• MTS Economic News_20180122

    22 Jan 2018 | Economic News

• The dollar held steady above a three-year low versus a basket of currencies on Friday, marking a fifth week of falls and its longest losing streak since May 2015 as worries over a possible U.S. government shutdown weighed.

At 3:26 p.m. (2026 GMT), the trade-weighted dollar index =USD was up 0.06 percent at 90.591. It touched the lowest level since December 2014 this week, with investors selling on the view that more central banks will join the Federal Reserve in raising interest rates, after years of ultra-loose policy adopted to combat the 2008 global financial crisis and subsequent recessions.

The euro EUR= was down 0.06 percent at $1.2230, below a three-year high of $1.2323 touched on Wednesday. The common currency booked a fifth straight week of gains in advance of next Thursday's European Central Bank meeting.

The dollar was down 0.41 percent at 110.64 yen JPY=, with its rebound from Wednesday's four-month low of 110.19 yen already fading even as benchmark U.S. 10-year yield US10YT=RR rose to the highest level since Sept. 2014.

• The dollar’s drop to three-year lows this week after prolonged weakness in 2017 is expected to further boost profits at big U.S. companies when investor optimism is already high over corporate tax cuts.

• Investors are keeping an eye out for signs of the dollar's impact on company earnings as fourth quarter reporting ramps up next week.

• The U.S. government shut down at midnight on Friday after Democrats and Republicans, locked in a bitter dispute over immigration and border security, failed to agree on a last-minute deal to fund its operations.

In a late-night session, senators blocked a bill to extend government funding through Feb. 16. The bill needed 60 votes in the 100-member Senate but only 50 supported it.

• Republican and Democratic leaders of the U.S. Senate held talks on Sunday seeking to break an impasse that has kept the U.S. government shut down for two days, but it was unclear if a deal could be struck to reopen federal agencies by the start of the work week.

• U.S. lawmakers struggled on Sunday to reach a breakthrough during the second day of a government shutdown.

If Republicans and Democrats are unable to resolve their differences, federal agencies could remain partially closed when the work week begins on Monday.

• During shutdowns, non-essential government employees are furloughed, or placed on temporary unpaid leave. Workers deemed essential, including those dealing with public safety and national security, keep working.

The last shutdown, in October 2013, lasted more than two weeks and more than 800,000 federal employees were furloughed. There is no official tally of how many would be off work this time.

• Senator Jeff Flake, Republican of Arizona, said on Sunday that he hoped Democratic and Republican party leaders would “agree to something soon” to end a federal government shutdown.

• Republican Senator John Cornyn predicted on Sunday that the U.S. government would remain shut on Monday, as lawmakers meet to negotiate an end to the impasse, Fox News Channel reported.

• U.S. House Speaker Paul Ryan said on Sunday that the House of Representatives would accept a bill funding the government through Feb. 8 and ending the current shutdown of federal agencies if the Senate can pass the measure.

Senate Republican leaders have said the chamber will vote on the measure to fund the government through Feb. 8 at 1 a.m. EST (0600 GMT) on Monday, unless Democrats agree to hold the vote sooner.

• President Donald Trump will not open negotiations on immigration until Democrats agree to reopen the government, his spokeswoman said on Saturday in a statement

• Chancellor Angela Merkel and President Emmanuel Macron said on Sunday they wanted to deepen Franco-German cooperation and give the European Union a fresh push towards closer integration.

After meeting in Paris on Friday, Merkel and Macron talked up the prospect of agreeing reforms to the euro zone, saying they were committed to strengthening the bloc.

• German Chancellor Angela Merkel’s conservatives start preparing for formal coalition talks with the Social Democrats (SPD) on Monday, wasting no time after the center-left party narrowly voted to go ahead following months of political deadlock.

• S&P Global Ratings on Friday raised Greece’s foreign and local currency long-term sovereign credit ratings to ‘B’ from ‘B-', citing improvements in the finances and fiscal outlook for the debt-laden south-eastern European nation.

• Oil prices ended down on Friday and broke a four-week winning streak after a rally that had taken benchmarks to three-year highs, as investors sold positions on re-emerging U.S. production concerns.

Brent crude futures LCOc1 fell 70 cents, or 1 percent, to settle at $68.61 a barrel after hitting a session low of $68.28. On Monday, they hit their highest since December 2014 at $70.37.

U.S. West Texas Intermediate (WTI) crude futures CLc1 settled at $63.37 a barrel, down 58 cents, or 0.9 percent. WTI marked a December-2014 peak of $64.89 a barrel on Tuesday.

On a weekly basis, Brent settled 1.8 percent lower while WTI was down 1.5 percent.

• OPEC and non-OPEC oil producers have a consensus that they should continue cooperating on production after the end of 2018, when their current agreement on production cuts expires, Saudi Arabian energy minister Khalid al-Falih said on Sunday.

• Seoul welcomed confirmation by the International Olympic Committee (IOC) that 22 North Korean athletes would compete in next month’s Winter Olympics, saying on Sunday it would aid peace and the easing of tensions on the Korean peninsula.

Reference: Reuters

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