Archives for January 2017

ECB leaves interest rates at record lows, hints at more stimulus

According to the data, the annual increase in consumer prices in January was the fastest since early 2013. The figure was almost in line with the European Central Bank’s target which wants to keep inflation just below two percent.

Core inflation which excludes energy and food costs remained at 0.9 percent in January.

Some policy makers have already put into question the European Central Bank’s (ECB) appropriate degree of monetary stimulus for the 19-nation currency bloc, calling for the bank to scale back its bond-buying program.

“The renown ‘powerhouse’ of the eurozone is now putting significant pressure on the ECB President [Mario Draghi] as Euroskeptics are quickly pointing out that stimulus measures are falling far short of creating a balanced and improved bloc state..,” the head of Dealing at Foenix Partners, Alex Lydall told the Guardian.

“Draghi is erring on the cautious side, but this type of data makes it harder for him to defend his position,” Holger Sandte, chief European analyst at Nordea Markets in Copenhagen was cited as saying by Bloomberg. “New projections could force him into changing his tone.”

Eurostat statistics show eurozone economic growth accelerated at the end of 2016, up by 1.8 percent in the fourth quarter from a year earlier. The euro area outperformed the US economy last year, growing by 1.8 percent in comparison with the United States’ 1.6 percent growth.

READ MORE: Eight eurozone countries under EU budget hammer

The eurozone’s unemployment rate fell to 9.6 percent in December, which is the lowest rate since May 2009. There are still more than 20 million people out of work in the EU, including 15.571 million in the euro area.

Germany’s job market has remained as strong as ever with the jobless rate down to 5.9 percent. Greece suffered the worst jobless rate (at 23 percent in October 2016) followed by Spain (18.4 percent).

Article source: https://www.rt.com/business/375801-eurozone-inflation-surges-ecb/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Slovenia being the home country of the new US First Lady Melania Trump is seen as a key factor.

“The interest in Slovenia hasn’t only increased since Trump’s victory but already began when he announced his presidential candidacy. Slovenia, as a boutique holiday destination, has become better known among the US public and media. Due to the increased interest, the Slovenia Tourism Board (STB) plans its most intense digital campaign ever in the US market for 2017,” said STB spokesperson Livija Kostantinovic earlier this months as quoted by AFP.

The number of overnight stays by US tourists jumped by 15.4 percent in December and 10.2 percent in the whole of 2016.

Slovenia also saw a 7.6 percent increase in the number of tourist overnight stays with some 11.1 million people visiting the country last year against a rise of 7.2 percent in 2015.

The overall figure of foreign tourist stays rose 10.3 percent in the whole year with most visitors coming from Italy, Austria, Croatia, Germany and Serbia.

Melania Trump’s hometown of Sevnica was one of the first to catch the trend of the US First Lady factor.

A local bakery started selling “First Lady” apple pies from apples grown in Slovenia, featured a letter ‘M’ on top and a paper US flag attached.

Melania cakes, Melania pancakes, and Presidential Burgers are offered in restaurants and cafes across the small town nestled in the foothills of the Alps.

The government expects tourism to add to Slovenia’s economy that is expected to expand by 2.9 percent this year versus some 2.3 percent in 2016.

Slovenia is famous for its affordable skiing and snowboarding resorts offering holiday-makers winter atmosphere of snow-covered mountains and 300 kilometer-long slopes.

Article source: https://www.rt.com/business/375799-melania-trump-slovenia-travel/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

The penalties imposed in 2014 have been pulling Russia’s economy back, and have kept the ruble from strengthening. But a weaker ruble makes it easier for the Russian government to balance the budget.

Kremlin says lifting of sanctions not discussed in Russia-US talks

Should the US ease restrictions the value of the ruble may go up by ten percent, according to a majority of experts surveyed by Bloomberg. Forty-one percent of experts expect the Russian currency to gain up to five percent.

READ MORE: Ruble hits 1.5yr high against dollar on Trump’s economic policy vacuum

Russia’s national budget income is mostly tied to oil and gas exports with all the contracts made in US dollars. This means the ruble, which has lost half of its value since 2014, may compensate a threefold reduction in oil prices with the budget income not falling as much as it could have if the rate was stronger.

A weaker ruble boosts domestic manufacturing and trade with a stronger national currency able to distort the competitiveness of local producers. To avoid that, the authorities announced plans to resume purchases of foreign exchange to weaken the ruble further.

