CDN NEWS | 
US NEWS 
May 15, 2018, by Lorcan Roche Kelly
(Bloomberg)
Muddy waters
Commerce Secretary Wilbur Ross told reporters yesterday that the U.S. is exploring alternative punishments for China’s ZTE Corp. for the “inappropriate things” the company has done, saying any enforcement action would be separate from trade talks. His position seemed to be contradicted by President Donald Trump who later drew a connection between any deal on ZTE and a wider trade agreement. Apple Inc. Chief Executive Officer Tim Cook said he told the president that tariffs are the wrong approach to take on trade with China, while IMF Managing Director Christine Lagarde warned that a surge in protectionism would sap global growth.
Rate grab
Turkish President Recep Tayyip Erdogan said he intends to tighten his grip on the economy and take more responsibility for monetary policy should he win next month’s election. In an interview with Bloomberg Television in London, Erdogan gave his take on monetary policy saying “when you look at the cause and effect relationship, the interest rate is the cause and inflation is the result. The lower the interest rate is, the lower inflation will be.” The Turkish lira dropped to a record low against the dollar after his comments were published.
Sales
U.S. retail sales data for April are due at 8:30 a.m. Eastern Time, with analysts expecting a slowdown to 0.3 percent from 0.6 percent in the headline number. In today’s report, there are two major questions economists are looking for answers to: How much are tax cuts boosting spending, and to what extent are higher gasoline prices hindering it? Michelle Meyer, head of U.S. economics at Bank of America Corp., warned that colder-than-normal weather last month may prove a temporary headwind for retail sales.
Markets mixed
Overnight, the MSCI Asia Pacific Index lost 0.8 percent, while Tencent Holdings Ltd. was among the biggest losers in the region ahead of its earnings report scheduled tomorrow. Japan’s Topix index closed broadly unchanged. In Europe, the Stoxx 600 Index was steady at 5:40 a.m. as investors awaited clarity on Italy’s government and Trump’s trade policies. S&P 500 futures pointed to a drop at the open, the 10-year Treasury yield was at 3.013 percent and gold was lower.
European data
Economic growth in the euro area was confirmed at 0.4 percent in this morning’s second reading of first-quarter GDP, with Germany’s economy growing at a slower-than-expected 0.3 percent. There were also signs of a slowdown in growth numbers from central and eastern Europe. There was brighter news in the U.K. where wage data showed that workers there got their first real wage increase in more than a year and unemployment held at a 43-year low of 4.2 percent, though productivity declined.
Share This:
