risks cloud the outlook of the MENAP region.” Oil producing countries in the Middle
‘Multiple and intertwined risks’ cloud outlook for the Middle East and its neighbors, IMF says Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-11-13  Authors: holly ellyatt, getty images
Keywords: news, cnbc, companies, menap, imf, east, risks, neighbors, middle, latest, intertwined, growth, market, outlook, cloud, multiple, countries, oil


'Multiple and intertwined risks' cloud outlook for the Middle East and its neighbors, IMF says

Major oil producing countries in the Middle East and its neighbors might benefit from higher crude prices in 2019, according to the latest outlook from International Monetary Fund (IMF), but there are numerous uncertainties in the region.

The Fund’s latest regional economic outlook for the Middle East, North Africa, Afghanistan, and Pakistan (MENAP) region, published Tuesday, warns that “multiple and intertwined risks cloud the outlook of the MENAP region.”

“These include a faster-than-anticipated tightening of global financial conditions, escalating trade tensions that could affect global growth and hurt key MENAP trading partners, geopolitical strains, and spillovers from regional conflicts,” the report stated.

These risks could trigger a deterioration in financial market sentiment and greater financial market volatility, the Fund said, “aggravating the financing challenges for countries with high levels of debt or large refinancing needs.”

Oil producing countries in the Middle East have traditionally relied on oil exports as their source of government revenue. Volatility in oil markets amid imbalances in supply and demand have prompted a number of countries, particularly in the Gulf, to look to diversify their economies away from oil and to create more jobs in other sectors of the economy. In its latest summary on the MENAP region’s outlook, it encouraged countries to commit to further reforms.

“The outlook and the rising risks underscore the need to intensify efforts to raise growth to levels that generate enough jobs for the benefit of all,” the IMF said. “In this context, countries should expand access to finance, strengthen governance, improve education outcomes, and enhance labor market flexibility, particularly in the Gulf Cooperation Council (GCC).”

To ensure that future fiscal adjustment is as growth-friendly and equitable as possible, the Fund said countries need to both prioritize expenditure on “growth-enhancing and high-quality investment in human capital and physical infrastructure, while sustaining well-targeted social spending.” It also advocated a move to a more progressive tax structure to diversify the governments’ revenue bases.

Jihad Azour, director of the Middle East and Central Asia at the IMF, told CNBC on Tuesday that the MENAP report comes amid an uncertain global growth outlook.

“Global conditions are changing in terms of the risk metrics,” Azour told CNBC’s Dan Murphy. “Although we’re still enjoying a high level of growth, that growth is plateauing,” he added.


Company: cnbc, Activity: cnbc, Date: 2018-11-13  Authors: holly ellyatt, getty images
Keywords: news, cnbc, companies, menap, imf, east, risks, neighbors, middle, latest, intertwined, growth, market, outlook, cloud, multiple, countries, oil


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German growth faces risks at home and abroad, economists say

Germany’s economy faces risks on both a domestic and international level, according to prominent German economists, and there is little the country can do about a lot of them. “For me there are two risks,” Achim Wambach, the president of Germany’s influential ZEW research institute, told CNBC on Monday. “But then we also see homemade risks, in particular, in the automobile industry,” he told CNBC’s Annette Weisbach at the German Economic Summit in Berlin. The latest ZEW Institute measure of econ


Germany’s economy faces risks on both a domestic and international level, according to prominent German economists, and there is little the country can do about a lot of them. “For me there are two risks,” Achim Wambach, the president of Germany’s influential ZEW research institute, told CNBC on Monday. “But then we also see homemade risks, in particular, in the automobile industry,” he told CNBC’s Annette Weisbach at the German Economic Summit in Berlin. The latest ZEW Institute measure of econ
German growth faces risks at home and abroad, economists say Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-11-13  Authors: holly ellyatt, phas, uig, getty images
Keywords: news, cnbc, companies, institute, zew, economic, faces, told, germanys, potential, abroad, economists, german, risks, economy, say, growth


German growth faces risks at home and abroad, economists say

Germany’s economy faces risks on both a domestic and international level, according to prominent German economists, and there is little the country can do about a lot of them.

