Dollar eases after weak US economic data

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• Make tactical gains from eurozone assets but don't over-rely on cheap money: UBS
• Dollar firms as US consumers grow more confident
• US may tide through oil storage crisis
• Oil prices drop on possible Iran nuclear deal, strong US dollar
• Economy expands at 2.2% pace in 4th quarter
• Prototype US penny sold for 117.5 million pennies

      

2 Apr6:47 AM

[NEW YORK] The dollar weakened slightly on Wednesday after a batch of disappointing US economic data raised concerns about the strength of the recovery, suggesting a delay in higher interest rates.

The greenback, which has been on a lengthy tear, took a hit along with US equities following the downbeat data on manufacturing, construction spending, and private-sector job growth.

The latter, a report from payrolls firm ADP showing a slump in business hiring in March, the first drop below 200,000 jobs since January 2014, cast a shadow over markets ahead of Friday's highly anticipated government labour report for March.

Although the monthly ADP report is not considered a reliable indicator of the Labour Department's report on nonfarm payrolls, it was enough to suggest "a slight higher risk of disappointment" in the March jobs data, said Joe Manimbo at Western Union Business Solutions.

Analysts expect the official report to show a slowdown in jobs growth, with the economy adding 250,000 nonfarm payrolls after 288,000 in February, and the jobless rate remaining unchanged at 5.5 per cent.

Moody's Analytics said the ADP report and employment details in the ISM manufacturing survey led it to cut its forecast for March nonfarm payrolls by 40,000 to 220,000.

"Underwhelming job growth Friday would dampen US rate hike expectations and weigh on the dollar," Mr Manimbo said.

The Federal Reserve is closely monitoring the jobs market as it gauges when to raise ultra-low interest rates this year.

AFP

      

Four Horsemen ( Video)

Four Horsemen

2012

Over the centuries systems have been subtly modified, manipulated and even corrupted often to serve the interests of the few. We've continually accepted these changes and because man can adjust to living under virtually any conditions, the trait that's enabled us to survive is the very trait that's suppressed us. For centuries gatekeepers have manipulated our cognitive map. But in 1989 a computer scientist by the name of Tim Berners-Lee implemented the first successful communication between an HTTP client and server.

The World Wide Web was born. It is since unleashed a tsunami of instantly accessible, freely available information. Just as Gutenberg's printing press wrestled control of the cognitive map away from ecclesiastical and royal elite, today the Internet is beginning to change Governments, finance and the media. We are on the brink of change, but to enact it we must first understand the things that have been left unsaid for so long. To do that we need context from people who speak the truth in the face of collective delusion, because to understand something is to be liberated from it.

Empires do not begin or end on a certain date, but they do end and the West has not yet come to terms with its fading supremacy. At the end of every empire under the guise of renewal, tribes, armies and organizations appear and devour the heritage of the former superpower often from within. In his essay, The Fate of Empires, the soldier, diplomat and traveler, Lieutenant-General Sir John John Glubb analyzed the lifecycle of empires. He found remarkable similarities between them all. An empire lasts about 250 years, or 10 generations, from the early pioneers to the final conspicuous consumers who become a burden on the state.

Six ages define the lifespan of an empire: the age of pioneers, the age of conquests, the age of commerce, the age of affluence, the age of intellect, ending with bread and circuses in the age of decadence. There are common features to every age of decadence: an undisciplined and over extended military, the conspicuous display of wealth, a massive disparity between rich and poor, a desire to live off a bloated state, and an obsession with sex. But perhaps the most notorious trait of all is the debasement of the currency. The United States and Great Britain both begun on a gold or silver standard, long since abandoned. Rome was no different.

Great empire wealth always dazzles, but beneath the surface the unbridle desire for money, power and material possessions means that duty and public service are replaced by leaders and citizens who scramble for the spoils.

Watch the full documentary now

Iran nuclear talks: The key stumbling blocks PUBLISHED ON MAR 30, 2015 11:20 AM

Iran nuclear talks: The key stumbling blocks

PUBLISHED ON MAR 30, 2015 11:20 AM

U.S. Secretary of State John Kerry (left) and Russia's Foreign Minister Sergei Lavrov (right) share a light moment before a meeting at the Beau Rivage Palace Hotel in Lausanne, Switzerland on March 29, 2015. Officials are meeting while in Switzerland for negotiations on Iran's nuclear program. -- PHOTO: REUTERS 

Six world powers are racing against time to reach a deal with Iran to curb its nuclear programme.

Several issues remain unresolved after 18 months of negotiations between Iran and the United States, Britain, France, Germany, Russia and China. Here's a look at the key issues:

1. Uranium Enrichment

Iran has 19,500 centrifuges which could be used to enrich uranium to the 5 per cent purity needed for nuclear power stations or to the 90 per cent level required to make nuclear weapons. Tehran insists that nuclear power is its only goal.

