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European stocks march higher on hope of economic recovery



European stocks continued to climb on Thursday as optimism about the reopening and quick recovery of economies outweighed fears of a second wave of coronavirus infections and further escalation in US-China tensions.

London’s FTSE 100 rose 0.7 per cent while and Frankfurt’s Xetra Dax pushed 1 per cent higher in early trading on Thursday, while the continent-wide Stoxx 600 index was also up 1 per cent.

Brussels’ proposal on Wednesday to borrow €750bn for its recovery fund continued to raise hopes of a quicker economic rebound in Europe, as governments gradually lift restrictions on activity across the continent.

Economists at Goldman Sachs said that the EU recovery fund, together with the purchasing of riskier assets by the European Central Bank, will contain sovereign risk in the eurozone in the short term.

“We believe global economic activity has now bottomed, and expect a strong sequential recovery in advanced economies in the second half of 2020, assuming infection rates don’t reaccelerate sharply as economies continue to reopen,” they said.

They added that they expect global gross domestic product to contract by 4 per cent this year, worse than the year following the financial crisis in 2008, but the worst is likely to be over.

Investors continue to watch closely for any fresh clusters of Covid-19 outbreaks. South Korea reported 79 new coronavirus cases on Thursday — the largest rise in daily cases for more than two months — leading the government to strengthen quarantine measures for two weeks in the metropolitan area surrounding capital Seoul.

However, the rally of stock markets in Europe and the US has so far defied fears of a second wave of infections, a slow recovery and the deterioration in relations between Washington and Beijing.

On Wednesday, the benchmark S&P 500 index closed 1.5 per cent higher, building on the rally that has now been running for two months. Futures markets pointed to gains of 0.3 per cent when Wall Street opens later in the day.

Hong Kong’s Hang Seng index bucked the trend, dropping 0.8 per cent on Thursday as Washington took initial steps towards potentially removing the city’s special trade status.

Overnight, US secretary of state Mike Pompeo said the US no longer viewed Hong Kong as autonomous from mainland China. The statement was the most serious response from the Trump administration yet to Beijing’s decision to impose a new national security law on Hong Kong, in a move that has raised concern about the territory’s future as a financial centre.

“No reasonable person can assert today that Hong Kong maintains a high degree of autonomy from China, given facts on the ground,” Mr Pompeo said.

China’s National People’s Congress is expected to pass a motion to begin drafting the security law on Thursday. The legislation had prompted a flare up in street protests in the semi-autonomous territory.

“The moves from Washington, if and when they are actually enacted, will obviously be negative [for Hong Kong] in the short term,” said Andy Maynard, a trader at Hong Kong-based China Renaissance.

Elsewhere in the region on Thursday, China’s CSI 300 index of Shanghai and Shenzhen-listed stocks edged down 0.3 per cent. The renminbi steadied after China’s central bank set the currency’s trading band against the dollar at a stronger rate than expected by analysts.

Japan’s benchmark Topix index rose 1.8 per cent, while Australia’s S&P/ASX 200 climbed 1.3 per cent.

Analysts have cautioned that it may only be matter of time until rising US-China trade tensions are felt even more keenly in markets.

“It is hard not to see the remarks by Mike Pompeo on Hong Kong overnight as anything but a gloves-off restart of US political hostilities towards China which will probably see trade tensions worsen and tit-for-tat retaliation commence,” said Robert Carnell, head of Asia-Pacific research at ING. “Personally, I struggle with the markets’ calm in the face of this.”

Oil prices fell after reports that Russia is considering easing its supply cuts from July. Brent crude, the international benchmark, fell 2.1 per cent to $34.01 per barrel and West Texas Intermediate, the US marker, dropped almost 3 per cent to $31.85 a barrel.

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Australian Finance Minister Cormann to resign at end of year




CANBERRA, Australia — Australian Finance Minister Mathias Cormann, one of Prime Minister Scott Morrison’s most senior Cabinet members, says he is retiring from politics at the end of the year.

Belgium-born Cormann, who has been finance minister since 2013, entered federal politics in 2007 and became the leader of the government in the Senate, the upper house of Parliament, in 2017.

His decision to remove his support for former Prime Minister Malcolm Turnbull and instead support Peter Dutton was seen as a major reason for the 2018 change that led to Morrison becoming the country’s leader.

“Having decided not to re-contest the next election, I can confirm that I have advised the prime minister that the end of this year would be an appropriate time for an orderly transition in my portfolio,” Cormann said in a statement Sunday.

Cormann said he would spend the next six months working with Morrison and Treasurer Josh Frydenberg on finalizing the July economic statement, the budget in October and the half-yearly budget update in December.

The budget is usually delivered in May, but has been delayed until October because of the coronavirus.

Cormann, 49, decided to migrate to Australia permanently from Belgium after visiting Perth, Western Australia, in 1994.

The Associated Press

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Eat out to help economy, finance chief tells Britons – News




Chancellor Rishi Sunak says shutdowns have been very painful for hospitality sector

Britain’s finance minister urged people on Saturday to “eat out to help out” the economy claw its way from a historic decline sparked by the coronavirus crisis.

The comments by Chancellor Rishi Sunak were published on the day England finally reopened its beloved pubs and the rest of the hospitality sector after more than three months of lockdown.

Britain’s shutdown has been one of Europe’s longest because of an official toll – 44,131 – that only trails those of the United States and Brazil.

Sunak said the closures have been especially painful for Britain because consumption makes up about two-third of its gross domestic product.

“That’s more than most of our peers,” he told The Times newspaper.

“So we’ve got a situation like this, with social distancing we’re obviously going to be particularly impacted by that.”