“For me there are two risks,” Achim Wambach, the president of Germany’s influential ZEW research institute, told CNBC on Monday. “There are political risks – Brexit is not decided, and then we see Italy (and its populist government) which makes markets nervous — and we see protectionism in the U.S. and China which, for Germany’s export-orientated economy, would be a potential risk on the horizon.”

“But then we also see homemade risks, in particular, in the automobile industry,” he told CNBC’s Annette Weisbach at the German Economic Summit in Berlin.

The latest ZEW Institute measure of economic sentiment among financial experts in Germany showed what Wambach called a “severe” drop on that metric in October to a level of minus 24.7 points.

The indicator has thus reached the same low-point as in July of this year, being at its lowest reading since August 2012, ZEW said. The negative expectations were largely a result of the trade dispute between China and the U.S.

Germany’s economy is expected to have seen weak growth in the third quarter largely due to concerns over international trade and a dip in car manufacturing, one of its major export industries, although the Bundesbank believes growth should rebound in the final three months of the year. The German government expects 2018 growth to be 1.8 percent, down from an initial 2.3 percent previously forecast.

Christoph Schmidt, an economist and president of the RWI Essen (the RWI-Leibniz Institute for Economic Research) told CNBC that the latest growth data was a temporary blip but that Germany faced longer-term risks.

“It’s a unique quarter I think, the German economy will bounce back and we think it will grow according to potential, roughly 1.6 percent this year and 1.5 percent in 2019 so this temporary blip will be overcome but there’s not enough potential to grow stronger than potential now so it will be a one-off loss,” he said, speaking to CNBC’s Annette Weisbach on Monday.


Company: cnbc, Activity: cnbc, Date: 2018-11-13  Authors: holly ellyatt, phas, uig, getty images
Keywords: news, cnbc, companies, institute, zew, economic, faces, told, germanys, potential, abroad, economists, german, risks, economy, say, growth


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UK economy risks a slowdown if Brexit confusion continues, RBS boss warns

Howard Davies, chairman of British bank RBS, told CNBC on Tuesday that the U.K. risks a slowdown to its economy if uncertainty over Brexit continues. Davies added that the bank is seeing a slowdown in the pipeline of loan applications for investment as businesses wait on the outcome of Brexit. “If you have a choice to invest or not invest in present circumstances, I think sitting on your hands looks like a prudent strategy.” But he cautioned, the chances had risen that U.K. leader Theresa May’s


Howard Davies, chairman of British bank RBS, told CNBC on Tuesday that the U.K. risks a slowdown to its economy if uncertainty over Brexit continues. Davies added that the bank is seeing a slowdown in the pipeline of loan applications for investment as businesses wait on the outcome of Brexit. “If you have a choice to invest or not invest in present circumstances, I think sitting on your hands looks like a prudent strategy.” But he cautioned, the chances had risen that U.K. leader Theresa May’s
UK economy risks a slowdown if Brexit confusion continues, RBS boss warns Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-11-13  Authors: david reid, silvia amaro
Keywords: news, cnbc, companies, slowdown, theresa, economy, bank, told, rbs, risks, warns, boss, uncertainty, continues, say, confusion, brexit, uk, think, union


UK economy risks a slowdown if Brexit confusion continues, RBS boss warns

Howard Davies, chairman of British bank RBS, told CNBC on Tuesday that the U.K. risks a slowdown to its economy if uncertainty over Brexit continues.

In October, the Royal Bank of Scotland said it had set aside, as an impairment provision, 100 million pounds ($128 million), in order to account for economic uncertainties – Brexit being the biggest concern for the British lender.

“If we get continued political uncertainty for some period, which is now quite possible, then I think we may see a weakening in the U.K. economy,” he told CNBC’s Joumanna Bercetche at the UBS European Conference.

