Monday, April 18, 2016

Singapore's export slump is a worrying sign for the global economy

Singapore's export slump is a worrying sign for the global economy

As a global barometer for the health of the global economy, Singapore continues to paint a bleak picture at present.
Not only did its economy fail to grow in the first three months of the year, demand for the nation’s exports is now also plummeting.
According to International Enterprise (IE), non-oil exports (NODX) from the country fell by 15.6% in the 12 months to March, missing already dire forecasts for a contraction of 13.2%.
The annual contraction was the steepest recorded since February 2013 and well below the 2.0% annual gain previously recorded in February.
By destination, NODX fell by 39.1% year-on-year to the European Union, outpacing drops of 14.0% and 6.2% to China and the United States.
Out of the nation’s top 10 export destinations, NODX fell in all markets apart from Japan and Hong Kong.
According to the Straits Times newspaper, electronic shipments — a key cog in nation’s export sector — slumped by 9.1% year-on-year in March, a sharp turnaround on the 0.7% gain reported in the year to February.
Non-electronic NODX fell 18%, again well below the 2.6% rise seen in the 12 months to February. The fall was led by structures of ships & boats (-99.6%), pharmaceuticals (-30.9%) and petrochemicals (-16.4%), according to the newspaper.
On a month-on-month, seasonally-adjusted basis, NODX rose by 0.2%, an improvement on the 4.2% contraction seen in February but below expectations for an increase of 2.3%.
Although the data is volatile, exports have now contracted on an annualised basis in three of the past four months. As a major global trade hub, the continued weakness in exports suggests global demand remains weak, underscoring concerns from the IMF and others that global economic growth may once again undershoot expectations in 2016.
You can read more here.
Read the original article on Business Insider Australia. Copyright 2016. Follow Business Insider Australia on Twitter.

Rousseff loses impeachment vote in Congress

Rousseff loses impeachment vote in Congress

Brazil's President Dilma Rousseff looks on during signing of federal land transfer agreement for the government of the state of Amapa at Planalto Palace in Brasilia, Brazil, April 15, 2016. REUTERS/Ueslei MarcelinoThomson ReutersBrazil's President Rousseff looks on during signing of federal land transfer agreement for the government of the state of Amapa at Planalto Palace in Brasilia
BRASILIA (Reuters) - Brazilian President Dilma Rousseff lost a decisive impeachment vote in the lower house of Congress on Sunday and appeared almost certain to be forced from office in a move that would end 13 years of leftist Workers' Party rule.
As thousands of pro- and anti-impeachment protesters demonstrated outside Congress, the leader of the Workers Party in the lower house conceded defeat with the vote standing at 314 votes in favor to just 110 votes against sending Rousseff for trial in the Senate on charges of manipulating budget accounts.
The surprisingly one-sided vote had a raucous atmosphere with opposition legislators crowding around the microphone and cheering every vote against the unpopular president. At least two deputies let off poppers full of confetti as they voted to impeach Rousseff.
If the Senate agrees to go ahead with the impeachment, as seems likely, Rousseff would be suspended from her post and be replaced by Vice President Michel Temer as acting president pending her trial. Temer would serve out Rousseff's term until 2018 if she is found guilty.
The impeachment battle, which comes during Brazil's worst recession since the 1930s, has divided the country of 200 million people more deeply than at any time since the end of its military dictatorship in 1985.
It has also sparked a bitter battle between the 68-year-old Rousseff and Temer, 75, that appears likely to destabilize any future government and plunge Brazil into months of uncertainty.
Despite anger at rising unemployment, Rousseff's Workers Party can rely on strong support among millions of working-class Brazilians, who credit its welfare programs with pulling their families out of poverty during the past decade.
"The fight is going to continue now in the streets and in the federal Senate," said Jose Guimaraes, the leader of the Workers' Party in the lower house, conceding that the government had lost the vote. "We lost because the coup-mongers were stronger."
Opinion polls suggest more than 60 percent of Brazilians support impeaching Rousseff, Brazil's first female president.
While she has not been accused of corruption, Rousseff's government has been tainted by a vast graft scandal at state oil company Petrobras <PETR4.SA> and by the economic recession.
Hundreds of thousands of demonstrators from both sides took to the streets of towns and cities across the vast nation. Millions watched the Congressional vote live on television in bars and restaurants, in their homes or on giant screens in the street.
On the grassy esplanade outside Congress, a 6.5-foot-high (2-metre) security barrier ran for more than 1 km separating rival demonstrations, a symbol of the political rift that has emerged in one of the world's most unequal societies.
In Brazil's southern economic powerhouse of Sao Paulo, thousands of pro-impeachment demonstrators packed the central Avenida Paulista, draped in Brazilian flags and waving banners reading: "Dilma out".
"We need to make this country viable again," said Paulo Tosi Marques, 66, a retired business administrator at the pro-impeachment demonstration in Sao Paulo. "Look at what we have - corruption, inflation and an unprecedented crisis."

