China’s debt levels pose stability risk, states IMF

Fears that China risks being the reason for a brand new global financial trouble happen to be highlighted through the Worldwide Financial Fund inside a hard-hitting warning concerning the growing debt-dependency from the world’s second greatest economy.

The IMF’s health check of China’s economic climate discovered that credit was high by worldwide levels, that non-public debt had elevated previously 5 years, which pressure to keep the country’s rapid growth had bred an unwillingness to allow battling firms fail.

Xi Jinping, for his dedication to improving financial security, the IMF stated reforms by Beijing recently hadn’t gone far enough.

“The system’s growing complexity has sown financial stability risks,” the IMF’s assessment stated. “Credit growth has outpaced GDP growth, resulting in a sizable credit overhang. The loan-to-GDP ratio has become about 25% over the lengthy-term trend, high by worldwide standards and in line with a good venture of monetary distress.

“As an effect, corporate debt has arrived at 165% of GDP, and household debt, while still low, has risen by 15 percentage points of GDP in the last 5 years and it is more and more associated with asset-cost speculation. The buildup of credit in traditional sectors went hands-in-hands having a slowdown of productivity growth and pressures on asset quality.”

The report stated China should put less focus on targets for growth, which brought to excessive credit expansion and greater amounts of debt at local level it should strengthen financial supervision and set elevated focus on recognizing risks ahead which should progressively combine capital targeted banks should hold.

China was among the prime engines of world growth when countries within the developed west were battling after and during the economic crisis of 2008-09, however the expansion relied heavily on greater public spending and simple credit. Xi is attempting to maneuver China to a new model where growth is slower but more sustainable.

The IMF supported this method, noting that tensions had emerged in various parts of china economic climate. There was dedication to supporting growth and jobs, along with pressures to help keep non-viable firms open. The loan required to stimulate greater growth had “led to some substantial credit expansion leading to high corporate debt and household indebtedness rising in a fast pace, although from the low base”.

The IMF also noted developments within the Chinese economic climate much like individuals in america within the years prior to the economic crisis of about ten years ago. Supervision of banks have been tightened up but interest in high-yield investment products had brought to tries to escape rules though more and more complex investment vehicles. “Risky lending has thus moved from banks toward the less well-supervised areas of the economic climate,Inches the IMF stated.

It added that risk-taking was encouraged with a reluctance among banking institutions to permit individual investors to consider losses, an expectation that Beijing would bail out condition-owned enterprises and native government financing vehicles, and efforts to stabilise markets in volatile occasions.

Thirty countries use ‘armies of opinion shapers’ to control democracy – report

The governments of 30 countries around the world are utilizing military of so known as opinion shapers to meddle in elections, advance anti-democratic agendas and repress their citizens, a brand new report shows.

Unlike broadly reported Russian tries to influence foreign elections, the majority of the offending countries search on the internet to control opinion domestically, states US NGO Freedom House.

“Manipulation and disinformation tactics performed a huge role in elections in a minimum of 17 other nations in the last year, damaging citizens’ capability to choose their leaders according to factual news and authentic debate,” the federal government-funded charitable organization stated. “Although some governments searched for to aid their interests and expand their influence abroad, just like Russia’s disinformation campaigns within the U . s . States and Europe, generally they used these techniques in their own borders to keep their hang on power.”

Even just in individuals countries that didn’t have elections within the this past year, social networking manipulation was still being frequent. From the 65 countries surveyed, 30, including Venezuela, the Philippines and Poultry, were discovered to be using “armies of opinion shapers” to “spread government views, drive particular agendas, and counter government critics on social media”, based on Freedom House’s new Freedom around the Internet report. In each one of the 30 countries it found “strong indications that folks are compensated to distort digital information landscape within the government’s favour, without acknowledging sponsorship”.

Time has risen each year because the first report in ’09. In 2016, just 23 countries were discovered to be utilizing the same kind of pro-government “astroturfing” (an imitation grassroots movement). Lately “the practice is becoming considerably more prevalent and technically sophisticated, with bots, propaganda producers, and pretend news outlets exploiting social networking and check algorithms to make sure high visibility and seamless integration with reliable content,” the report states.

“The results of these quickly distributing techniques on democracy and social activism are potentially devastating … By bolstering the false perception that many citizens stand together, government bodies can justify crackdowns around the political opposition and advance anti-democratic changes to laws and regulations and institutions with no proper debate.”

The report describes the assorted forms this manipulation takes. Within the Philippines, it’s manifested like a “keyboard army” compensated $10 each day to function fake social networking accounts, which supported Rodrigo Duterte within the run-as much as his election this past year, and backed his attack around the drug trade this season. Turkey’s ruling party enlisted 6,000 individuals to manipulate discussions, drive agendas and counter opponents. The federal government of Sudan’s approach is much more direct: one inside the country’s intelligence service produced fake accounts to produce support for government policies and denounce critical journalists.

“Governments are actually using social networking to suppress dissent and advance an anti-democratic agenda,” stated Sanja Kelly, director from the Freedom around the Internet project. “Not only is that this manipulation hard to identify, it’s harder to combat kinds of censorship, for example website blocking, because it’s spread and due to the sheer number of individuals and bots deployed to get it done.Inches

“The fabrication of grassroots support for government policies on social networking results in a closed loop where the regime basically endorses itself, departing independent groups and ordinary citizens around the outdoors,” Kelly stated.

Facebook: no current intends to make ‘catastrophic’ news feed change worldwide

Facebook is testing whether people prefer “personal and public content” being separated included in its test that hid all non-compensated posts, stated their mind of reports feed, Adam Mosseri.