Davies added that the bank is seeing a slowdown in the pipeline of loan applications for investment as businesses wait on the outcome of Brexit. “If you have a choice to invest or not invest in present circumstances, I think sitting on your hands looks like a prudent strategy.”

Davies said the probability of a “no-deal” Brexit, where Britain crashes out of the European Union with no trade agreement in place, had not increased in his view.

But he cautioned, the chances had risen that U.K. leader Theresa May’s proposal, known as the “Chequers plan,” would likely fail the test of fellow lawmakers. The RBS chairman said a prepackaged deal was starting to look like an option.

“Some kind of continued customs union but nothing special for the U.K., or as people are taling about a potential Norway option,” he said.

Davies said Theresa May was sticking fast to her plan as she was likely receiving a lot of advice to say that a no deal Brexit “really could be a mess.”

“I’d be very surprised any prime minister, however ‘Brexit-enthusiastic’ they may be, faced with that advice would say well you know what you can say that, but I’m just going to go for it.”


Company: cnbc, Activity: cnbc, Date: 2018-11-13  Authors: david reid, silvia amaro
Keywords: news, cnbc, companies, slowdown, theresa, economy, bank, told, rbs, risks, warns, boss, uncertainty, continues, say, confusion, brexit, uk, think, union


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Cyber-attacks, weak government, and energy shocks pose biggest risks to firms, WEF finds

Cyber security, energy price shocks and failure of national governance are among the biggest threats to business in 2018, according to research published Monday. Researchers found there were significant variations in risk perceptions between world regions. The study also revealed that worries about technological risk is on the rise, with cyber-attacks named as the top concern for executives in three of the eight regions covered. In the 2016 survey, only one region— North America — named cyber-at


Cyber security, energy price shocks and failure of national governance are among the biggest threats to business in 2018, according to research published Monday. Researchers found there were significant variations in risk perceptions between world regions. The study also revealed that worries about technological risk is on the rise, with cyber-attacks named as the top concern for executives in three of the eight regions covered. In the 2016 survey, only one region— North America — named cyber-at
Cyber-attacks, weak government, and energy shocks pose biggest risks to firms, WEF finds Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-11-12  Authors: chloe taylor, kacper pempel
Keywords: news, cnbc, companies, price, weak, energy, world, biggest, regions, executives, north, risks, firms, finds, wef, pose, shocks, cyberattacks, risk, technological


Cyber-attacks, weak government, and energy shocks pose biggest risks to firms, WEF finds

Cyber security, energy price shocks and failure of national governance are among the biggest threats to business in 2018, according to research published Monday.

The World Economic Forum (WEF) spoke to more than 12,000 executives around the world about what they considered to be the biggest risks to doing businesses, ranging across political, societal and technological concerns.

Researchers found there were significant variations in risk perceptions between world regions. For example, cyber-attacks were considered the number one risk by executives in Europe and advanced economies, while failure of national governance was the top concern for their Latin American counterparts.

The study also revealed that worries about technological risk is on the rise, with cyber-attacks named as the top concern for executives in three of the eight regions covered. In the 2016 survey, only one region— North America — named cyber-attacks as the biggest threat to business.

In energy-rich regions Eurasia, the Middle East and North Africa, energy price shocks were ranked as the top risk to business.


Company: cnbc, Activity: cnbc, Date: 2018-11-12  Authors: chloe taylor, kacper pempel
Keywords: news, cnbc, companies, price, weak, energy, world, biggest, regions, executives, north, risks, firms, finds, wef, pose, shocks, cyberattacks, risk, technological


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The reasons to be bearish on the stock market now are swamping the bull case

The market sold off big today—here’s what four experts say investors should be watching 2 Hours Ago | 02:10The reasons for investors to be pessimistic are beginning to pile up just as quickly as the market has been sliding down. While stocks had been staging a mild relief rebound in November, Monday’s sharp decline shows that the market remains temperamental. The market’s vulnerability has become a common theme among market pros warning their clients not to take too much risk in the current clim


