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ECB’s Praet Says Oil-Price Slump Positive for Europe Economy

Europeans fretting about Brexit or Italy’s budget crisis can take some comfort from the slump in energy prices, according to the European Central Bank’s chief economist. “The recent evolution in oil prices — if it’s sustained — is a positive development for Europe,” Executive Board member Peter Praet said in Brussels on Thursday. “It’s a relief” for consumers. Brent crude has lost more than 20 percent of its value since early October — most of which is due to weaker demand amid slowing global growth, according to Bloomberg Economics. Euro-area ...

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Mario Draghi: The outlook for the euro area economy

The euro area economy has now been growing for five years, and we expect the expansion to continue in the coming years. Yet we have recently seen a loss in growth momentum. In both of the last two quarterly ECB growth projections, our staff has revised down its estimates. Actual data have also been weak. The flash estimate for euro area growth in the third quarter was just 0.2%. The slowdown has raised questions about the strength of the growth outlook and, in turn, about whether the ongoing convergence of ...

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U.S. Household Debt Continues to Climb in 3rd Quarter

Household indebtedness continued to climb in the third quarter, with balances continuing to rise for almost all types of borrowing, the Federal Reserve Bank of New York reported Friday. In the third quarter of this year, total household debt increased for the 17th consecutive quarter to $13.51 trillion, more than 20% above the trough it hit in the second quarter of 2013. Total mortgage debt was $9.14 trillion in the third quarter. That represented an increase from the second quarter, but it remained below the peak of $9.29 trillion in ...

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Hong Kong’s growth cools; outlook clouded by trade war, rate hikes

Hong Kong’s economic growth slowed further in the third quarter and is expected to face additional headwinds amid trade tensions between Beijing and Washington and higher interest rates, posing broader risks to growth in the Asian financial hub next year. The city’s economy grew 2.9 percent in the third quarter from a year earlier, down from 3.5 percent growth rate in the April-June quarter. That marks the second consecutive slowdown from 4.6 percent growth in the first quarter, which was the city’s strongest performance in nearly seven years. The economy ...

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Retail Sales Show U.S. Spending Solid But No Longer Gangbusters

Americans are still shopping — just not at the gangbusters pace seen earlier in the year. October retail sales rose by the most in five months, driven by automobiles, fuel and building materials following hurricanes that restrained spending, Commerce Department data showed Thursday. A measure of underlying demand known as the control group advanced by less than forecast, and downward revisions to the prior months’ data also put a damper on the overall picture. Even so, increases across most sales categories kept economists from being too negative on the outlook, ...

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Business bosses alarmed as resignations imperil Brexit deal

Business leaders expressed growing alarm as a draft Brexit agreement seen as the only chance of preserving some stability in UK-EU trading threatened to unravel, sending stock prices and the pound plunging. Just 12 hours after British Prime Minister Theresa May announced that her cabinet had agreed to the terms of the draft agreement, Brexit minister Dominic Raab and work and pensions minister Esther McVey quit, saying they could not support it. Their departures and those of other, junior ministers, revived the spectre for business of Britain leaving the European ...

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French finance minister flags new cold war risk over trade

The world faces a new cold war over trade triggered by tensions between China and the United States, which can only be avoided by reforming the World Trade Organisation, French Finance Minister Bruno Le Maire said on Friday. “The real risk now is that we enter into a cold war between China and the United States in which all countries, including Europe, come out losing,” Le Maire said. “This open war in trade will be an economic suicide for the whole world. It (the trade war) is quite simply stupid,” ...

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Trump Tax Cut to Be Eroded Next Year by Inflation Switch

Last year’s big tax cut is about to start shrinking. The Internal Revenue Service on Thursday announced the tax code’s parameters for 2019, implementing a new method for making inflation adjustments that will result in higher tax payments — and government revenue — over time. The shift will cost Americans $133.5 billion over a decade, according to Congress’s Joint Committee on Taxation. The tax law enacted last year lowered tax rates and reduced tax burdens for most households in 2018. It also required the IRS to switch to a different, ...