Speaking following a Protector report revealed the unconventional change, forced on six small international locations, Mosseri stated Facebook “currently” doesn’t have intends to roll the experiment out further. But he didn’t address set up test would become general policy worldwide when the results reveal that Facebook users do like the news-free news feed.

The exam, which relegated all printed content in six different countries towards the “explore feed”, a brand new Facebook feature moving out worldwide, were built with a devastating impact on engagement for newspaper organisations in individuals countries, including Slovakia, Guatemala and Bolivia.

In Slovakia a wide range of the 60 largest Facebook pages saw a loss of engagement which is between two-thirds and 75 %. Local journalists in Guatemala expressed concern in the “catastrophic” change, reporting the new feed mixed the work they do along with “preposterous” sites, enabling multiplication of propaganda having a potentially pernicious impact on democracy in general.

Dina Fernandez, a journalist with Guatemalan site Soy502, stated that she’s “very very worried” through the change, “not only since it has decimated our figures but additionally since the feed appears with crazy sites”.

“The danger for that spread of propaganda and also the political instrumentalisation of social networking, specifically in countries with fragile democracies like ours, is acute,” she stated.

In the statement, Facebook’s Mosseri stated: “We always pay attention to our community about ways we may improve news feed. People inform us they need an simpler method to see posts from buddies and family. We’re testing getting one dedicated space for individuals to maintain their buddies and family, and the other separate space, known as explore, with posts from pages.

“The objective of this test would be to understand if people choose to have separate places for private and public content,” Mosseri added. “We will hear what individuals say concerning the experience to know if it is a concept worth going after any more. There’s no current intend to roll this out beyond these test countries in order to charge pages on Facebook to cover all of their distribution in news feed or explore. Regrettably, some have mistakenly made that interpretation — however that wasn’t our intention.”

A few of the confusion comes from the truth that Facebook produced a really different form of the explore feed throughout the planet. Outdoors from the six affected countries, that also includes Cambodia, Sri Lanka and Serbia, the explore feed is made to introduce Facebook users to pages they don’t already follow.

Within the test subjects, the explore feed still shows posts from pages unknown towards the user – which could include low-quality meme groups, in addition to very skewed or untrustworthy news sites – however it mixes in posts from individuals sites the customer has really selected to determine.

Despite Mosseri’s declare that the exam is to find out if users should you prefer a separation between personal and public posts, there’s one of the ways publishers are able to place their content back in the news feed: by having to pay to do this. Promoted posts still come in the actual news feed, because they also have done.

While media organisations reacted with concern towards the news from the test, some Facebook users weren’t quite as upset. “I type of miss the Facebook which was JUST my buddies on my small feed,” stated one.

Seoul pleads with Putin to assist tame North Korea

South Korea’s president, Moon Jae-in, has cautioned the crisis around the Korean peninsula risks becoming “uncontrollable” as Asia-Off-shore stocks tumbled for that third day running.

“The global political situation is becoming serious because of North Korea’s repeated provocations,” Moon told the Russian president, Vladimir Putin, during bilateral talks in Vladivostok on Wednesday.


What threat does North Korea pose to Columbia?

Its Northern Border might have found a method to create a nuclear warhead sufficiently small to use a missile, but firing one in the South will probably provoke retaliation in kind, which may finish the regime. 

Pyongyang has enough conventional artillery to complete significant harm to Seoul, but the caliber of its gunners and munitions is dubious, and also the same issue – retaliation in the South and it is allies – remains.

In case of a non-nuclear attack, Seoul’s residents would act upon experience of civil defence drills, and hurry towards the explosive device shelters dotted round the city, growing their likelihood of survival.

Based on South Korean media, Moon requested Putin to assist “tame” North Korea, because the worldwide community views its reaction to Pyongyang’s sixth nuclear test on Sunday.

There is further evidence that North Korea had made significant progress in the nuclear programme, with Japan saying it’d revised upwards the believed yield from Sunday’s explosive device to 160 kilotons – which makes it greater than 10 occasions larger than the Hiroshima explosive device.

“This is much more effective than their nuclear tests previously,Inches Japan’s defence minister, Itsunori Onodera, told reporters.

Moon Jae-in and Vladimir Putin in Vladivostok on Wednesday. Moon Jae-in and Vladimir Putin in Vladivostok on Wednesday. Photograph: Sputnik/Reuters

The figure took it’s origin from a revised magnitude through the Comprehensive Nuclear Test Ban Agreement Organisation.

Japan’s revised estimate is way more than the 50-100 kiloton yield provided by the United nations security council. The council is a result of election on Monday on the resolution condemning the North’s recent test, but you will find indications of division over how you can respond.

Putin has stated he opposes fresh economic measures from the regime. As they condemned North Korea’s provocations, Putin stated further sanctions could be useless and ineffective, describing the measures like a “road to nowhere”.

China, too, opposes any measure – namely an oil embargo preferred through the US and Japan – that may foment a domestic crisis large enough topple North Korea’s leader, Kim Jong-united nations, and potentially finish the country’s status like a buffer between China and Columbia, where US forces are based.

Japan’s prime minister, Shinzo Abe, arrives in Vladivostok, where he will meet Vladimir Putin. Japan’s pm, Shinzo Abe, comes to Vladivostok, where he’ll meet Vladimir Putin. Photograph: Alexander Ryumin/Tass

Japan’s pm, Shinzō Abe, is anticipated to broach sanctions with Putin once they meet in Vladivostok on Thursday.

“We need to make North Korea change its current policy and realize that there’s no vibrant future if North Korea continues the current policy,” Abe told reporters before he left Tokyo, japan.