PARALYZED GOVERNMENT

brazil impeachmentReuters/Ueslei Marcelino

The impeachment battle has paralyzed the activity of government in Brasilia, just four months before the country is due to host the Olympics in Rio de Janeiro, and as it seeks to battle an epidemic of the Zika virus, which has been linked to birth defects in newborns.
Critics of the impeachment process say it has become a referendum on Rousseff's popularity - currently languishing in single digits - which sets a worrying precedent for ousting unpopular leaders in the future.
They note that Rousseff is accused of a budgetary slight of hand commonly employed by many elected officials in Brazil.
With Brazilians transfixed by the Congressional vote, broadcast live on television, legislators denounced corruption and the economic downturn as they voted against Rousseff - but few of them mentioned the budgetary allegations.
However, business lobbies have thrown their weight behind the ouster of Rousseff, as they look to Temer to restore business confidence and growth to the world's ninth largest economy.
Once regarded as an emerging markets powerhouse, Brazil has been hit by the end of a long commodities boom and lost its coveted investment grade credit rating in December.
Brazil's stocks and currency have been among the world's best-performing assets in recent weeks on growing bets that Rousseff would be removed from office, allowing Temer to adopt more market-friendly policies.
While Rousseff herself has not been personally charged with corruption, many of the lawmakers who decided her fate on Sunday have been.
Congresso em Foco, a prominent watchdog group in Brasilia, said more than 300 of the legislators who voted - well over half the chamber - are under investigation for corruption, fraud or electoral crimes.
As they cast their vote, some lawmakers said the next politician to be impeached should be the man leading the proceedings, Speaker Eduardo Cunha. He is charged with corruption and money laundering in the kickback scandal involving Petrobras, and he also faces an ethics inquiry over undeclared Swiss bank accounts.
"God have pity on this nation," Cunha said as he cast his vote in favor of impeaching Rousseff. 
(Additional reporting by Anthony Boadle, Lisandra ParaguassĂș in Brasilia and Guillermo Parra-Bernal in Sao Paulo; Writing by Daniel Flynn, Stephen Eisenhammer and Anthony Boadle; Editing by Peter Cooney and Kieran Murray)
Read the original article on Reuters. Copyright 2016. Follow Reuters on Twitter.

NO DEAL: Saudi Arabia demands Iran join the oil production freeze

NO DEAL: Saudi Arabia demands Iran join the oil production freeze

Saudi Arabia King SalmanAP/ Saudi Press AgencySaudi King Salman, middle, watches military exercises code named North Thunder with Egyptian President Abdel Fattah el-Sisi, right, and the Emir of Kuwait Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah, left, in Hafr Al-Baten, Saudi Arabia.
The much-anticipated meeting to freeze global oil production in Doha over the weekend has ended without a deal after Saudi Arabia demanded that Iran join the freeze.
Signs emerged late last week that the Saudis were hardening their position. That was a position that firmed on Friday with deputy Crown Prince Mohammed bin Salman telling Bloomberg that his country could flood the world with oil if they choose to.
He said the kingdom could increase output to 11.5 million barrels a day right away, and up to 12.5 million within six to nine months “if we wanted to”. He added that with investment, Saudi Arabia could produce up to 20 million barrels of oil per day.
Reuters reports this morning that there was “fierce debate about the wording of a communique – including between Saudi Arabia and Russia”.
When a deal might be done, if a deal might be done, is now unclear. But a source told Reuters that “we need more time to reach an agreement among all OPEC members and main producers to freeze production, which can be by June”.
Whether June is too soon is also an open question after Iran’s oil minister Bijan Zanganeh said over the weekend that other producers had to deal with the reality that Iran has returned to the oil market.
“If Iran freezes its oil production … it cannot benefit from the lifting of sanctions,” he said
Last week, comments from Russian officials and the head of the country’s oil state oil company Rosneft fed anticipation that the meeting would conclude with a more positive outcome. That drove crude oil prices, in West Texas Intermediate and Brent Crude terms, to their highest level since late November 2015.
The lack of a deal puts that rally under pressure and leaves traders with no clear guide to when the widening gap between oil supply and demand will be closed.
Read the original article on Business Insider Australia. Copyright 2016. Follow Business Insider Australia on Twitter.

