Home > August 2017 > August 4, 2017 NFP expected 183,000 , Section 301 and Abe in Japan really starting to become unpopular

August 4, 2017 NFP expected 183,000 , Section 301 and Abe in Japan really starting to become unpopular

August 4th, 2017

Rumors are on both sides whether Trump will impose section 301 against China for Intel Properties rights today. Section 301 gives US presidents broad latitude to retaliate against any trade policy in another country deemed unfair. It could be targeted tariffs against specific companies, like state-owned Chinese firms thought to be benefiting from American intellectual property. Or broader sanctions, like across-the-board tariffs on imports or restrictions on Chinese investments in the United States, where companies face no restrictions. NFP can only help the dollar because the Fed has leaned dovish so any dollar weakness has already been priced in. For Japan, Abe reshuffled his cabinet, he is really falling in his ratings. The days of unlimited bond buying could be finally coming to an end sooner then he wants? Some are saying that Japan can only keep this up until mid 2018, but with the drop in popularity it could come a lot sooner. Futures are flat in the first hour of the European session as we wait for NFP.

August 2017

  • Trading_Nymph

    from global times on Abe’s reshuffle…Japanese Prime Minister Shinzo Abe’s Cabinet reshuffle signals a “slight adjustment” of policy on China, an expert said on Thursday.

    Abe, recently hit by scandals and weakening support, appointed new ministers such as Foreign Minister Taro Kono and Defense Minister Itsunori Onodera in Cabinet reshuffle on Thursday.

    With the Cabinet reshuffle, Abe appears to be seeking a balance between the right and left wings. And appointing a new foreign minister, who is believed to hold a moderate view on China, would lead to a slight adjustment in Japan’s policy toward China, Hu Lingyuan, a professor at the Center for Japanese Studies at Fudan University in Shanghai, told the Global Times.

    “Since Abe is struggling with scandals and failing public support, he needs to find a way to stabilize his government, and the choice of Kono, who is considered a dove, (compared to Abe, who is on the hawkish side) surprises me, and shows Abe’s willingness to balance the Cabinet,” Hu said.

    Kono, 54, is the son of former chief cabinet secretary Yohei Kono, who wrote a landmark 1993 apology to “comfort women” forced to work in Japanese wartime military brothels.

    Kono headed the National Public Safety Commission for 10 months, and was responsible for G7 summit security in Ise-Shima while working as administrative reform minister.

    Latest opinion polls show support for Abe has plunged to its lowest since he took power in December 2012 with a promise to revive Japan’s economy and bolster its defenses, endangering his goal of revising the pacifist constitution.

    Abe had until recently also been seen as likely to win a third term as head of the ruling Liberal Democratic Party (LDP), putting him on track to be Japan’s longest-serving prime minister.

    But support has fallen below 30 percent, with the opposition fanning suspicions of Abe’s favoritism to a friend and voters believing that he and his aides have grown arrogant in office. He was also hurt by the LDP’s defeat by a novice political party in a July assembly

    election, Reuters reported on Thursday.

    New LDP policy chief Fumio Kishida, the former foreign minister, emphasized the Cabinet’s intention to return to fundamentals after taking up his new post.

    “We need to fulfill economic policies under Abenomics so that the public can better feel the benefits of Japan’s economic revival,” Kishida told a news conference, referring to Abe’s signature plan to reboot Japan’s economy.

    Agencies contributed to this story

  • Trading_Nymph

    WASHINGTON (Reuters) – U.S. President Donald Trump’s threat to investigate China’s intellectual property and trade practices is valid, but his administration may not be up to the delicate task of carrying out a new China probe without sparking a damaging trade war, U.S. business lobbyists told Reuters on Thursday.

    The lobbyists’ fears that Trump could mishandle such an inquiry came as he searched for ways to increase pressure on China to do more about reining in North Korea’s nuclear and missile programs, with trade policy viewed as a useful lever.