The United kingdom defence secretary, Michael Fallon, told BBC Radio 4’s Today programme on Wednesday: “The US is perfectly titled to create all of the formulations it must safeguard its people, its bases, its very own homeland. They’re clearly doing that right now to make certain obama has all options he needs.”

He stated the united states defence secretary, James Mattis, “and I yet others over the administration make it obvious we must absolutely exhaust every possible diplomatic avenue to obtain this case in check.

“That means working intensively in New You are able to within the next couple of days to obtain a new resolution. This means searching in the existing sanctions and ensuring they’re correctly enforced. This means searching in the Eu level to see what sanctions does apply there and most importantly this means putting more pressure on China to cope with its neighbour. This last test only agreed to be 50 miles in the border of China.”

Geopolitical concerns ongoing to simmer following a nuclear test on Sunday, and among North Korea’s most senior diplomats saying the united states would receive more “gift packages” in the regime.

Han Tae-song, the country’s ambassador towards the Un in Geneva, confirmed that North Korea had effectively conducted its sixth and largest nuclear explosive device test on Sunday.

“The recent self-defence measures by my country … really are a gift package addressed to the one and only the united states,Inches Han told a disarmament conference in Geneva on Tuesday. “The US will get more ‘gift packages’ … as lengthy because it depends on reckless provocations and futile tries to put pressure on [North Korea].”

Tensions between your US and North Korea ongoing to consider their toll on markets in the area on Wednesday. The Nikkei share average fell .7% to some four-month lower in Tokyo, japan at the begining of buying and selling but had mounted a small recovery by mid-mid-day. In Sydney, the ASX200 benchmark index stepped through the same margin as investors chosen safe havens for example gold and government bonds.

The South Korean benchmark index – the Kospi – was .35% lower on Wednesday within the fifth successive day’s losses. Shanghai dropped .4% while Hong Kong’s Hang Seng retreated 1%.

The FTSE100 is a result of slip by .4% if this opens on Wednesday morning. The losses in Asia adopted a selloff on Wall Street in which the Dow jones Johnson industrial average fell 1.1% to 21,753.31 in the worst day in almost three days.

Bank shares brought the slide as bond yields slumped around the increase of money into treasuries. Technology stocks, the greatest gainers this season, also pulled the marketplace lower. Place gold was .2% greater at $1,341.31 an oz after touching $1,344.21 overnight, its greatest since September 2016.

“The risk-off trade is really North Korea front and center,” stated Shaun Zipper, md of investments at US Bank Private Wealth Management. “Also you will find the hurricane a week ago and also the approaching Hurricane Irma, so there is a lot around the plate for that sell to digest.”

The Nikkei endured heavy selling if this opened up for business on Wednesday, falling to 19,254.67, the cheapest level since 1 May. It retrieved to 19,349 points within the mid-day session or lower .2%, however the ongoing strength from the yen, that is having up through the US dollar’s ongoing weakness, is weighing around the Nikkei’s export-heavy listings.

Elon Musk states AI can lead to under developed war

Elon Musk has stated again that artificial intelligence might be humanity’s finest existential threat, this time around by beginning another world war.

The chance clearly weighs heavily on Musk’s mind, because the SpaceX, Tesla and Boring Company chief tweeted at 2.33am La time about how exactly AI could brought towards the finish around the globe – without resorting to the singularity.

Elon Musk (@elonmusk)

China, Russia, soon all countries w strong information technology. Competition for AI brilliance at national level probably reason for WW3 imo.

September 4, 2017

His fears were motivated with a statement from Vladimir Putin that “artificial intelligence may be the future, not just for Russia, however for all humankind … It arrives with colossal possibilities, but additionally threats which are hard to predict. Whomever becomes the best choice within this sphere will end up the ruler around the globe.Inches

Hashing out his ideas in public places, Musk clarified he wasn’t just worried about the possibilities of a global leader beginning world war 2, but additionally of the overcautious AI deciding “that a [pre-emptive] strike is [the] most probable road to victory”.

He’s less concerned about North Korea’s more and more bold nuclear ambitions, quarrelling the result for Pyongyang when they launched a nuclear missile “would be suicide” – which does not have any entanglements that will result in a world war even when it did. His view is the fact that AI is “vastly more risky” compared to Kim Jong-united nations-brought country.

Musk’s anxiety about AI warfare is a driving pressure in the public statements for any lengthy time. Recently, he was one in excess of 100 signatories with a United nations-brought ban of lethal autonomous weapons.

“Once developed, lethal autonomous weapons will grant armed conflict to become fought against in a scale more than ever, and also at timescales quicker than humans can comprehend,” the letter read. “These could be weapons of terror, weapons that despots and terrorists use against innocent populations, and weapons hacked some thing in undesirable ways.

“We don’t have lengthy to do something. Once this Pandora’s box is opened up, it will likely be difficult to close.”

Samsung heir sentenced to 5 years in prison after corruption conviction

A bribery and cronyism scandal which has already toppled a South Korean president claimed a significant business scalp following a court sentenced Lee Jae-yong, the acting chairman of Samsung, to 5 years imprisonment for crimes including offering bribes and perjury.

The millionaire, South Korea’s third-wealthiest man and heir towards the sprawling Samsung empire, have been charged with making large donations to foundations operated by a detailed friend and confidante from the deposed South Korean president, Park Geun-hye, to acquire political favours.

A legal court stated Lee provided bribes anticipating support from Park, who had been still president at that time, based on South Korea’s Yonhap news agency.

Lee’s lawyers stated they’d appeal. “As an attorney I am unable to possibly accept the juridical decisions and acknowledged details active in the verdict,” the Samsung attorney Song Woo-cheo stated outdoors a legal court.