Friday, April 15, 2016

Brazil's embattled president tried — and failed — to block an impeachment vote

Brazil's embattled president tried — and failed — to block an impeachment vote

dilma rousseffREUTERS/Ueslei MarcelinoBrazil's President Dilma Rousseff speaks during a news conference on the death of Brazilian presidential candidate Eduardo Campos, at the Planalto Palace in Brasilia August 13, 2014.
RIO DE JANEIRO (AP) — Brazil's Supreme Court voted early Friday to reject a motion seeking to block an impeachment vote in the lower house of Congress against President Dilma Rousseff, sharply limiting the embattled leader's options to avoid a showdown with legislators who want to oust her.
Rousseff has lost support of key allies this week and is now even closer to a major defeat that would weaken an already struggling administration dealing with problems on many fronts: the worst recession in decades, a sprawling scandal at state oil company Petrobras and an outbreak of the Zika virus, which can cause devastating birth defects.
Justices voted 8-2 to deny Rousseff's appeal, saying it wasn't their role to get involved at this stage of the process, which the top legal official in Rousseff's government called "contaminated." The majority of judges argued the lower house's role in impeachment proceedings is to consider whether to accept accusations against Rousseff and if it does so, the Senate will have a trial to fully examine them.
The only good news for the Rousseff in the special session that ran past seven hours was a statement by Chief Justice Ricardo Lewandowski suggesting that in the future the court could again look at the impeachment proceedings.
"Impeachment is a political action, yes. But who said that political actions can't be debated by the Judiciary?" said Lewandowski, one of the two justices who voted to back the president's motion.
Justices began their session discussing whether the procedures set for Sunday's impeachment vote by the Chamber of Deputies were valid.
Initially, lower house Speaker Eduardo Cunha, a strident foe of the president, organized the vote to begin with legislators from the industrial and rich south, where the opposition to Rousseff is strongest.
Brazil Political Cris_MillAP Photo/Eraldo PeresA demonstrator shouts slogans in support of the impeachment of Brazil's President Dilma Rousseff, in front of the Supreme Court, in Brasilia, Brazil, Thursday, April 14, 2016.
But while the justices were meeting, Cunha's lawyer presented a different plan that would alternate between the south and the north, where Rousseff has more support. The court decided to keep Cunha's revised plan.
The top court had not been expected to rule on Thursday, but then Lewandowski said that "exceptional situations require exceptional measures."
The late meeting of 10 justices was the latest development amid weeks of legal wrangling over a process in Congress that has exposed deep divisions in Latin America's largest country.
The lower house's vote on whether to impeach Rousseff is based on allegations that she broke fiscal rules to mask budget problems by shifting around government accounts.
In filing Rousseff's motion Thursday, Solicitor General Jose Eduardo Cardozo argued Cunha had presented the impeachment push in such a way that went beyond the actual accusations against Rousseff.
Brazil Political Cris_Mill 2AP Photo/Eraldo PeresA sign says in Portuguese "I trust Lula, Mato Grosso do Sul in the Fight" by a tent of government supporters in Brasilia, Brazil, Thursday, April 14, 2016.
Cardozo made the same claim about the report submitted to the special congressional committee that voted Monday to send the impeachment measure to the full Chamber of Deputies. He said the discussion was "contaminated" because it included the overall political crisis, the recession and unrelated corruption probes.
"We are not talking about the merits of impeachment" but rather the process, Cardozo told reporters Thursday afternoon in Brasilia.
After the court's decision, when journalists asked Cardozo whether Rousseff would still try to block the vote Sunday, Cardozo said: "We are going to analyze this process step by step."
Cardozo added that the government can go to the Supreme Court to discuss the merit and that it will be done "at the appropriate time." He did not elaborate.
The pro-impeachment camp needs two-thirds of the 513 votes in the lower house, or 342 votes, to send the proceedings to the Senate for a possible trial. If the Senate agreed to take it up, Rousseff would be forced to step down until the measure was voted on.
Both government and opposition forces say they have enough votes to win Sunday, but daily counts by Brazilian media suggest the opposition is much closer to victory.