The US, which had previously demanded that Iran give up every centrifuge, is now willing to let it keep an enrichment capacity, provided it remains at least one year away from being able to make enough weapons-grade uranium for one nuclear bomb.

Securing this 12-month "breakout" time is Washington's bottom line for a deal. The assumption is that it will give the international community enough time to react and stop Iran before it could produce a nuclear bomb.

This is dependent on two variables - the number of centrifuges at Iran's disposal and the amount of low-enriched uranium in its stockpile. The fewer centrifuges and the less uranium, the longer the "breakout" time.

Under a possible compromise, Iran would cut its holding of centrifuges to about 6,000 machines and export its entire stockpile of 7.9 tons of low-enriched uranium, except for a residual amount. This would translate into the 12-month "breakout" time demanded by the US.

The restrictions on centrifuges and uranium would apply for at least 10 years, after which they would expire and Iran would be treated like any other signatory to the Nuclear Non-Proliferation Treaty.

2. Lifting of sanctions

Iran wants all sanctions to be lifted as soon as a final deal is signed. Foreign Minister Mohammad Zarif has said "sanctions, pressure and an agreement will not go together."

But US officials are worried that lifting the sanctions at once could result in Tehran breaking the deal later. Washington wants a step-by-step lifting of sanctions, linked to the steps that Iran would take. It also wants the option of re-imposing sanctions if Iran were to renege on the agreement.

An added complication is there are three layers of sanctions enforced by the US, the European Union and the United Nations.

Provided a final agreement is reached, the EU and the UN should be willing to lift sanctions. The problem lies in the US where the Republican-controlled Congress may oppose any relaxation of the pressure on Iran, particularly if President Barack Obama's critics say he has signed a bad deal.

The question is whether Mr Obama could lift sanctions unilaterally using his presidential powers, or whether this would necessarily require a vote in Congress.

3. Research and Development

Most of Iran's 19,500 centrifuges are of the obsolete "IR-1" variety but it also has three types of more advanced centrifuges which could enrich uranium many times more quickly. Iran wants to keep the option of developing them while any deal is in force. But negotiators are concerned that Tehran may develop a new generation of sophisticated centrifuges that are ready to go into operation the moment the restrictions in an agreement expire. So they want Iran to freeze the research and development of these machines.

4. Inspections

To ensure that Iran does not build a nuclear weapon using a secret network of uranium or plutonium plants, the world powers want Iran to open up its uranium mines and its centrifuge factories to inspection. Iran would also have to implement the "Additional Protocol", an agreement giving UN nuclear inspectors the power to make snap visits. In the past, Iran had signed the Additional Protocol, although its provisions were never implemented.

The International Atomic Energy Agency (IAEA) also has a list of outstanding questions for Iran on its past research into the technology required for nuclear weapons. Revealing its previous efforts to master banned technology could be very embarrassing for Iran. One key issue will be whether a final agreement compels Iran to come clean with the IAEA and address all of the inspectors' concerns.

5. Plutonium

Any deal will have to lay out what nuclear sites Iran would be allowed to maintain. The US does not want Iran to be allowed to develop weapons-grade plutonium at its unfinished Arak reactor. Plutonium can be used as an alternative fissile material to highly-enriched uranium.

Shutting down this possible avenue to a bomb would require Iran to re-engineer the Arak plant. Iran is believed to have agreed in principle to convert this facility into a civilian "Light Water Reactor" with no military use. But whether this conversion would be reversible is another matter.

SOURCE: TELEGRAPH, AFP

CNN's Fareed Zakaria pays tribute to Mr Lee Kuan Yew on his GPS cable TV show

PUBLISHED ON MAR 30, 2015 3:29 AM

Mr Lee Kuan interviewed by CNN's Fareed Zakaria during the inaugural year of his GPS show on CNN. -- PHOTO: YOUTUBE

BY PAUL ZACH, US CORRESPONDENT IN CLEVELAND

Leading CNN journalist and Washington Post columnist Fareed Zakaria yesterday called Mr Lee Kuan Yew the most interesting man he had ever interviewed on his popular hour-long GPS show which airs on the American cable news network each week.

"People often ask me who is the most interesting political figure you've ever interviewed. The answer to that question died last week and was put to rest today in a state funeral," said Zakaria, 51, a Mumbai-born American, leading in to a 5-minute tribute to Mr Lee that aired nationwide in the United States yesterday.

During his show's seven years on the air, Zakaria has interviewed more than 600 people from 60 countries, including more than 35 heads of state,

"What made Lee Kuan Yew special?" he asked. "Most political figures can either talk a good game or do stuff. Men of great ideas are rarely also men of great action. Lee was first class at both, conceptualising and strategising but then also executing. He saw the big picture but then he could fill in the details."