The market sold off big today—here’s what four experts say investors should be watching 2 Hours Ago | 02:10The reasons for investors to be pessimistic are beginning to pile up just as quickly as the market has been sliding down. While stocks had been staging a mild relief rebound in November, Monday’s sharp decline shows that the market remains temperamental. The market’s vulnerability has become a common theme among market pros warning their clients not to take too much risk in the current clim
The reasons to be bearish on the stock market now are swamping the bull case Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-11-12  Authors: jeff cox
Keywords: news, cnbc, companies, reasons, stock, rates, higher, economic, clients, worries, bull, risks, investors, swamping, risk, growth, market, bearish, case


The reasons to be bearish on the stock market now are swamping the bull case

The market sold off big today—here’s what four experts say investors should be watching 2 Hours Ago | 02:10

The reasons for investors to be pessimistic are beginning to pile up just as quickly as the market has been sliding down.

A once-pristine fundamental backdrop suddenly looks tarnished, as worries accelerate that economic growth may have peaked, political headwinds are forming, and rising interest rates will stand in the way of future fiscal stimulus from the Trump administration.

While stocks had been staging a mild relief rebound in November, Monday’s sharp decline shows that the market remains temperamental. All it took was a negative headline for Apple about iPhone demand and news about a lingering regulatory issue for Goldman Sachs to send Wall Street into another tailspin.

The market’s vulnerability has become a common theme among market pros warning their clients not to take too much risk in the current climate.

“Ongoing risks keep us cautious and we continue to recommend that investors pare back risk if their equity holdings are above longer-term strategic allocations,” senior strategists at Charles Schwab warned clients in a report Monday. “Economic and earnings growth rates may be peaking, while the labor market continues to tighten. This mix contributes to higher wage growth, possibly higher inflation and related uncertainty with regard to Fed policy.”

Those are but some of the risks on invevstors’ minds these days.


Company: cnbc, Activity: cnbc, Date: 2018-11-12  Authors: jeff cox
Keywords: news, cnbc, companies, reasons, stock, rates, higher, economic, clients, worries, bull, risks, investors, swamping, risk, growth, market, bearish, case


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Gold edges down as Fed’s interest rate view strengthens dollar

Gold prices inched lower on Friday as the dollar firmed after the U.S. Federal Reserve kept interest rates steady with a fourth hike for this year expected next month. Prices fell to their lowest in a week at $1,219.59 in the previous session. Gold was down about 0.9 percent for the week and on track to post its biggest weekly fall since August. The Fed’s statement on Thursday overall reflected little change in its outlook for the economy since its last policy meeting in September. Inflation rem


Gold prices inched lower on Friday as the dollar firmed after the U.S. Federal Reserve kept interest rates steady with a fourth hike for this year expected next month. Prices fell to their lowest in a week at $1,219.59 in the previous session. Gold was down about 0.9 percent for the week and on track to post its biggest weekly fall since August. The Fed’s statement on Thursday overall reflected little change in its outlook for the economy since its last policy meeting in September. Inflation rem
Gold edges down as Fed’s interest rate view strengthens dollar Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-11-09
Keywords: news, cnbc, companies, gold, rates, meeting, strengthens, dollar, president, risks, trade, rate, week, fell, view, prices, outlook, interest, feds, edges


Gold edges down as Fed's interest rate view strengthens dollar

Gold prices inched lower on Friday as the dollar firmed after the U.S. Federal Reserve kept interest rates steady with a fourth hike for this year expected next month.

Spot gold was down 0.1 percent at $1,221.78 per ounce at 0124 GMT. Prices fell to their lowest in a week at $1,219.59 in the previous session.

Gold was down about 0.9 percent for the week and on track to post its biggest weekly fall since August.

U.S. gold futures was down 0.2 percent to $1,223 per ounce.

Asian stocks dipped on Friday as Wall Street took a breather after the Fed kept intact its plans to continue raising interest rates at a gradual pace, while the dollar gained against its major peers.