“We appeals from the decision and i’m certain within the appellate trial all of the charges is going to be ignored.”

Samsung lawyer criticises Lee Jae-yong verdict – video

Lee’s situation could finish up being made the decision through the country’s top court, possibly the coming year.

Lee demonstrated no reaction because the court found him responsible for bribery, embezzlement, hiding assets overseas, concealing make money from criminal functions and perjury.

Earlier, South Korean TV adopted him on his journey from the detention center towards the court. He emerged from the justice ministry bus in handcuffs, with white-colored rope round his jacket, and transporting an envelope of documents.

There is huge public pressure in the game to provide a guilty verdict following the wide-varying scandal swirling around Park led to her impeachment this past year and requires Columbia to deal with decades of collusive ties between senior politicians and family-run conglomerates, or chaebol.

As the 49-year-old, who’s also referred to as Jay Y Lee, was able to escape the 12-year term required by prosecutors, his sentence may be the longest provided to any South Korean chaebol leader.

Four some of the best Samsung executives were also charged and received sentences as high as 4 years.

Lee’s conviction may also have effects for Park, considering that their cases are extremely carefully linked. Park faces a potential existence sentence whenever a ruling in her own situation is offered later this season.

Supporters of South Korea’s ousted president Park Geun-Hye wave national flags during a protest demanding the release of Lee Jae-Yong in Seoul on Friday. Supporters of South Korea’s ousted president wave national flags throughout a protest demanding the discharge of Lee Jae-yong in Seoul on Friday. Photograph: Jung Yeon-Je/AFP/Getty Images

Greater than 400 people requested the 30 seats within the public gallery to witness what South Korean media billed because the “trial from the century”.

Outdoors, countless riot police were deployed to avoid confrontations between critics and supporters of Lee and Park, an old dictator’s daughter who had been elected South Korean’s first female president at the end of 2012 and required office in Feb 2013.

Despite claims by his legal team that Lee had little participation within the day-to-day running of Samsung, a legal court ruled he had approved donations to Park’s friend, Choi Soon-sil, to acquire securing government support for that contentious merger of two Samsung affiliates that will strengthen his control of the audience.


What exactly are chaebol and what makes them questionable?


Chaebol companies would be the massive, family-run conglomerates that dominate South Korea’s economy and revel in close links towards the country’s political elite.

They emerged when South Korean businessmen required within the assets of colonial-era Japanese firms after world war ii, and rose to prominence underneath the industrial policies of President Park Chung-hee within the 1960s.

The chaebol are questionable because many South Koreans view them as exemplifying too cosy rapport between business and government. 

The connection was largely tolerated as the chaebol spearheaded rapid economic growth, however a rising earnings gap, youth unemployment and-profile cronyism scandals including that which brought lower former president Park Geun-hye have fuelled public anger. Moon Jae-in, elected to exchange Park captured, ran on the platform of reforming the chaebol. 

Since his arrest in Feb, Lee has was adamant the instalments were created to Samsung without his understanding, with no expectation of favours in the Park administration.

Lee, the scion of South Korea’s wealthiest family and it is greatest company, have been charged with offering $38m (£30m) in bribes to four entities controlled by Choi, with whom Park frequently switched for advice and allegedly gave use of government documents despite the fact that she was without security clearance.

Choi is purported to have setup the principles to aid Park’s policies. Samsung hasn’t denied donating money towards the foundations, but stated it had been forced to do this by Park.

Samsung seemed to be charged with individually giving Choi vast amounts of won to finance her daughter’s equestrian career in Germany. In exchange, Lee allegedly searched for government approval for that $8bn merger of two Samsung affiliates in 2015 – moving that will cement his charge of the Samsung group. The merger was opposed by many people shareholders, but experienced after it had been authorized by the national pension fund, a significant Samsung shareholder.

The situation has at the minimum placed on hold Lee’s tries to exert total control of the Samsung group, which he’s been the de facto mind since his father endured cardiac arrest in 2014.

Investors are worried that his enforced absence can create a leadership vacuum at Samsung – that has a large number of affiliates and assets of $322bn (£250bn) – and harm being able to make key proper decisions.

Samsung hasn’t openly reacted to Friday’s ruling, but employees in the firm were apparently “dumbfounded” and anxious because of its future.

“We were shocked as he was arrested in Feb,” one Samsung insider told Yonhap. “But his conviction originates like a bigger shock. The organization has been around emergency mode because of the leadership vacuum. And Lee’s conviction means the emergency situation continues for any lengthy time.”

Other business figures to possess was trial in Columbia have typically received light sentences, fueling critique that chaebol leaders are given unwarranted leniency through the courts.

They incorporated Lee’s father, Lee Kun-hee, who had been charged of tax evasion in ’09 coupled with a 3-year sentence suspended, with idol judges citing his contribution to South Korea’s economic success and the “patriotism through company from job creation”. He was pardoned four several weeks following the final ruling.

Park Sangin, a professor of financial aspects at Seoul National College, stated shortly prior to the verdict: “Chaebol leaders used to obtain the same sentencing each time. There is a saying known as the ‘3-5 law’ – 3 years sentencing, five years’ probation.

“If Lee gets to be a heavy sentence, it may be viewed as the shattering from the ‘too-big-to-jail’ trend of history.Inches

South Korea’s new president, Moon Jae-in, won a landslide victory in May pledging to control the chaebol and clamp lower on white-colored-collar crime involving corporate tycoons.