Zakaria's GPS, an acronym for Global Public Square which focuses on international issues and foreign affairs, made its debut in 2008, and he interviewed Mr Lee that same year. It airs twice each Sunday in the United States and four times weekly on CNN International, reaching more than 200 million homes.

In 2003, former US Secretary of State Henry Kissinger told New York Magazine that Zakaria "has a first-class mind".

Zakaria went on to say that when Singapore was expelled from Malaysia in 1965, it had " no resources to speak of, other than a plucky young leader, Lee Kuan Yew".

"He built the city-state into one of the world's great ports, entrepots, and service centres, so much so that today Singapore is one of the world's richest and most advanced economies," he added.

While Zakaria described Singapore's political system as "closed, with one party, Lee's, ruling since its independence", he added that "its courts are independent and its administration is highly effective and regarded as clean by most international observers.

"Its economics system favours free markets and free trade, but with the government playing a large role in guiding, investing and encouraging at all levels," he said.

Zakaria wound up the segment, and his show, by airing clips from his 2008 interview with Mr Lee.

In an answer to one of Zakaria's questions about his governing style and success as compared to the US system, Mr Lee said: "Do I want to be like America? Yes in its inventiveness, in its creativeness.

"But do I want to be like America with its inability to control the drug problem? No. Or the gun problem? No.

"These are my choices. I go by what is good governance, what are the things I aim to do - a healthy society that gives everybody a chance to achieve his maximum."

zach@sph.com.sg

- See more at: http://www.straitstimes.com/news/world/united-states/story/cnns-fareed-zakaria-pays-tribute-mr-lee-kuan-yew-his-gps-cable-tv-sho#sthash.mssNUXRW.dpuf

Goldman economist says Fed hike likely late 2015 or early 2016

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Goldman Sachs Economist Jan Hatzius said on Wednesday he believed the Federal Reserve will likely raise interest rates late this year or early next year, given the amount of slack still present in the labour market. 

PHOTO: REUTERS

1 Apr10:03 PM

[STONE MOUNTAIN] Goldman Sachs Economist Jan Hatzius said on Wednesday he believed the Federal Reserve will likely raise interest rates late this year or early next year, given the amount of slack still present in the labour market.

Mr Hatzius, speaking on a panel here at an Atlanta Federal Reserve Bank event, said his view on the timing reflected a significant amount of slack still in the labour market and weak wage growth.

"My own view is that it's not yet time. Certainly not high time yet," Mr Hatzius said, adding that Goldman's forecast for the first hike is for September.

"My opinion in terms of when monetary policy ought to be tightened is very late this year, or early next year."

REUTERS

    

More economists see BoE rates on hold until early 2016

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• UK productivity worsens in last three months of 2014: ONS
• UK factory PMI rises to eight-month high in March: Markit
• Banks may face new rules to cover risk as interest rates go up
• BOE outlines parameters of 2015 stress tests
• UK growth revised higher at end of 2014, boosted by exports
• Cameron announces start of UK election campaign

      

The Bank of England will sit tight on interest rates until next year as it waits for Britain's recovery to grow deeper roots and inflation to pick up, according to an increasing number of economists polled by Reuters. 

PHOTO: AFP

1 Apr8:39 PM

[LONDON] The Bank of England will sit tight on interest rates until next year as it waits for Britain's recovery to grow deeper roots and inflation to pick up, according to an increasing number of economists polled by Reuters.

None of the 75 economists surveyed by Reuters over the past week expect any move on Bank Rate from its record low of 0.5 per cent when the Monetary Policy Committee meets on April 9.

The median forecast is for the first hike to come in early 2016 - and even then of just 25 basis points. Thirty-five of 63 economists don't expect any move before January whereas in a poll taken ahead of the March meeting it was 28 of 61.

"Low near-term inflation and the strong pound have prompted increased cautiousness from the MPC. The first rate hike is likely to be postponed until the downside risks on inflation expectations wane completely," Slavena Nazarova at CA-CIB wrote in a note to investors.

"We have delayed our call for the first rate hike to Q116."

It was only in February that a majority of economists said rates would move up before the end of 2015, and last year the BoE was widely expected to be the first major central bank to tighten policy.

The United States Federal Reserve is now expected to be first out of the blocks and is seen tightening policy in September - and even that call has been pushed back from June.

The economy expanded at a faster pace than previously thought at the end of last year and growth is expected to remain strong through 2016.

However, a spectacular fall in oil prices has sent inflation across the globe tumbling, pushing over two dozen central banks to loosen policy this year.

Britain saw no inflation in February for the first time on record but prices are expected to increase in the coming quarters.

