US president Donald Trump and North Korean leader Kim Jong Un wrapped up their two-day summit in Hanoi without an agreement on denuclearisation, abruptly cutting short their meeting and cancelling a signing ceremony. At a press conference following his talks with the North Korean dictator on Thursday, Mr Trump said the two leaders had made progress since their agreement in Singapore in June last year. But, with US secretary of state Mike Pompeo looking on, the president said the US could not accept a North Korean demand that Washington lift all sanctions at that point in the process. The Federal Reserve is close to a timetable on when it will stop reducing the amount of bonds it is holding on its balance sheet, Chairman Jerome Powell said Wednesday. Determining the ultimate size and composition of the fixed income portfolio has been a key concern for investors nervous about how much further the Fed will tighten monetary policy. The central bank bought the bonds during and after the financial crisis in an effort to lower long-term interest rates and stimulate the economy, so reducing the size of the balance sheet has raised fears about whether it will have the opposite effect. "We're close to agreeing on a plan which would light then way to the end of the process," Powell said during testimony before the House Financial Services Committee. U.S. President Donald Trump and China's state-run news agency Xinhua both announced "significant progress" from the last week of trade negotiations. Encouragingly, both sides specifically mentioned the issues of technology transfer, intellectual property protection, currency, services and agriculture. Still, the U.S. and China will need to overcome significant hurdles if they're to ink a deal resolving their long-term disagreements. Trump said in a Sunday evening Twitter post he would delay an increase in tariffs on Chinese exports to the U.S. that was originally scheduled for March 1. "Assuming both sides make additional progress, we will be planning a Summit for President Xi and myself, at Mar-a-Lago, to conclude an agreement," Trump tweeted. "A very good weekend for U.S. & China!" Chinese stocks rallied following the news. The Shanghai composite soared 5.6 percent, sending the index back into bull market territory, or up more than 20 percent from a low touched in early January. Climate-related disasters have cost the world $650 billion over the last three years, and North America is shouldering most of the burden, according to a new report from Morgan Stanley. While governments and corporations are taking steps to mitigate the impacts of climate change, Morgan Stanley says private enterprises need to strongly consider preparing for a world gripped by more frequent and intense weather events, rising sea levels, changes to agriculture and the spread of infectious disease. Those outcomes will have a lopsided effect across industries, raising risks for some and creating opportunities for others. "We expect the physical risks of climate change to become an increasingly important part of the investment debate for 2019," Morgan Stanley equity strategists Mark Savino, Jessica Alsford and Victoria Irving said in a research note Wednesday. U.K. Prime Minister Theresa May has insisted to the British Parliament that her government still plans to exit the European Union on March 29 this year. Her statement followed the publication of an eyewitness report that her top Brexit negotiator had said earlier this week that the EU would "in the end ... probably just give" Britain an extension to the two-year withdrawal deadline if requested. Olly Robbins is a senior U.K. civil servant who has helped oversee Britain's negotiations with the European Commission for much of that period. After a dinner meeting on Monday between his ministerial counterpart, the U.K. Brexit Secretary Stephen Barclay, and the EU's own chief negotiator, Michel Barnier, an ITV News correspondent overheard Robbins tell two colleagues in a hotel bar that British lawmakers should be made to believe that, "if they don't vote for the deal then the extension is a long one." Italian banking shares moved higher on Monday following reports that their capital positions are above the levels required by the European Central Bank – in what analysts have described as "not so bad news." Italian banks have been at the forefront of many investors' concerns. Since the appointment of the current anti-establishment government and the subsequent promises to increase public spending, money managers have been worried that the country could be in trouble given its high level of public debt. These concerns have raised Italy's borrowing costs and added pressure on the profitability of Italian banks. Furthermore, recent data has also shown that the economy has entered a technical recession in the last quarter of 2018. Lower economic activity could restrict the bank's ability to make business. Credit rating agency Moody's warned last week that if the recession were to continue over the coming quarters there would be "negative consequences for banks including negative effects on performance, higher nonperforming loan (NPL) inflows, and ultimately banks' capital." The chance of recession in the next 12 months spiked to its highest level in three years as market participants ratcheted up their worries about global economic weakness, Fed rate hikes, the market sell-off, trade tensions and the government shutdown. The CNBC Fed Survey, conducted last week while the government was still shut down, saw the probability of a recession in the next 12 months rise to 26 percent, the third straight increase. The probability was last higher at nearly 29 percent in January 2016, following another market sell-off, showing how sensitive the outlook for survey respondents can be to market gyrations. |
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March 2021
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