Pound rallies against dollar on tight-lipped Yellen speech; oil prices climb ahead of Hurricane Harvey

Drillers battening down the hatches in the US ahead of Hurricane Harvey pushed up crude prices and the UK’s blue-chip oil producers in London yesterday to stop the FTSE 100 sinking into the red as the pound rallied against the dollar late on.

Rigs in key US oil producing hubs were abandoned as the category two hurricane, which could become the most powerful storm to hit the US coast since 2005, approached the mainland. Brent crude, the UK benchmark oil price, climbed as high as $52.68 per barrel as oil majors in Texas and the US Gulf of Mexico curbed production.

The FTSE 100’s oil giants moved in lockstep with the price increase with BP gaining 2.35p to 445.5p and Royal Dutch Shell ‘B’, the more commonly held type of the company’s shares in the UK, pushing up 10.5p to £21.73.

Robust metal prices on expectations of tightening supply in China helped blue-chip miners dominate the FTSE 100 leaderboard. BHP Billiton advanced 20p to £14.37 while rival Rio Tinto climbed 15.5p to £36.61.

The commodity stocks’ huge weighting stopped the wider FTSE 100 from reversing all of its gains as US Federal Reserve chair Janet Yellen’s speech at the Jackson Hole central banking conference disappointed news-hungry traders to send the dollar sliding against the pound.

Sterling’s afternoon bounce towards the $1.29 mark lampooned blue-chip companies’ solid early gains with the UK’s benchmark index closing 5.6 points lower at 7401.46.

Hopes that the merger of Standard Life and Aberdeen Asset Management will breathe new life into newly-formed Standard Life Aberdeen helped it climb 5.3p higher to 441.6p. Upgrading it to “buy”, Citi analyst Haley Tam said that the company could benefit from synergy savings and a recovery in its Asia Pacific and emerging market franchises.

Amazon announcing that it will begin slashing food prices at newly-acquired Whole Foods stoked expectations of a new player in the supermarket price war to pull down London-listed grocers. Tesco slumped towards the bottom of the FTSE 100 leaderboard, shedding 3.3p to 184.2p, while J Sainsbury dipped 1.1p to 236.1p.

On the FTSE 250, engineer Weir Group inched up 24p to £18.13 after broker Peel Hunt bumped up the Scottish firm to its “buy” list, citing improved “book-to-bill” figures in its minerals and oil and gas departments.

Analyst Harry Philips said that the two business were driving Weir’s momentum and that the revival of the shale industry in the US as the price of crude rises had proven that Weir can generate “substantial” profit growth in the $50 per barrel oil price environment.

Finally elsewhere on the mid-cap index, IT services provider Computacenter soared 137p to £10.18, a 16pc surge, after upping its full-year earnings guidance as it posted a 66pc rise in pre-tax profit. Bucking the industry’s gloomy outlook, the company’s chief executive Mike Norris said that he had “never been more optimistic about the market’s potential”.


Markets wrap: US Fed chair Janet Yellen speech at Jackson Hole disappoints; ECB’s Mario Draghi up next 

Mario Draghi is due to speak this evening at the Jackson Hole conference

The dollar weakening following Janet Yellen’s disappointing speech at the Jackson Hole central banking conference has pulled down equity markets in Europe this afternoon. Weakened by the euro and pound’s renewed strength against the greenback, the big exporters pared early gains with stock markets across Europe slipping into the red.

The FTSE 100’s fall was softened by the oil and mining giants gaining on robust commodity prices with Brent crude rising to as much as $52.68 per barrel as production is curbed in Texas and the US Gulf of Mexico ahead of Hurricane Harvey.

ECB president Mario Draghi is up next at Jackson Hole but again few hints over the central bank’s next moves on monetary policy are expected to be teased out of the Italian. Traders will hang onto to every word nonetheless and, as has been seen from Ms Yellen’s speech this afternoon, markets will move on what’s not said as well as what is.

IG’s chief market analyst Chris Beauchamp said this on today’s action at Jackson Hole

“As the week winds down in London, it’s one down and one to go in terms of today’s big central bank speeches. Janet Yellen has given the dollar a shove lower in her speech, but a lack of hawkish commentary and no excursions into the realms of monetary policy will leave dollar bulls disappointed.

“Little is exactly what we expect from Mr Draghi too, especially given that he, arguably, faces an even more divided committee of policymakers than Ms Yellen.”


Yellen speech sinks European equities

The FTSE 100 sunk as the pound rallied against the dollar

While equities in Europe held up for a little while against the effects of the pound and euro rallying on the dollar, they have since plunged as Janet Yellen’s speech ripples through the markets.

The FTSE 100 has now nearly pared all of today’s gains. After rising as much as 0.4pc in today’s session, the blue-chip index has now sunk into flat territory.

Has that speech ruined Janet Yellen’s chances of a second term?

Ms Yellen’s defence today of the post-financial crisis regulation, which Donald Trump has vowed to rip up, could have scuppered her chances of a second term but the US president may have nowhere else to turn.

His chief economic advisor Gary Cohn has been favourite to take the role but tensions between him and Mr Trump have risen since the events in Charlottesville. It has been reported this afternoon that Mr Cohn had drafted but never delivered a resignation letter due to Mr Trump’s limp criticism of the white supremacists behind the violence.

Here’s Capital Economics’ chief US economist Paul Ashworth’s take on what this means for Ms Yellen’s future.

“It is still possible that Trump could choose a third candidate. But he has already made plain his preference for someone who will keep interest rates low, so that would seem to rule out many of the more conservative Republican candidates.

“Most of the debate surrounding Yellen versus Cohn focuses on how they would differ on monetary policy. But, to be honest, we suspect that the differences between the two would be minor, not least because the Chair only has one vote on the FOMC. Arguably the much bigger difference is between their attitudes to regulation.”