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Bullmann: Now is the time to deliver on the reform of the Eurozone

Ahead of a special Eurogroup meeting next Monday, S&D Group leader Udo Bullmann urged EU finance ministers to act and deliver on the much needed economic and monetary (EMU) reform. Udo Bullmann stated: ‘For years, we have been discussing the need to strengthen the Eurozone. There is broad agreement across the political spectrum that the Economic and Monetary Union (EMU) needs to be equipped with tools to prevent and resolve future crises. Now it is time for the Council to act. ‘The socialists and democrats have set out clear priorities. ...

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Presidency of People Republic of China: Actions needed to fight protectionism

Facing a complicated international situation, Premier Li Keqiang called on all sides to take practical measures to maintain rule-based multilateralism and free trade, and offer stable expectations and a free and law-based environment to the market. This will be conducive to regional development, peace and stability, he said. He was speaking at the 21st ASEAN-China, Japan and Republic of Korea (10+3) leaders’ meeting, which was held on Nov 15 in Singapore. Premier Li proposed speeding up talks on the Regional Comprehensive Economic Partnership (RCEP) and the trilateral free trade agreement ...

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EU executive to launch action over Italy budget on Wednesday – sources

The European Commission will take the first step next week to discipline Italy over its 2019 budget, three officials close to the process said, after Rome defied EU objections to its plans to borrow and spend more next year. Italy re-submitted its draft budget to the Commission on Tuesday, with the same main assumptions that Brussels rejected in October as contravening EU rules. Faced with that escalation of the fiscal showdown from the eurosceptic government in Rome, the EU is to take the first step in what is called an ...

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Trump and Xi Likely to Get Only Framework Trade Deal, Ross Says

The U.S. still plans to raise tariffs on Chinese imports in January with President Donald Trump and China’s Xi Jinping likely at best to agree to a “framework” for further talks to resolve trade tensions at an upcoming meeting, Commerce Secretary Wilbur Ross said. The U.S. and China are now discussing the agenda for the two leaders’ meeting on the sidelines of the Nov. 30-Dec. 1 Group of 20 summit in Buenos Aires and what a realistic outcome could be. When asked about a report that China this week had ...

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U.S. Industrial Production Edged Up in October

U.S. industrial output ticked up in October, as ramped up factory production offset declines in mining and utilities output. Industrial production, a measure of manufacturing, mining and utility output, rose a seasonally adjusted 0.1% in October from the prior month, the Federal Reserve said Friday. Economists surveyed by The Wall Street Journal had expected a 0.2% gain for October. From a year earlier, industrial production rose 4.1% in October. Manufacturing production, which accounts for three-quarters of the overall index, continued to grow at a solid pace for the fifth straight ...

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Italy’s budget openly challenging EU budget rules – Dombrovskis

Italy’s draft budget for 2019 “significantly” deviates from commitments, the vice president of the EU Commission Valdis Dombrovskis said in an interview with daily Il Sole 24 Ore on Friday, threatening a procedure for excessive debt against Rome. Earlier this week Italy re-submitted its draft 2019 budget to the EU Commission with the same growth and deficit assumptions as a draft previously rejected for breaching EU rules, stepping up its showdown with Brussels. Italian government is “openly” challenging budget rules agreed by all euro zone countries, but its policy is ...

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U.S. envoy to Japan defends trade policies, say not protectionist

The United States ambassador to Japan defended his country’s trade policies on Friday, saying they were not protectionist and were aimed at creating a more level playing field for American companies. “The United States is the most open major economy in the world,” Ambassador William Hagerty told reporters at the Japan National Press Club. “Japan and other countries have benefited greatly from that openness. So I want to make sure that we don’t mistake our efforts to achieve reciprocity for protectionism.” U.S. President Donald Trump has roiled Washington’s trade relations ...

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