Sunak said he “worried about a generation that is scarred by coronavirus” – especially younger people who see the hospitality sector as their way into the job market.

“For me this is really about social justice,” he said.

“People act responsibly, but ultimately if we eat out to help out we can protect those jobs. It’s not abstract.”

The true scale of Britain’s unemployment problem will only be revealed once the government starts winding down its jobs furlough scheme in August.

The state currently supports 80 per cent of most people’s wages. But jobless claims still surged 126 percent to 2.8 million in the three months to May.

Sunak will make an economic statement to parliament next week that will be watched closely for signs of how much support the government intends to give businesses in the future.

The government is running up debts but interests rates are low and borrowing costs remain at a historic low.

The Bank of England’s chief economist Andy Haldane created waves this week by predicting a “V-shaped” recovery that will see old levels of performance return soon.

Sunak was less certain.

“We all want Andy to be right,” he said.

“But we have got to be realistic as well. You can’t shut down your economy in the way that we have for this many months without there being hardship as a result.”

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Trump’s niece says 2001 NDA based on ‘fraudulent’ financial information | US news




Lawyers for Donald Trump’s niece seeking to clear her path to publish a book about the family have cited “bombshell” New York Times reporting on the Trumps’ tax affairs as proof a non-disclosure agreement signed in 2001 was based on “demonstrably fraudulent” financial information and should be held invalid.

Attorneys for Mary Trump made the argument in filings in New York state supreme court in Dutchess county this week.

Simon & Schuster is set to publish Too Much and Never Enough: How My Family Created the World’s Most Dangerous Man on 28 July. The president’s brother, Robert Trump, is seeking to block it, citing the NDA which was signed after litigation over a family will.

Earlier this week, a judge in New York granted a temporary restraining order against Mary Trump and the publisher. But in a sign that the book is likely to come out regardless, Simon & Schuster was released from the order, after saying it had printed 75,000 copies and started to ship them to sellers, and had been unaware of the NDA.

Simon & Schuster also published The Room Where It Happened, former national security adviser John Bolton’s tell-all memoir which a federal judge declined to block. It sold nearly 800,000 copies in its first week in stores.

In a statement, Simon & Schuster echoed lawyers for Mary Trump when it cited first amendment guarantees of free speech and said the book was of “great interest and importance to the national discourse that fully deserves to be published for the benefit of the American public”.

It added: “As all know, there are well-established precedents against prior restraint and pre-publication injunctions, and we remain confident that the preliminary injunction will be denied.”

A hearing is scheduled for 10 July.

Mary Trump is the daughter of the president’s elder brother, Fred Trump, who died in 1981. She has rarely spoken publicly but she has expressed dismay over her uncle’s political career on social media.

In publicity material, Simon & Schuster says the trained clinical psychologist will offer both a “revelatory, authoritative portrait of Donald J Trump and the toxic family that made him” and “a nightmare of traumas, destructive relationships … neglect and abuse”.

Mary Trump was reportedly a key source for the Times reporting on the Trump family’s taxes, which won a Pulitzer prize.

In an affidavit filed on Thursday, she said: “The New York Times’s detailed analysis and investigation revealed for the first time that the valuations on which I had relied in entering into the settlement agreement, and which were used to determine my compensation under the agreement, were fraudulent.

“I relied on the false valuations provided to me by my uncles and aunt, and would never have entered into the agreement had I known the true value of the assets involved.”

Donald Trump’s surviving siblings are Robert Trump, a businessman; Maryanne Trump Barry, a retired judge; and Elizabeth Trump Grau, a retired banker.

“I never believed that the settlement agreement resolving discrete financial disputes could possibly restrict me from telling the story of my life or publishing a book,” Mary Trump said, “… including the conduct and character of my uncle, the sitting president of the United States, during his campaign for re-election, my aunt Maryanne, a former federal judge, or my uncle Robert, a prominent public figure.

“Moreover, my uncle, the president, has spoken out about our family and the will dispute on numerous occasions.”

Mary Trump’s lawyers also cited the president’s hunger for media coverage.

“President Trump himself has contributed to his and his family’s notoriety in a variety of ways,” they wrote, “including as the author of nearly 20 books on a variety of topics, including his family, his wealth, his businesses and his own life.

“Among the most notable of all the media coverage of the Trump family is a bombshell investigative piece published in the New York Times on 2 October 2018, describing schemes Donald Trump and his father employed to transfer nearly a half a billion dollars to Donald Trump, Robert Trump and Maryanne Trump Barry, while systematically evading their tax obligations.”

Robert Trump, the lawyers wrote, “is concerned that [Mary] Trump will reveal details about her dealings with the New York Times, her difficult relationship with her family, and the Trump family’s financial dealings. But all of those facts have been made public.

“Contemporaneous news reports surrounding [Mary] Trump’s suit 20 years ago laid bare the rancorous relationship between the Trump family and [Mary] Trump.”

Robert Trump is represented by Charles Harder, a lawyer who has worked extensively for the president.

Responding to the temporary restraining order against Mary Trump, Harder said he would seek the “maximum remedies available” for what he called her “truly reprehensible” actions.

“Short of corrective action to immediately cease their egregious conduct,” he added, “we will pursue this case to the very end.”

Harder has called the New York Times’ reporting on Trump family tax affairs “100% false, and highly defamatory” and said: “There was no fraud or tax evasion by anyone.”

Breaking with precedent, Donald Trump did not release his tax records while running for office. He has not released them since, despite promising to do so.

The president’s financial records have become the subject of legal tussles between the White House, Democrats in Congress and prosecutors in New York. A supreme court ruling on whether they should be released is eagerly awaited.

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