Dollar sinks following Yellen speech; Hurricane Harvey shuts down US oil production

Stocks in the US has largely dismissed Janet Yellen’s quite dull speech at Jackson Hole with the Dow Jones climbing 0.4pc and S&P 500 jumping 0.6pc early on. As in Europe, oil and gas stocks are leading the way as the price is pulled up by the production shutdown in Texas with Hurricane Harvey on it way to the US coast.

The dollar has been the main loser from the Fed chair’s speech with the pound now heading towards the $1.29 mark against the greenback, a 0.7pc rise today.

Was that the final hurrah from Ms Yellen with Donald Trump soon deciding her future?

Here’s a little snippet from her speech:

“We can never be sure that new crises will not occur, but if we keep this lesson fresh in our memories–along with the painful cost that was exacted by the recent crisis–and act accordingly, we have reason to hope that the financial system and economy will experience fewer crises and recover from any future crisis more quickly, sparing households and businesses some of the pain they endured during the crisis that struck a decade ago.”


British supermarkets knocked after Amazon slashes prices at Whole Foods

Amazon’s takeover of Whole Foods was approved last night

Fresh fears about Amazon’s assault on the grocery landscape has knocked shares in Britain’s food retailers after the online giant announced that it would start slashing prices at Whole Foods as soon as next week.

Just two months ago Amazon announced its biggest ever takeoverwith an audacious £10.7bn swoop on upmarket grocery chain Whole Foods and the online giant is wasting no time in using the deal to propel its near-decade long push into groceries.

Whole Foods, which is known for its organic produce and fresh, natural produce, has more than 460 shops with the bulk of stores in the US and Canada and seven in the UK. 

Amazon has announced that upon closing its takeover on Monday it will start lowering prices of Whole Foods’ staple groceries. Industry experts say the move will broaden Whole Foods’ appeal to more customers and threaten supermarket rivals. 

Read Ashley Armstrong’s full report here


Yellen speech at Jackson Hole disappoints; dollar sinks

Janet Yellen gave little away in her speech at Jackson Hole

Janet Yellen’s speech has just been released to the press and it has largely disappointed traders on the currency markets. Nothing much in there on monetary policy. Her speech entitled ‘Financial Stability a Decade after the Onset of the Crisis’ was about, well, financial stability.

The main message coming out of the speech is that any changes to financial regulations should be “modest”.

Tight-lipped Yellen has sunk the dollar on the forex markets with the pound rising 0.5pc to $1.2857 against the greenback, its highest level in three days, in response to the disappointment.

I’ll try and pick out some highlights from the speech for you all. That’s if I can find any.


US durable goods orders distorted by Boeing figures

Boeing’s huge haul in June distorted the overall figures

There’s a tiny bit of economic news eking out of the United States ahead of Janet Yellen’s speech but it comes with a large caveat.

Durable goods orders in the US dived by 6.8pc in July, a sharp drop from the 6.4pc increase the previous month. Analysts have been quick to point out, however, that Boeing’s bumper 184 aircraft order haul in June thanks to the annual airshow in Paris has completely distorted the figures.

Excluding the transportation sector, orders actually rose above expectations to 0.5pc from 0.1pc in June.


Samsung heir jailed for five years on corruption charges in bribery scandal

Lee Jae-yong, pictured on Friday, has been detained since February

A South Korean court has sentenced the billionaire Samsung heir Lee Jae-yong to five years in prison after finding him guilty of offering bribes to the country’s former president and other crimes.

It said Lee was also guilty of embezzlement, hiding assets overseas, concealing profit from criminal acts and perjury.

The court said Lee hoped bribes for Park Geun-hye at the time she was president and her close friend Choi Soon-sil would secure government support for a merger that strengthened Lee’s control over the Samsung empire and its flagship Samsung Electronics at a crucial time. Park and Choi also have trials under way.

Read the full report here


US Fed chair Janet Yellen to speak soon; Trump to decide her fate soon

Janet Yellen is not expected to give much away regarding monetary policy

With US Federal Reserve chair Janet Yellen due to speak at 3pm, let’s have a quick look at what we can expect.

One’s suspects given the title of the speech, ‘Financial Stability’, that the hype building around today’s two appearances from central bank heads might end up being much ado about nothing.

But the surprise split at the Federal Reserve in its latest policy minutes over whether inflation is strong enough to withstand another rate hike before the end of the year gives a slight edge to proceedings. 

Reports that US president Donald Trump will soon decide whether Ms Yellen will have a second term as chair (they don’t get on famously) has added a little more intrigue to the speech.

UBS’ US chief economist Seth Carpenter commented, however, that there was “really no need to skip lunch” over Ms Yellen’s speech.

He commented:

“We suspect that Chair Yellen will take this opportunity to discuss the distinction between financial stability considerations and financial conditions more broadly. She will take stock of the signal from historically low interest rates and the forces that determine those rates.

“She will likely reiterate that post-recession regulation has made banks safer. She will allow for some adjustment of that regulation, but she will push back against the idea of wholesale financial deregulation. She will likely avoid discussion of monetary policy, as she will see no need to further communicate the FOMC’s intentions at this point.” 

Derek Halpenny, European head of global markets research at MUFG, is a little more optimistic that something a little more substantial on monetary policy can be teased out of Ms Yellen:

“Yellen’s speech is on financial market stability and given the reference to asset valuations in the minutes from the July meeting, which Fed Staff concluded had increased from “notable to elevated”, Chair Yellen may expand on this.