    Lobbyists said Trump was right to criticise China on trade, but they expressed concern about general disorganization and inconsistency at the White House and warned that Trump might make matters worse with China if he follows through.

    “Companies, I think, are rightly concerned about how this administration will handle any sort of enforcement action or investigation given that we have not seen this administration be particularly nuanced or strategic in its approach,” said a technology industry source who asked not to be identified because the issue is still under consideration by the White House ahead of a public announcement.

    Trump is expected to issue a presidential memorandum declaring Chinese theft of intellectual property a problem that requires a U.S. response. At the same time, U.S. Trade Representative Robert Lighthizer is expected to launch an investigation based on Section 301 of the Trade Act of 1974.

    The White House had been expected to make an announcement on Friday, but it has been postponed.

    Section 301, a popular trade tool in the 1980s that has been rarely used in the past decade, could lead to the president unilaterally slapping tariffs or other trade limits on China. The Section 301 process also can bypass the World Trade Organization procedures for adjudicating global trade grievances. Though widely used worldwide, the WTO process is viewed unfavourably by the Trump administration.

    Trump’s willingness to use “obsolete U.S. trade law,” could create problems, said Chad Bown, a trade expert at the Peterson Institute for International Economics, a private think tank. “While the administration has identified a legitimate policy problem, Trump’s proposed solution may only make matters worse.”

    As speculation of a Section 301 probe rippled through Washington, a diplomatic deal that includes China appeared to be taking shape at the United Nations on Thursday that would impose stronger UN sanctions against North Korea.

    In addition to the United States, the European Union, Japan, Germany and Canada have all expressed concern about China’s behaviour on intellectual property theft. The technology sector has been especially hard hit in IP disputes.

    “Our members generally support trade enforcement, but want the administration to be careful those actions don’t lead to a trade war,” said an official with one business trade group, asking not to be identified because the White House had not yet made an announcement.

    Business lobbyists have been in talks with the White House on the issue, but some reported uncertainties.

    “We’ve been talking with (National Security Council) but frankly for us even, it’s difficult to determine exactly who are the decision makers,” the technology industry source said.

    “We just don’t know exactly what the mentality will be or … the decision making or calculus.”

  • panther341

    well, those guys who have been shorting the Euro for weeks got some relief today. Most not profitable yet however! LOL

  • panther341

    OPEC having a compliance meeting in Abu Dhabi Monday and Tuesday. IRAQ and UAE are the worst offenders but UAE at least claiming their level from which the cuts were to be measured is wrong. http://www.reuters.com/article/us-opec-oil-compliance-idUSKBN1AJ280

    In the meantime, recall that Ecuador (which is an OPEC member) has said it will no longer comply. Then there is Venezuela and US has said it will not buy Venezuela oil. This will affect several refiners who are set up to refine Venezuelan crude (which is heavy and sour – high salt and sulfur content which are caustic but which makes the oil cheaper)

  • panther341

    Tuesday: everything was slightly weak until 30 minutes after the open and then we had JOLTS job numbers and now we have record highs in SPX, DJIA. LOL Dollar reversed, to the upside. Gold reversed to the downside. Breadth ain’t so hot. Nasdaq COMP and RUT not so hot. RUT is actually stuck below the 50 day moving average as of noonish my time.

    Retail this morning had some good earnings from KORS (which is buying Jimmie Choo) as well as RL. CVS not so much good.

    This afternoon the headliners are DIS and PCLN, MNST plus TRIP, TSO, CYBR

  • panther341

    OPEC + Russia meeting: well it seems non OPEC countries other then US are producing more, so they met with Kazakhstan and Malaysia as well. Ecuador not mentioned – so I guess they didn’t go. SOunds like UAE and Iraq not happy. Hmmmmmmm. Oil didn’t crash. Dollar is up. Oil didn’t crash. http://www.reuters.com/article/us-opec-oil-compliance-idUSKBN1AO171?il=0