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Wed, 26th April 2017

Anirudh Sethi Report

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Archives of “April 18, 2017” Day

Pentagon Considers Shooting Down North Korea Missile Tests

Just when a few hours had passed without any escalation around the Korean Peninsula, The Guardian reports that the US military is considering shooting down North Korean missile tests as a show of strength to Pyongyang according to two sources briefed on the plans.

As the USS Carl Vinson heads towards the peninsula, along with two oither carriers, the Pentagon is looking for ways short of war to pressure North Korea into denuclearization, particularly if Pyongyang goes forward with an anticipated sixth nuclear test.

The option, which defense secretary James Mattis has briefed to Congress, has, as The Guardian reports, yet to mature into a decision by the military to intercept a tested missile. One US official said the prospective shoot-down strategy would be aimed at occurring after a nuclear test, with the objective being to signal Pyongyang that the US can impose military consequences for a transgression Donald Trump has said is unacceptable. But experts and former officials said shooting down a North Korean missile during a test risks an escalation that Washington may not be able to control, one that risks war on the Korean peninsula and potentially devastating consequences to allies South Korea and Japan.

Why the UK election call is boosting the pound

The market is giving a huge endorsement to Theresa May

If I had to rank major political leaders, the top two would be easy.

The ranking is purely based on the ability to win, hold onto power and execute an agendas.

First is Angela Merkel, beyond any doubt. She’s loathed in Europe but she has been Chancellor for 11 years, navigated the crisis, boosted German employment and is probably going to win the next election.

Second is Abe. Merkel benefits from notoriously stable Chancellorships — there have only been 8 since WWII. It’s the opposite in Japan where leadership has changed hands 34 times since the war. In a couple months, he will be the longest-serving Prime Minister in 60 years. Abenomics hasn’t been a miracle but the IMF did just raise Japan’s growth forecast and he did a masterful job of cozying up to Trump.

That brings us to Theresa May, who has only been on the job for 9 months but could easily be considered #3 already. She was throw into a mess created by David Cameron and a divided party. It only took her days to devastate the Conservative leadership race. She followed that by outlining a consistent and coherent Article 50 plan that she executed.

The market wobbled on the election rumours at first but it’s now clear that it’s a brilliant strategy. With Article 50 out of the way, it’s no longer a Brexit referendum. On top of that, she’s popular, the opposition is in shambles and she can frame the election as a vote to give her a strong mandate to get a good deal from the EU.

So it only took the market minutes to assume she’s going to win. Now the pound is pricing in the assumption that her stronger mandate will give her a better mandate to negotiate without the threat of an election.

The pound is pricing in the possibility (likelihood?) that not only will she win the election, but she will also win Brexit negotiations.

Unfortunately, she will run into the #1 name on the list when the real negotiations start. That will be a heavyweight title fight for the ages.

Tue 18 Apr 2017 16:14:39 GMT
Author: Adam Button
Author: Adam Button
5

The market is giving a huge endorsement to Theresa May

If I had to rank major political leaders, the top two would be easy.

The ranking is purely based on the ability to win, hold onto power and execute an agendas.

First is Angela Merkel, beyond any doubt. She’s loathed in Europe but she has been Chancellor for 11 years, navigated the crisis, boosted German employment and is probably going to win the next election.

Second is Abe. Merkel benefits from notoriously stable Chancellorships — there have only been 8 since WWII. It’s the opposite in Japan where leadership has changed hands 34 times since the war. In a couple months, he will be the longest-serving Prime Minister in 60 years. Abenomics hasn’t been a miracle but the IMF did just raise Japan’s growth forecast and he did a masterful job of cozying up to Trump.

That brings us to Theresa May, who has only been on the job for 9 months but could easily be considered #3 already. She was throw into a mess created by David Cameron and a divided party. It only took her days to devastate the Conservative leadership race. She followed that by outlining a consistent and coherent Article 50 plan that she executed.

The market wobbled on the election rumours at first but it’s now clear that it’s a brilliant strategy. With Article 50 out of the way, it’s no longer a Brexit referendum. On top of that, she’s popular, the opposition is in shambles and she can frame the election as a vote to give her a strong mandate to get a good deal from the EU.

So it only took the market minutes to assume she’s going to win. Now the pound is pricing in the assumption that her stronger mandate will give her a better mandate to negotiate without the threat of an election.

The pound is pricing in the possibility (likelihood?) that not only will she win the election, but she will also win Brexit negotiations.

Unfortunately, she will run into the #1 name on the list when the real negotiations start. That will be a heavyweight title fight for the ages.

IMF hikes UK growth forecast to 2% in 2017

The International Monetary Fund has delivered another hike to its UK growth forecast, reversing nearly all of the downgrade it pencilled in after last summer’s Brexit vote.

In its latest assessment of prospects for global growth, the Washington-based fund predicted the UK economy will grow this year by 2 per cent, an increase of 0.5 percentage points from the forecast it made in January. The IMF also upgraded its UK growth forecast for next year, from 1.4 per cent to 1.5 per cent.

The world economy will grow faster than previously expected this year thanks to increased trade, investment and manufacturing said the IMF, which also warned the threat of protectionist policies meant “the balance of risks remains tilted to the downside”.

The revision came primarily due to better than expected economic news from Europe, China and Japan and a broad-based recovery in global manufacturing since the middle of 2016.

Before the UK’s EU referendum last year, the IMF forecasted that the UK economy would grow 2.2 per cent in 2017. But it cut the forecast to 1.3 per cent last July, weeks after the Brexit vote, and downgraded its forecast further, to 1.1 per cent, in October.

French election: “Everyone is petrified”

The latest on the escargot race in France from Bloomberg:

  • France’s presidential race enters its final stretch
  • No clear winner in sight
  • “Everyone is petrified,” said Edouard Lecerf, head of the political department at polling firm Kantar Sofres. “The challenge for each of the four candidates is to seek new votes without alienating their base. French voters are like fish, like eels — very slippery.”
  • Almost a third of the electorate still undecided
  • Front-runners clustered around 20 percent in the polls for the first round on April 23, the race is the most unpredictable the country has seen in recent history

Australian PM Turnbull says he is abolishing 457 visas

This is significant news for Australia

The 457 visa is the most commonly used program for Australian or overseas employers to sponsor skilled overseas workers to work in Australia temporarily.
Xenophobia rockin’ it in Australia!
Says the PM:
We’re putting jobs first, we’re putting Australian’s first
Australian workers must have priority for Australian jobs
Hmmm – let’s see what replaces it … If nothing then there will have to be a big increase in education in Australia to replace skilled migrants.
Yeah, right ….

Global Financial Market Stress Soars To 2017 Highs

April looks set to be the worst month since August 2015 (when China devalued and turmoil spread across the world) for global financial stress.

As Bloomberg reports, rising geopolitical concerns are pushing a gauge of anxiety for global asset classes to this year’s high.

Overnight US Market : Indices end the session at the highs

Late day rally takes the major indices to highs. Impressive gains for the day.

The US major indices were given a late day push on comments from Treasury Secretary Mnuchin that tax cuts may still be forthcoming in 2017.  That helped the indices to new session highs. We are closing near the day highs as well.
  • The S&P is closing up 20.06 points or +0.86% to 2249.01. The high reached 2249.14. The low 2332.51. The 50 day MA comes in at 2353.13. A move back above that MA would be more bullish for the S&P
  • The Nasdaq is closing at 5856.789, up 51.639 points or +0.89%. Like the S&P it is closing at the highs for the day.
  • The Dow rose by 183.67 points to 20636.92. The low reached 20484.75. The high extended to 20644.41.