“Yellen may believe the markets need reminding that the Fed remains on course to raise the federal funds rate one further time this year. This would merely be a repeat of current Fed communication and hence is unlikely to prompt any major lift for the US dollar.”


Germany achieves near record budget surplus of €18.3bn

The figures are a boost for Angela Merkel, who is seeking a fourth term as chancellor

Germany achieved a near record budget surplus of €18.3bn (£16.8bn) in the first half of 2017, according to government figures released on Friday.

The timing of the figures could not be better for Angela Merkel, who is seeking a fourth term as chancellor in elections next month.

The surplus is the second largest Germany has recorded since reunification in 1990. The country recorded an even bigger surplus of  €28.8bn in the second half of 2000, but that was boosted by a government windall from the sale of mobile phone licenses.

By contrast, the surplus for the first half of 2017 was fuelled by higher tax revenues than expected, as the German economy continues perform strongly.

Read Justin Huggler’s full report here


Lunchtime update: Rising oil and metal prices lift FTSE 100

Hurricane Harvey approaching the coast of Texas has prompted US drillers to shut off production, raising oil prices

Investors have thrown caution to the wind ahead of the Jackson Hole central banking conference with European stocks rising into positive territory after a hesitant start to trading.

Ahead of the key speeches by US Federal Reserve chair Janet Yellen and ECB president Mario Draghi, the FTSE 100 has pushed up 0.4pc with troubled doorstep lender Provident Financial clawing back another 19pc after announcing a shake-up in its struggling home credit division.

Tightening supply lifting oil and base metal prices has helped the FTSE’s oil majors, BP and Shell, and mining giants, BHP Billiton and Rio Tinto, rise towards the top of the index. 

Brent crude has risen 0.6pc today to $52.37 per barrel as drillers in Texas shut off production ahead of Hurricane Harvey.

With little economics data to move currency markets, the pound is taking advantage of a nervy dollar and euro ahead of Jackson Hole, rising to $1.2837 and €1.0862 against the two currencies.

Here’s Spreadex analyst Connor Campbell’s take on today’s currency markets:

“As for the forex markets, the pound continued to be the main beneficiary from the euro and dollar’s pre-Jackson Hole reticence, rising 0.2% against both. To be fair to those currencies, they can afford such a meagre decline – against the euro sterling is still loitering near 8 year lows, while cable has seen its early summer growth rapidly unravel across August.”

Here’s the current state of play in Europe: 

FTSE 100: +0.39pc

DAX: +0.38pc

CAC 40: +0.28pc

IBEX: +0.38pc


Fiat Chrylser tries to again kill speculation of Chinese takeover

Fiat Chrysler shares have surged despite denials of a deal

Fiat Chrysler has again attempted to end speculation that it could sell part of its portfolio with a statement made at the behest of the Italian financial regulator in the wake of a surge in the Italian-American car manufacturer’s share price. 

Milan-listed FCA’s shares have risen almost 20pc in the past week as rumours swirled that Chinese car company Great Wall Motors wanted to buy the Italian-American group’s Jeep brand.

On Monday Great Wall said it had “an intention to make the purchase”, but soon reversed away from the statement, adding it had “not generated concrete progress as of now”.

FCA, headed by Sergio Marchionne, released a statement later that day saying it “had not been approached by Great Wall relating to Jeep or any matter relating to its business”, adding it was “fully committed” to its long-term business plan.

However, FCA’s shares have continued to rise despite the denials of a prospective deal, prompting the release of this latest statement.

Read Alan Tovey’s full report here


The effects of the ECB tapering its quantitative easing programme

Mario Draghi defended the central bank’s QE programme at his speech in Lindau, Germany, earlier this week

ECB president Mario Draghi has been heavily criticised for the central bank’s huge monthly asset purchases to boost growth but the central bank head vehemently defended quantitative easing at a speech in Lindau, Germany, on Wednesday. 

But how would Mr Draghi and the ECB signalling the winding down of its €60 billion-a-month quantitative easing programme affect stocks and companies?

Central banks snapping up government bonds from investors through QE has the effect of forcing them to put their money into riskier assets such as corporate bonds and stocks.

Buying large amounts of government bonds also has the effect of lowering interest rates, making borrowing cheaper and stimulating the economy, which should boost companies’ growth and thus push up their share prices.

The central bank is now beginning to believe that the currency bloc’s economic performance is strong enough to withstand removing this stimulus although Mr Draghi will likely steadily unwind the programme to avoid shocking the market, trimming purchases of bonds rather than selling off any of the existing stock of assets bought under the QE scheme.

There is also the unknown effect of removing such stimulus on market confidence, hence Mr Draghi’s very cautious approach which is expected to continue today.


Draghi boxed into a corner for Jackson Hole speech

Mario Draghi is expected to be tight-lipped over monetary policy

Expectations that today’s speeches at Jackson Hole will be game-changing are low but central banking figures have thrown a few surprises to the market this summer.

ECB president Mario Draghi is, however, boxed into a corner over signalling any changes. To do so would lift the euro and thus would then weigh on inflation to hold back the ECB’s plans to tighten monetary policy.

Despite buoyant growth in the eurozone of late, inflation has remained persistently weaker than the central bank’s target rate and the figures picking up is considered a key prerequisite to tapering the ECB’s quantitative easing programme.


Miners rise as base metals head for strongest week of gains in 11 years

Miners have been lifted as base metals head for their best week of gains in over a decade

London’s global miners are taking up many of the top spots on the FTSE 100 leaderboard with dual-listed BHP Billiton jumping 2.2pc and Anglo-Australian rival Rio Tinto following just behind, rising 1.7pc early on.