The Fed’s statement on Thursday overall reflected little change in its outlook for the economy since its last policy meeting in September. Inflation remained near its 2 percent target, unemployment fell, and risks to the economic outlook were still felt to be “roughly balanced.”

China wants to resolve problems with the United States through talks but it must respect China’s choice of development path and interests, President Xi Jinping said on Thursday ahead of a meeting with the U.S. leader in Argentina.

China reported much stronger-than-expected exports for October as shippers rushed goods to the U.S., its biggest trading partner, racing to beat higher tariff rates due to kick in at the start of next year.

Canada is pushing back against U.S. attempts to change the text of their September trade pact and the issue may have to be referred to ministers to settle, a Canadian source with direct knowledge of the matter said on Thursday.

The euro zone economy will continue expanding but risks ranging from trade tensions to high asset prices are growing, European Central Bank President Mario Draghi told Irish lawmakers on Thursday.

South Africa’s total mining output fell 1.8 percent year-on-year in September compared with the consensus figure which forecast it rising 0.30 percent, Statistics South Africa said on Thursday.


Company: cnbc, Activity: cnbc, Date: 2018-11-09
Keywords: news, cnbc, companies, gold, rates, meeting, strengthens, dollar, president, risks, trade, rate, week, fell, view, prices, outlook, interest, feds, edges


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New Zealand central bank shifts to neutral tone and warns of growth risks

New Zealand’s central bank struck a neutral tone as it marked two full years of steady policy on Thursday, saying its next move would depend on how the economy fared and cautioned of downside risks to growth from global trade frictions. As widely expected, the Reserve Bank of New Zealand kept the official cash rate (OCR) at 1.75 percent, where it has remained since late 2016, and reiterated it expected to hold rates into 2020. The central bank removed a line from its previous statements that its


New Zealand’s central bank struck a neutral tone as it marked two full years of steady policy on Thursday, saying its next move would depend on how the economy fared and cautioned of downside risks to growth from global trade frictions. As widely expected, the Reserve Bank of New Zealand kept the official cash rate (OCR) at 1.75 percent, where it has remained since late 2016, and reiterated it expected to hold rates into 2020. The central bank removed a line from its previous statements that its
New Zealand central bank shifts to neutral tone and warns of growth risks Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-11-08  Authors: mark coote, bloomberg, getty images
Keywords: news, cnbc, companies, global, zealand, economic, tone, risks, neutral, growth, central, bank, ocr, cut, shifts, warns, trade, rate, inflation


New Zealand central bank shifts to neutral tone and warns of growth risks

New Zealand’s central bank struck a neutral tone as it marked two full years of steady policy on Thursday, saying its next move would depend on how the economy fared and cautioned of downside risks to growth from global trade frictions.

The New Zealand dollar rallied briefly and bonds sold off as the markets priced out any chance of a near term rate cut and instead focused on when New Zealand would join some of its global counterparts in raising rates.

As widely expected, the Reserve Bank of New Zealand kept the official cash rate (OCR) at 1.75 percent, where it has remained since late 2016, and reiterated it expected to hold rates into 2020.

“The timing and direction of any future OCR move remains data dependent,” Governor Adrian Orr said in a statement, and in a press conference later in the day he refused to rule out a rate cut if economic conditions deteriorated.

The central bank removed a line from its previous statements that its next rate move could be either up or down, but noted both upside and downside risks remained to growth and inflation projections.

“We don’t agree that the RBNZ needs to maintain the fence-sitting dual approach to policy,” said Citibank economist Paul Brennan.

“While our own forecasts show a near-term moderation in GDP growth, we expect CPI inflation to exceed the RBNZ’s latest forecasts and maintain the view that the OCR will need to rise from Q3 next year.”

A run of stellar economic data including a surprise drop in third-quarter jobless rate to 10-year lows, better-than-expected growth and inflation numbers over recent months, has given the RBNZ some breathing room.

