News 

US and China to resume trade talks next week in Beijing

“President Donald Trump said in his State of the Union address on Tuesday that any new trade deal with China “must include real, structural change to end unfair trade practices, reduce our chronic trade deficit and protect American jobs.”” writes unknown author for cnbc.com. The two sides remain far apart on addressing U.S. demands that China make deep structural changes to its trade and economic policies and shrink the U.S. goods trade deficit.Lighthizer held a closed-door briefing with U.S. senators on Wednesday on the upcoming China talks and the proposed…

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The US trade deficit tumbled to a 5-month low in November

“The monthly US trade deficit narrowed in November after increasing for five straight months, including with China” writes Finanzen Net Gmbh for businessinsider.com. That was its lowest level since June and well below expectations for a $54 billion deficit.The goods trade deficit with Beijing had hit an all-time high of $43.1 billion in October, with Chinese shipments to the US up by nearly a tenth from a year earlier.The US-China trade deficit also shrank $2.8 billion to $35.4 billion in November, likely affected by the tariffs on hundreds of billions…

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U.S. trade deficit falls 11.5% in November to 5-month low, delayed report shows

“The numbers: The U.S. trade deficit fell 11.5% in November to a five-month low, helped by the falling cost of imported oil” writes Jeffry Bartash for marketwatch.com. The last time the U.S. trade deficit was higher was in 2008, when it topped $700 billion.The U.S. trade deficit added up to almost $552.3 billion in the first 11 months of 2018.The deficit with China slid $2.8 billion to $35.4 billion in November, but it had hit a record high earlier this year.The deficit shrank to $49.3 billion from a revised $55.7…

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Hammond set to abandon deficit rule as spending plans and student loans add to borrowing 

“The Chancellor will be forced to abandon another of his borrowing rules because of high spending plans and the extra burden of student debt at his spring statement next month” writes Tim Wallace for telegraph.co.uk. Growth also risks slowing further, potentially harming tax revenues or prompting Philip Hammond to increase government spending. “There is an odds-on chance the Government will miss its fiscal mandate,” said Amit Kara at the National Institute for Economic and Social Research (NIESR), referring to the Chancellor’s target of holding the structural deficit at below 2pc…

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The European Union’s subversion of democracy contributed to the recession in Italy

“Finally, the Conte government successfully persuaded the EC to approve a 2.0% fiscal spending deficit” writes Jim Edwards for businessinsider.com. They proposed a fiscal plan that would increase the spending deficit to 2.4% of GDP. The EU said no.To the surprise of no one, Italy has gone into a recession— two consecutive quarters of declining GDP growth. Source: businessinsider.com

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India to breach fiscal deficit target this financial year, finance ministry says

“India’s fiscal deficit this financial year would be 3.4 percent of gross domestic product (GDP), slightly higher than the targeted 3.3 percent, the country’s acting finance minister said on Friday while presenting an interim budget” reports cnbc.com. “Fiscal deficit has been brought down to 3.4 percent in the revised estimate of 2018/19,” Piyush Goyal told the lower house of parliament as he delivered the Hindu nationalist-led government’s last budget for an election that must be held by May. The deficit was widely expected to be higher than targeted due to…

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What investors will be looking for in India’s new budget this week

“Against the backdrop of a global slowdown in growth, spurred by China, India’s economic performance is being closely watched by investors” writes unknown author for cnbc.com. India is set to announce an interim budget on Friday that’s expected to reinforce economic support, especially in the flagging agricultural sector, and still keep government spending under control. While experts said they were not expecting sweeping changes in Friday’s budget, they predicted the government would likely announce measures to help farmers, low-income households and micro- to medium-sized businesses. Source: cnbc.com

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Deficit to Hit $897B This Year

“Those projections represent an improvement over recent ones from the budget office, which is Congress’ official nonpartisan agency for budget and economic figures” reports washingtonexaminer.com. The budget office also expects the U.S. economy to grow by 2.3 percent in 2019.The Congressional Budget Office projected Monday that the federal deficit will rise to $897 billion in fiscal year 2019 and then will swell to over $1 trillion per year starting in three years.Revenues from taxes are also down following the 2017 tax overhaul.Nevertheless, annual deficits will send the federal debt, which…

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Markets News Oil 

Trump has the chance of wiping out the U.S. trade deficit with China

“If you said shale-oil production helped the trade deficit improve in the past 10 years, you would be correct” writes Ivan Martchev for marketwatch.com. I believe that the U.S. trade deficit with China can be eliminated completely, as the Chinese have been employing a very clever trade policy — to the detriment of the United States.Since China is a hybrid economy, Chinese state buyers control where China buys from.That means that the rally in crude oil is a rally to sell, not a rally to buy.Both Republican and Democratic administrations…

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US-China trade talks are really about ‘a new world order,’ says asset management CEO

“Trade talks between the United States and China are not simply about trade but a “new world order,” the chief executive of a major asset management firm told CNBC. “The big uncertainty is the U.S.-China trade negotiation which is not really about trade, it’s about a new world order,” Investec’s Hendrik du Toit said at the World Economic Forum in Davos, Switzerland.”” writes Ryan Browne for cnbc.com. That trade deficit rose to its largest in a decade in 2018. The two countries have been trying to deescalate the trade war,…

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