"CPI inflation should be back above target by February 2016 as lower energy prices fall out of the base," said Stephen Lewis at ADM Investor Services. The BoE targets inflation at 2 per cent.

Still, as repeatedly stressed by policymakers, any move in Bank Rate will likely be gradual. The poll said it would still only be 1.25 per cent at the end of next year and 2.0 per cent at the end of 2017.

Before the financial crisis began it was as high as 5.75 per cent.

BoE Governor Mark Carney said last week the Bank's next move would be up, underscoring a difference of view with his Chief Economist, Andy Haldane, who surprised investors last month when he said the recent sharp slowdown in inflation meant the Bank was as likely as not to cut rates.

All of the economists in the poll sided with Carney in saying the next move would be a hike.

"No signs yet that deflationary mindset is a threat, so no real risk yet of a rate cut," said Jane Foley at Rabobank.

REUTERS

     

Canada facing grim outlook for auto trade

Greg Keenan, The Globe and Mail
9:09 AM, E.T. | March 25, 2015
Industrials

Follow this

Canada’s automotive trade deficit topped $10-billion last year and threatens to deepen as more assembly plant closings loom and free-trade agreements with the European Union and South Korea take effect.
A surplus of $15-billion with the United States was wiped out by a deficit of more than $25-billion with the rest of the world, which led to the eighth successive overall auto trade deficit that contrasts sharply with trade surpluses in the automotive sector every year between 1982 and 2006, says a new report from the Automotive Policy Research Centre.
The worsening trade numbers are another sign that Canada’s position among the world’s auto-making countries is deteriorating.
“Canada’s automotive trade deficit is only likely to deepen unless Canada is able to recapture a larger proportion of North American vehicle production by attracting investment into new assembly capacity,” the report said. “Recent developments do not augur well.”
Those developments include billions of dollars of new investment flooding into Mexico in recent years as auto makers take advantage of that country’s low wages, free-trade agreements with 45 countries and location in the middle of the Western Hemisphere with easy access to the United States and countries in South America where growth is expected to resume.
One key threat, the report noted, is the doubt about the future of two General Motors Co. assembly plants in Oshawa, Ont. One plant is scheduled to close next year, while production of Chevrolet Camaro vehicles made at the other Oshawa plant will be shifted to Lansing, Mich., later this year and no new vehicles have been allocated to replace the Camaro or other vehicles made at what is called the flex plant.
General Motors of Canada Ltd. president Stephen Carlisle acknowledged in January that there are no products currently in the pipeline for Oshawa, but there is a two-year window to reach agreements with governments and the company’s union, Unifor, to make Oshawa more competitive so it can attract new business.
Those discussions are ongoing, Mr. Carlisle said earlier this month in an update of his January statement.
About 80 per cent of the vehicles assembled in Oshawa are sold in the United States.
“The threat of a further reduction in Canadian assembly capacity is very real given the continuing uncertainty regarding GM’s footprint in Oshawa after 2016,” said the report, which was prepared by Queen’s University geography professor John Holmes.
“The closing of one or both of the GM Oshawa plants would significantly erode Canada’s remaining vehicle trade balance with the U.S.,” Prof. Holmes said.
Attracting more assembly capacity and retaining existing assembly plants are crucial on the vehicle side of the trade numbers, he said in an interview.
Parts makers need to try to export parts to areas other than the Great Lakes states, he added.
The report also noted that trade deals with South Korea and the European Union could deepen the deficit in vehicles and auto parts that Canada has with those two areas.
The 6.1-per-cent tariff on vehicles imported from South Korea is being eliminated over a three-year period. The first cut came on Jan. 1. So far, the evidence is mixed on whether the reduction is leading to higher imports of South Korean-made vehicles.
Sales of South Korean-made sport utilities and crossovers for Hyundai Auto Canada Corp. surged 50 per cent in February, but Kia Canada Inc. has posted a 16-per-cent decline since Jan. 1 in sales of cars imported from South Korea.

US private sector adds 189,000 jobs in March: ADP

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• US small-business borrowing slips in February, up on year: PayNet

      

PHOTO: REUTERS

1 Apr8:32 PM

[NEW YORK] US private employers added 189,000 jobs last month, below economists' expectations and the lowest since January 2014, a report by a payrolls processor showed on Wednesday.

Economists surveyed by Reuters had forecast the ADP National Employment Report would show a gain of 225,000 jobs.

February's private payrolls were revised up to an increase of 214,000 from the previously reported 212,000.

The report is jointly developed with Moody's Analytics.

The ADP figures come ahead of the US Labour Department's more comprehensive non-farm payrolls report on Friday, which includes both public and private-sector employment.

Economists polled by Reuters are looking for total US employment to have grown by 245,000 jobs in March, down from 295,000 in February. The unemployment rate is expected to have remained at 5.5 per cent.

REUTERS