However, Orr pointed to temporary factors for the pick-up in second-quarter economic growth and cautioned of headwinds to growth.

“Weak business sentiment could weigh on growth for longer. Trade tensions remain in some major economies, raising the risk that trade barriers increase and undermine global growth.”

The New Zealand dollar hit a fresh three-month high of $0.6820 immediately after the rate decision but quickly retreated from those levels to last hover around $0.6785.

Government bonds were sold off for a second straight day as investors priced out the risk of a cut with yields on the long-end of the curve up about 5 basis points.


Company: cnbc, Activity: cnbc, Date: 2018-11-08  Authors: mark coote, bloomberg, getty images
Keywords: news, cnbc, companies, global, zealand, economic, tone, risks, neutral, growth, central, bank, ocr, cut, shifts, warns, trade, rate, inflation


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Dollar seesaws as investors assess risks of deadlock after midterms

The dollar seesawed versus the euro and yen in a volatile session as traders scanned U.S. midterm election results for early insights into the prospect of Congressional gridlock. The Democratic Party is expected to win control of the U.S. House of Representatives, with the Republicans seen likely to keep their majority in the Senate. The dollar index, a gauge of its value versus six major peers, lost 0.2 percent to trade at 96.12. The euro gained marginally to trade at $1.1440 versus the dollar,


The dollar seesawed versus the euro and yen in a volatile session as traders scanned U.S. midterm election results for early insights into the prospect of Congressional gridlock. The Democratic Party is expected to win control of the U.S. House of Representatives, with the Republicans seen likely to keep their majority in the Senate. The dollar index, a gauge of its value versus six major peers, lost 0.2 percent to trade at 96.12. The euro gained marginally to trade at $1.1440 versus the dollar,
Dollar seesaws as investors assess risks of deadlock after midterms Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-11-07  Authors: beawiharta
Keywords: news, cnbc, companies, risks, yen, win, investors, deadlock, session, split, versus, seen, volatile, seesaws, midterms, likely, assess, dollar, trade


Dollar seesaws as investors assess risks of deadlock after midterms

The dollar seesawed versus the euro and yen in a volatile session as traders scanned U.S. midterm election results for early insights into the prospect of Congressional gridlock.

The Democratic Party is expected to win control of the U.S. House of Representatives, with the Republicans seen likely to keep their majority in the Senate.

A split Congress may hurt the dollar temporarily: a Democratic win in one or both chambers is likely to be seen as a repudiation of President Donald Trump and the policies which have boosted corporate growth.

“If Congress is split, with the Democrats controlling the House and Republicans the Senate, the prospect of legislative gridlock that would make it difficult for policies such as the President’s middle class tax cut to pass is negative for the U.S. dollar,” said Kathy Lien, managing director of currency strategy at BK Asset Management in a note.

The dollar index, a gauge of its value versus six major peers, lost 0.2 percent to trade at 96.12.

The greenback has outperformed most of its key rivals this year, benefiting from a robust domestic economy and higher interest rates, with investors focused on whether the mid-terms could disrupt this stellar run.

The dollar is also likely to be supported by minutes of the last Federal Open Market Committee (FOMC) meeting due out on Thursday, in which the Fed is seen likely to reaffirm its intention to lift its policy rate above 3 percent over the next year.

The euro gained marginally to trade at $1.1440 versus the dollar, off its intraday high of $1.1473. The single currency changed hands about 1.1 percent above this year’s trough of $1.1301 reached on Aug. 15.

The dollar lost 0.07 percent against the yen, to trade at 113.33.

Earlier in the session, the yen had strengthened to 112.95.

The Australian dollar traded flat at $0.7246.

The pound was 0.22 percent higher versus the dollar at $1.3124.

Earlier in the session sterling hit a three-week high of $1.3142.

Sterling slipped as low as $1.3023 on Tuesday before erasing its losses in volatile trade on growing hopes of a breakthrough Brexit deal.