The miners have been lifted by base metals being on course for their strongest run of weekly gains in 11 years underpinned by strong demand and incoming supply curbs in China.

Troubled doorstep lender Provident Financial has continued to rally with this morning’s shakeup in its home credit division being cheered by investors. Shares have jumped 21pc, propelling it to the top of the FTSE 100 for a third consecutive day. 

That still leaves it 48pc lower than its closing price on Monday, however, just before its profit warning.


Spotify moves closer to listing as it strikes deal with Warner Music

Daniel Ek, chief executive officer and co-founder of Spotify

Spotify has taken a major step towards a public listing after agreeing a long-term licensing deal with Warner Music Group.

The music streaming service’s agreement with Warner, one of the world’s biggest record labels, follows more than two years of negotiations.

“It has taken a while to get here,” said Warner’s chief digital officer Ole Obermann. “But it has been worth it, as we have arrived at a balanced set of future-focused deal terms”.

Spotify has now struck deals with leading record labels Sony, Universal and Warner, and could float on the New York Stock Exchange by the end of the year. It has been reported that the company will not have an initial public offering when it does go public.

Spotify continues to grow ahead of rivals Amazon and Apple, and last month reached 60m paying customers.

Read Sam Dean’s full report here


German GDP confirmed at 0.6pc; consumer spending grows at joint-fastest since 2011

Strong economic growth is key for chancellor Angela Merkel ahead of next month’s federal elections 

The highlight of a very light economics schedule this morning was final German GDP figures, which confirmed that Europe’s engine room grew at 0.6pc in the second quarter.

One of the more interesting takeaways from this morning’s data is that Germany’s quarter-on-quarter consumer spending grew at 0.8pc, its joint-fastest since 2011 and a stark contrast to the UK’s measly 0.1pc spending growth shown in yesterday’s ONS release.

Pantheon Macro’s eurozone economist Claus Vistesen provided this analysis of this morning’s figures:

“Leading indicators suggest that domestic demand will continue perform strongly in the second half of the year, but we think the quarter-on-quarter run-rate in headline GDP growth will slow to 0.4%-to-0.5% quarter-on-quarter. Full year growth of above 2.0%, however, is a very good bet. “


Provident Financial shares bounce back after management shake-up

Provident Financial chief executive Peter Crook quit following the profit warning

Shares in Provident Financial jumped by more than 17pc in early trading as the troubled FTSE 100 company announced a shake-up in management and the return of a former managing director.

Chris Gillespie, who stepped down from the company in 2013, has been appointed as the managing director of the Provident home credit business, replacing Andy Parkinson.

Provident said it has begun a business review as it looks to “stabilise” after shares plunged more than 66pc earlier this week.

The fall, which followed a fresh profit warning, the scrapping of its dividend and the departure of chief executive Peter Crook, wiped around £1.7bn off Provident’s value.

Read Sam Dean’s full report here


Yellen vs Draghi better than Mayweather vs McGregor?

Will Yellen vs Draghi be as explosive as Mayweather vs McGregor 

Traders have locked onto speeches by US Federal Reserve chair Janet Yellen and ECB president Mario Draghi as the big market movers of the day. Unfortunately for European markets, Mr Draghi’s speech at Jackson Hole comes long after the closing bell on stock markets over here.

Reports last week indicated that Mr Draghi will not signal a major shift in policy at the central banking conference even though it was initially thought that he would use the event to announce the winding down of the ECB’s €60bn-a-month asset purchasing programme. 

Mr Draghi gave little away at a speech in Lindau, Germany, earlier this week but his tight-lipped dovish press conference following the latest ECB policy decision still managed to stir currency markets. Traders on the forex markets will latch onto to any hints from the ECB president.

For Henry Croft, research analyst at Accendo Markets, today’s dual for market attention between the two heads of central banks is even more tantalising than Mayweather vs McGregor.

He said:

“Key speeches from Federal Reserve Chair Yellen and ECB President Draghi will likely drive sentiment heading into the elongated weekend for UK traders, with markets looking for clarity on both central banks’ efforts to reduce accommodative policy. The US dollar and Euro be subject to increased price movement as a result.”

I agree Henry but I’m not sure today’s Jackson Hole conference will be quite as big a box office hit.


Agenda: Markets turn their attention to Draghi and Yellen speeches at Jackson Hole

US Federal Reserve chair Janet Yellen is due to speak at 3pm (BST) at Jackson Hole

A mixture of August inertia and investors turning their attention to the Jackson Hole central banking conference held stock markets roughly in flat territory yesterday. The FTSE 100 was an exception, climbing 0.3pc, and this morning it has inched up a little further with Provident Financial rising 6.4pc after reorganising its troubled home credit unit.

The markets’ tunnel vision has narrowed even further today with US Federal Reserve chair Janet Yellen due to speak at 3pm (BST) and the much awaited appearance by ECB president Mario Draghi a little later at 8pm. 

Neither are expected to hint at major policy shifts, despite early indications that the latter speaker would lay out the ECB’s plans to wind down its quantitative easing programme. Nonetheless, traders will be hanging onto their every word for any subtle deviations in the rhetoric. It is August after all.

Traders’ obsession with the central banks isn’t being helped this morning by a dearth of economics data. Nonetheless, sterling has moved higher against the euro, nudging up to €1.0868, while against the dollar, the pound has held its position at just over $1.28 overnight.

Interim results: Henry Boot

AGM: Sysgroup

Economics: Durable goods orders m/m (US), Revised UoM consumer sentiment (US), Revised UoM inflation expectations (US), Final GDP q/q (GER), Ifo business climate (GER)