IT'S LOOKING GLOOMY: What you need to know on Wall Street today

IT'S LOOKING GLOOMY: What you need to know on Wall Street today

man fog bridgeGuang Niu/Getty Images
Finance Insider is Business Insider's midday summary of the top stories of the past 24 hours.
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Earnings season is underway for Wall Street firms, and it's as gloomy as expected.
Banks so far haven't missed earnings expectations, but profits and revenues are down significantly across the board.
Bank of America on Thursday reported earnings per share of $0.21 on revenue of $19.51 billion — that's down from earnings per share of $0.36 on revenue of $21.4 billion in the same quarter last year. Trading revenue was down 16% and investment banking revenue dropped 22%.
Wells Fargo reported diluted earnings per share of $0.99 on revenue of $22.2 billion, versus EPS of $1.04 on revenue of $21.3 billion a year ago.
Wells also said its oil and gas portfolio was under "significant stress" owing to the decline in oil prices and the deteriorated financial condition of its borrowers.
Banks' mediocre performance is especially notable because the first quarter is typically the strongest for Wall Street. But choppy trading conditions in early 2016, fears over China's growth, and a collapsed oil price have created a "perfect storm" for banks. More on that here.
BlackRock also reported a disappointing first quarter on Thursday. It announced earnings per share of $3.92, down from $4.84 in the year-ago quarter.
Here are the top Wall Street headlines at midday:
This deal could finally reawaken the IPO market: Here's what you need to know— Bats Global Markets, a stock-exchange operator giving the NYSE and Nasdaq a run for their money, is set to go public on Friday.
Home prices in San Francisco just fell for the first time in 4 years — According to real-estate company Redfin, house prices fell 1.8% year-on-year in March, the first such drop in four years. 
JAMIE DIMON: The US consumer is A-OK — Dimon said consumers are looking strong — and that that's a good sign for the US economy.
The oil crash is really helping Delta — Delta Air Lines reported first-quarter profits that topped estimates on Thursday.
Jamie Dimon says Americans only have 1 problem area when it comes to debt— JPMorgan's CEO says the American consumer is looking great these days, except for in one key area: student debt.
Morgan Stanley's feeling really good about these 10 stocks — A team of Morgan Stanley analysts singled out ten bright spots that they think are about to see some good news.

Europe is buying more cars but abandoning Volkswagen branded vehicles

Europe is buying more cars but abandoning Volkswagen branded vehicles

An upside-down Volkswagen beetle car, part of a fountain sculpture in front of a branch of a Swiss Volkswagen importer, is pictured in the town of Buchs near Zurich, Switzerland September 26, 2015. Swiss authorities say they are suspending sales of Volkswagen diesel vehicles that could contain devices capable of cheating emissions tests, including Audi, Seat, Skoda and Volkswagen vehicles built between 2009 and 2014.REUTERS/Arnd WiegmannAn upside-down Volkswagen beetle car, part of a fountain sculpture in front of a branch of a Swiss Volkswagen importer.
Europeans are back in a buying frenzy and are snapping up more cars across the region — but they are abandoning Volkswagen.
Data from the European Automobile Manufacturers’ Association (ACEA) revealed that registrations of new passenger cars rose by 8.2% between January and March to reach 3.8 million.
Sales rose across every major market in Europe. Britain clocked a 5.1% rise, Italy a 20.8% jump, and Germany a 4.5% increase.
However, when looking at what types of cars are being bought — VW was the only brand in the top ten to experience a fall in sales.
It is perhaps unsurprising considering it is still tackling the fallout from the emissions scandal.Volkswagen's reputation is in tatters after it was revealed the company cheated on diesel emissions tests in the US for seven years.
It did so through a clever piece of software that could identify when it was being tested and reduced harmful exhaust so it looked as if the cars met requirements, when in fact they didn't.
Cars with the VW brand saw sales slip by 0.5%  to 420,000. However, the VW group was saved overall in sales by its range of other brands without an explicit VW logo on the vehicles.
Overall sales rose 3.7% in the quarter, boosted by Audi and Skoda.
Now, the decline in Volkswagen branded vehicles may not seem like a big deal but when you look at this table and how it is failing to cash in on the improvement in Europe's consumer sentiment — you'll see why it is.
vwcarsales1

