Brexit
-Irish Times: The Irish gvt have refused to engage in talks with the UK about no-deal prep including how to avoid checks at the border until the UK leaves the EU, adding they’re a unilateral EU matter bit.ly/2Zfw7hK
-Times: PM Johnson will tell Chancellor Merkel today that parliament cannot stop Britain leaving the EU w/out a deal & there’ll be no deal unless the Irish backstop is scrapped bit.ly/2Z0uOIe
-BBC: PM Johnson will meet Chancellor Merkel later today in Berlin where he’s expected to reiterate his call for Irish backstop plan to be scrapped bbc.in/2znsZWR
-BBC: the UK govt will start automatically enrolling UK firms in a customs system as it speeds up preps for a no deal Brexit bbc.in/2Z6BIf1
US
-Fed’s Daly(Online Forum): Labour market is strong, consumer spending is healthy; she backed Fed decision to cut rates at July’s FOMC ; doesn’t think the US is headed toward a recession; from incoming data , sees solid domestic momentum pointing towards eco expansion ... but sees considerable headwinds from weaker global growth & trade uncertainties; these are contributing to fears seen in markets that a downturn is round the corner
-Fed’s Quarles: doesn’t comment on mon pol
-Politico : Trump administration braces GOP donors for a potential moderate & short recession; WH considering cuts to corp & payroll taxes, among other measures, to cushion US economy politi.co/2Zi1Yye
-WSJ: Pres Trump is examining various tax cuts to bolster the US economy; indexing capital-gains taxes to inflation is among the measures considered...reiterates call for the Fed to cut rates by 100bps on.wsj.com/33JH4vu
-DoubleLine’s Gundlach: the Fed has lost control of interest rates as evidenced by Fed Funds trading higher than any other part of Tsy yield curve reut.rs/2NnSX4n
Dublin refuses to engage with UK on plan for no-deal Brexit
irishtimes.com
Irish and EU leaders will not discuss how to manage Border until Britain leaves EUOvernight News
Brexit
-HoC’s Speaker Bercow: Wouldn’t allow PM Johnson to close parliament
-ITV: Former UK Chancellor Hammond said he wants PM Johnson to commit to a deal prior to leaving the EU bit.ly/2Z7bkRo
Europe
-Italian Dep PM Salvini: Citizens income measure would need require reviewing if League won elections; Giorgetti would be Treasury Min if League won elections
Trade
-According to people familiar: Chinese officials are sticking to the plan to visit Washington in September; Chinese negotiators aren’t very optimistic of any progress
APAC
-Chinese July Retail Sales: +7.6% y/y vs +8.6% cons
-Chinese July Ind O/P: +4.8% y/y vs +6.0% cons
-Chinese Fin Min : Will further cut gvt spending & ensure tax cuts; will prevent local gvt debt risks
-China Stats Bureau: Trade frictions impact is controllable; economy’s likely to remain stable in the next period; inflation is likely to remain stable; employment mkt is stable; auto sales were the main drag on July retail sales; economic growth still in proper range
-China set the yuan ref rate at 7.0312 vs 7.0502 exp, (7.0326 y’day)
-Australian Q2 Wage Price Index: +0.6% q/q vs +0.5% cons; 2.3% y/y in-line
Oil/Geopolitics
-API Weekly Inventories: Crude +3.7m vs -2.5m exp; Cushing -2.2m; Gasoline +3.75m; Distillates -1.3m
US Close News
North America
-US Sells $28bn of 52w Bills: b/c 2.66 vs 2.87 prev
-NY Fed: treasury purchases from august 14 to September 10 have total maximum purchase size of $20.275Bn
EZ
-Italys Salvini: Proposes accepting 5 Stars demand to quickly reduce number of parliamentarians but must hold election
-Italys Senate: Rejects league call to hold no confidence debate in gvt on Wed; To debate no conf motion in gvt on Aug 20th
Trade
-President Trump: Call with China was very productive; China would very much like to do something on trade; Delayed tariffs for Christmas season in case it had an impact on shopping; Always been optimistic about China trade deal
- @EdwardLawrence: USTR Says Sept 1st most of $300 Billion of Chinese imports will be under 10% tariff. A large list that includes cell phones, laptops, and some clothes will be delayed until Dec 15th. Chinese Commerce Ministry tells us they agreed to nothing in return for delay
-US Sec of State Pompeo: Had an extended exchange of views on US China relations with top Chinese diplomat Tang Jiechi
UK
-Senior US admin official: WH’s Bolton & UK Trade Sec Liz truss discussed possibility of Trump & Johnson signing a road map declaration toward a trade deal at G7 summit; UK-US. road map declaration would be signal of renewed cooperation and US determination to support Britain through the Brexit process; US and Britain discussing a partial trade agreement that could take effect on Nov. 1; Bolton and British finance minister Sajid Javid discussed possibility of a temporary trade agreement that covered everything
Philip Hammond accuses Boris Johnson of trying to 'wreck' chances of new Brexit deal
itv.com
Former chancellor Philip Hammond has accused the Prime Minister of trying to "wreck" the chances of a new Brexit deal, by making demands the EU will not accept. Mr Hammond continued that Boris Johnson would commit a betrayal of the referendum if he enacted a no-deal Brexit by listening to the “une...Overnight News UK/EZ..