Company: cnbc, Activity: cnbc, Date: 2018-11-07  Authors: beawiharta
Keywords: news, cnbc, companies, risks, yen, win, investors, deadlock, session, split, versus, seen, volatile, seesaws, midterms, likely, assess, dollar, trade


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Goldman Sachs: The economy needs to slow down to avoid a ‘dangerous overheating’

A thriving labor market is part of a continuing economic boom that will have to slow down or it eventually will cause trouble, according to a Goldman Sachs analysis. Nonfarm payrolls rose by 250,000 in October and the unemployment rate held at a 49-year low of 3.7 percent, according to Labor Department data released Friday. The Federal Reserve estimates that the natural rate of unemployment is around 4.5 percent, which Jan Hatzius, Goldman’s chief economist, calls “broadly reasonable.” “So the e


A thriving labor market is part of a continuing economic boom that will have to slow down or it eventually will cause trouble, according to a Goldman Sachs analysis. Nonfarm payrolls rose by 250,000 in October and the unemployment rate held at a 49-year low of 3.7 percent, according to Labor Department data released Friday. The Federal Reserve estimates that the natural rate of unemployment is around 4.5 percent, which Jan Hatzius, Goldman’s chief economist, calls “broadly reasonable.” “So the e
Goldman Sachs: The economy needs to slow down to avoid a ‘dangerous overheating’ Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-11-05  Authors: jeff cox, getty images
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Goldman Sachs: The economy needs to slow down to avoid a 'dangerous overheating'

A thriving labor market is part of a continuing economic boom that will have to slow down or it eventually will cause trouble, according to a Goldman Sachs analysis.

Nonfarm payrolls rose by 250,000 in October and the unemployment rate held at a 49-year low of 3.7 percent, according to Labor Department data released Friday. On top of that, average hourly earnings rose 3.1 percent from the same period a year ago, the fastest pace during the post-Great Recession recovery.

While that’s all good news, concerns are now rising about the pace of gains.

The Federal Reserve estimates that the natural rate of unemployment is around 4.5 percent, which Jan Hatzius, Goldman’s chief economist, calls “broadly reasonable.” Looking down the road, Goldman sees unemployment falling to 3 percent by early 2020 and wage growth to hit the 3.25 percent to 3.5 percent range over the next year or so.

“So the economy really needs to slow to avoid a dangerous overheating,” Hatzius said in a note that pointed out some signs are emerging of a cooling.

What matters next is how the data feed into the broader growth picture.

Hatzius said inflation “is on track for a meaningful overshoot” of the Fed’s 2 percent mandated target, up to 2.3 percent, which would be “within the Fed’s likely comfort zone. But we see the risks to this forecast as tilted to a bigger increase.”

Those higher inflation risks are coming from the gains being documented in the labor market, as well as tariffs that are raising the cost of imports, the note said.

“Labor market tightness is moving to levels rarely seen in postwar history at the national level, and our analysis of city-level data suggests that such extreme readings typically push inflation notably, not just slightly, higher,” Hatzius said.

The Fed has been responding to the pickup in inflation expectations by raising rates and indicating that it will continue to do so through 2019. In fact, Goldman says the central bank will have to be even more aggressive than the market thinks. The firm is forecasting five more quarter-point rate hikes through early 2020, which would be two more than traders are pricing, and said risks to that forecast also are “a little tilted to the upside.”

The Fed meets Wednesday and Thursday and is not expected to take any action on the benchmark funds rate, which is set in a range between 2 percent and 2.25 percent. Markets are currently pricing in a December move, followed by two more in 2019.

Policymakers may choose to tip off the next rate and could include language in the post-meeting statement to indicate where they think growth is heading and how that figures into longer-range actions. Central bank officials also may address the recent spate of market volatility.


Company: cnbc, Activity: cnbc, Date: 2018-11-05  Authors: jeff cox, getty images
Keywords: news, cnbc, companies, rate, unemployment, growth, risks, labor, overheating, inflation, data, hatzius, economy, dangerous, sachs, market, slow, goldman, avoid, needs


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