The biggest oil meeting in decades will take place on Sunday — here's what you need to know

The biggest oil meeting in decades will take place on Sunday — here's what you need to know

saudi oil minister naimiREUTERS/Fahad ShadeedSaudi oil minister Ali al-Naimi speaks to media on his arrives for the Gulf Cooperation Council Oil Ministers' meeting in Riyadh on October 9, 2012.
Major oil players will begathering to discuss a potential production freeze on Sunday, April 17, in Doha, Qatar, in what some analysts have called "the most important meeting of the last three decades."
Analysts have been hoping for a coordinated move ever since mid-February, when Saudi Arabia, Russia, Venezuela, and Qataragreed to freeze production at January levels if other producers joined in.
Since then, several states, including the relatively better-off Gulf Cooperation Council members Kuwait and the United Arab Emirates, expressed willingness to support the deal.
But others weren't as supportive. Most notably, Iran's oil minister, Bijan Zangeneh, previously called the idea to freeze production "a joke."
Plus, not everyone is planning to attend the Doha meeting. Libya said that it's not going. Whether or not Iran actually shows up is a bit fuzzy after reports on Wednesday suggested that Zangeneh doesn't plan on attending the upcoming Doha meeting, but will instead send a representative.
In light of all this, analysts aren't exactly feeling optimistic about the meeting's outcome.
A Macquarie Research team, led by Vikas Dwivedi, argued in a note to clients (emphasis added):
We have muted expectations for any meaningful impact on crude fundamentals from the April 17th Doha meeting. Practically, implementation of any accord that is reached would be so difficult that we view anything beyond foregoing splashy growth in 2016 as too optimistic.
The commodities-research team at RBC Capital Markets, headed by Helima Croft, also voiced doubts about the meeting's outcome.
"As it stands now, we believe that the most likely outcome is that producers fail to close the deal and announce a freeze on Sunday, but that they instead pledge to continue to conversation and even possibly put an additional OPEC/non-OPEC meeting on the calendar for later in the year," Croft wrote.
"Saudi Arabia and Iran do not appear ready to give sufficient ground to get a comprehensive freeze agreement done by Sunday, given current information," she wrote.
Screen Shot 2016 04 14 at 11.18.19 AMRBC Capital Markets
"In order to get a breakthrough, we would likely need to see Saudi Arabia move beyond an outright insistence that Iran freeze production at current levels and/or for Iran to agree to a production ceiling that falls well short of their current 4 mb/d negotiating stance," she continued.
But Croft also added that, given that the majority of oil producers — including Russia and the aforementioned GCC states — want a deal, their team can't entirely rule out anything.
Even if some sort of deal is reached, however, it may not even have a huge impact.
"In the event an accord is reached, there will be very little impact on global crude supply/demand balances," Dwivedi's team wrote.
"The return of OPEC to country-level quotas replacing the current 'free-for-all' strategy is viewed as broadly positive, as is the elimination of the KSA/Iraqi production growth tail risk. However in light of the production growth already achieved in January by OPEC members and Russia, an accord will not significantly impact crude S/D balances," they continued.
Screen Shot 2016 04 13 at 1.08.05 PMCredit Suisse Research
Notably, in the background of all this, it seems like global production is finally starting to cool down.
Credit Suisse's Ed Westlake and Jan Stuart shared a chart on Wednesday showing that global oil production excluding Saudi Arabia slowed to approximately 83 million barrels per day in 2016, from about 84 million in mid-2015.
But the US Energy Information Administration's latest data showed that total world production is up to 96.27 million barrels per day in 2016, up from 95.76 million bpd in 2015.
In any case, analysts will be keeping their eyes and ears open for any news of possible coordination at Sunday's meeting.
WTI crude is trading higher by 0.4% at $41.93 per barrel, and Brent crude is up 0.5% at $44.39 per barrel as of 11:52 a.m. EST.

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