Boris Johnson Says There Are ‘Bags of Time’ Left to Renegotiate Brexit With EU- U.K. Prime Minister Boris Johnson urged European Union leaders to show "common sense" and re-write the Brexit divorce deal, as he steps up preparations to take the country out of the bloc without one. With just 84 days to go until the U.K.’s scheduled departure from the EU on Oct. 31, Johnson said there’s plenty of time for his European counterparts to renegotiate the Withdrawal Agreement struck by his predecessor Theresa May, which was rejected three times in Parliament.
www.bloomberg.com/news/articles/2019-08-08/u-k-s-johnson-says-bags-of-time-to-renegotiate-brexit-...
Boris Johnson eyes election in ‘days after’ Brexit- Sterling see-saws after officials reveal poll timing if PM loses no-confidence vote
www.ft.com/content/f9246608-b9bf-11e9-8a88-aa6628ac896c
U.K. Chancellor Delays Full Spending Review to 2020- It underlines the uncertainty over the outlook for the economy, given the growing risk that Britain crashes out of the European Union without a deal on Oct. 31. A no-deal Brexit would lead officials to sharply revise their forecasts for growth and borrowing. The Treasury said in a statement it will hold a fast-tracked spending round, setting budgets for day-to-day spending for the 2020-21 fiscal year, which begins in April. Budgets for capital spending are already in place for the year.
www.bloomberg.com/news/articles/2019-08-08/u-k-chancellor-javid-delays-full-spending-review-to-20...
UK must leave EU on Oct. 31, PM Johnson says when asked about prospect of resigning- Some reports have said Johnson could refuse to resign even if he lost a no-confidence vote, in order to delay an election beyond Brexit day and ensure the country leaves the EU. Asked if he would accept he had to resign if he lost a confidence vote, Johnson told reporters: “I think that what Members of Parliament should do and what I think they’ve already voted to do when triggering Article 50 ... is honor the mandate of the people and leave the EU on October 31.”
www.reuters.com/article/us-britain-eu-vote/uk-must-leave-eu-on-oct-31-pm-johnson-says-when-asked-...
It's up to EU to avoid no-deal Brexit, says UK foreign minister- “If the position from the EU is that the withdrawal agreement can’t be changed - whether it’s add-ons or subtractions - full stop, which is their position today, then let’s face it, they will be taking the decision to see the UK leave on no-deal terms, and that’s a responsibility they will have to bear,” Raab said.
www.reuters.com/article/us-britain-eu-raab/its-up-to-eu-to-avoid-no-deal-brexit-says-uk-foreign-m...
Italy's Salvini pushes for a new election over deadlocks- As tones hardened, Salvini met with Italian Premier Giuseppe Conte on Thursday. After the meeting, Salvini issued a statement saying the TAV vote clearly showed that the ruling coalition had collapsed and called for a speedy election. "Let's go immediately to the Parliament and verify that there is no longer a majority, as was evident in the vote on the TAV, and quickly return the word to voters," Salvini said.
madison.com/news/world/italy-s-league-mulls-new-elections-to-break-govt-deadlock/article_237dab29...
Italy's Di Maio says 5-Star is ready for elections- “We are ready, we don’t care in the least about occupying government posts and we never have,” Di Maio said in a statement. Di Maio accused League Leader Matteo Salvini, who is riding high in opinion polls, of “taking the country for a ride” and said sooner or later Italians would turn against him for it.
www.reuters.com/article/us-italy-politics-crisis-5star/italys-di-maio-says-5-star-is-ready-for-el...
Italy PM Conte says Salvini must explain why he is sinking government- “It is not up to the interior minister to convene parliament or fix the agenda of a political crisis,” Conte said, vowing to go before parliament to ensure “the crisis (Salvini) has unleashed is the most transparent in the history of the republic”… “He must ... justify to the voters who believed in the promise of change, the reasons that have led him to interrupt early and abruptly the work of government,” Conte said.
www.reuters.com/article/us-italy-politics-crisis-pm/italy-pm-conte-says-salvini-must-explain-why-...
Italy aide linked to Russia funding accusations frequented Moscow: BuzzFeed- Flight records show Salvini’s former spokesman Gianluca Savoini went to Moscow on three separate occasions last year in the run-up to an October meeting where the proposed covert oil deal was discussed, BuzzFeed reported. In the weeks after, he made a further three, unexplained trips to Russia, the report added, citing a joint investigation with two other websites Bellingcat and The Insider.
www.reuters.com/article/us-italy-politics-russia/italy-aide-linked-to-russia-funding-accusations-...
The euro must prepare for future shocks- Monetary policy is not enough on its own — fiscal co-ordination is essential
www.ft.com/content/2b732ad8-b93c-11e9-8a88-aa6628ac896c
Boris Johnson Says There’s ‘Bags of Time’ Left to Renegotiate Brexit With EU
bloomberg.com
U.K. Prime Minister Boris Johnson urged the European Union to show "common sense" and re-write the Brexit divorce deal he says is unacceptable, as he stepped up preparations to leave the bloc without one.