“Russian officials won’t be too happy about the ruble’s rally and will certainly intervene. Look at their reaction to the current ruble levels. Of course, they won’t let it strengthen too much,” said Vadim Bit-Avragim, a money manager at Kapital Asset Management in Moscow, as quoted by Bloomberg.

On Tuesday, the Russian Finance Ministry recommended devaluing the ruble by ten percent.

READ MORE: Russia could maintain its Reserve Fund with oil at $50

The Russian ruble has been one of the world’s best-performing currencies since touching a record low last January. The currency is up about two percent against the dollar so far this year following its best-ever year in 2016 when it managed to gain 20 percent. The ruble was trading 0.2 percent stronger at 60.0375 against the dollar as of 10:15am in Moscow.

There has been speculation that President Trump may ease the punitive measures against Moscow brought by the former US administration. The two heads of state did not discuss the issue in their first phone talk, according to Kremlin spokesman Dmitry Peskov.

Article source: https://www.rt.com/business/375769-ruble-russia-no-hurry-sanctions/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Deutsche Bank probed by UK regulator for ‘laundering Russian cash’

According to New York State’s Department of Financial Services (DFS), the penalty is linked to claims the money was moved out of Russia using so-called mirror trades among the bank’s Moscow, London, and New York offices.

DFS fined the bank $425 million, while Britain’s Financial Conduct Authority (FCA) penalized Deutsche £163 million (about $204 million).

The practice known as ‘mirror trades’ is when clients allegedly purchased stocks in rubles through Deutsche’s Moscow office and then sold identical ones for foreign currency, including US dollars, through the bank’s London office. Several of the sellers were based offshore in Cyprus or the British Virgin Islands and were paid in dollars routed through Deutsche’s New York office.

“This Russian mirror-trading scheme occurred while the bank was on clear notice of serious and widespread compliance issues dating back a decade,” said DFS Superintendent Maria Vullo.

The FSA’s fine is the largest financial penalty ever applied by the British regulator.

“The size of the fine reflects the seriousness of Deutsche Bank’s failings. We have repeatedly told firms how to comply with our AML requirements, and the failings of Deutsche Bank are simply unacceptable,” said Mark Steward, the FCA’s director of enforcement and market oversight. “Other firms should take notice of today’s fine and look again at their own AML procedures to ensure they do not face similar action.”

The DFS and FSA fines come less than two weeks after Deutsche Bank reached a $7.2 billion settlement with the US Department of Justice over its role in the 2008 global financial crisis.

Europe’s biggest lender has agreed to pay a $3.1 billion civil penalty and provide $4.1 billion in consumer relief to homeowners, distressed borrowers, and affected communities.

Article source: https://www.rt.com/business/375749-deutsche-bank-russia-fine/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Previously, officials claimed that the pipeline – which would transport natural gas into the EU – was “detrimental to Sweden’s political and security interests.”

“The government’s assessment remains unchanged. We will meet representatives of Karlshamn community tonight to receive information from them. If they decide to rent out the port, we will need to take measures,” Marinette Nyh Radebo, press secretary of Defense Minister Peter Hultqvist, said ahead of an official decision set to be announced on Tuesday.

Nyh Radebo said that any approval of the project would be accompanied by a strengthening of the coast guard, armed forces, customs, and tighter surveillance over the strategic Baltic port, which is located 50 km away from the key Karlskrona naval base.

The official was responding to a report disseminated by state-owned Swedish Radio, which claimed that the government had its concerns assuaged, noting there is already a significant volume of Russian maritime traffic at the port.

The center-left alliance that controls the municipality of about 20,000 people had lobbied for project, which will follow the path of the first Nord Stream pipeline, completed in 2011, to be given the green light.

“The goal is still to implement the deal,” Mayor Per-Ola Mattsson, whose municipality will net an extra €3-6 million as a result, said on Monday. “Many other ports have Russian crews too, if it is a concern here, why isn’t it a concern anywhere else?”

The original 1,200-km pipeline, which runs ashore in Germany, was vehemently opposed by several Eastern European states, alarmed by Moscow’s potential grip on the continent’s energy security, but it was approved in Sweden.

READ MORE: EU ratifies increased Gazprom use of key gas pipeline – WSJ

The second pipeline, which will double the capacity of Nord Stream to 55 million cubic meters, is being built against an even fiercer backdrop of resistance, considering that Russia is still under EU sanctions.

If all goes to plan, Nord Stream-2, which is expected to cost around €10 billion, will come online in 2019. It will be majority-owned by Russian state giant Gazprom, with minority stakes held by Basf, E.On, Engie, OMV, and Shell.

Article source: https://www.rt.com/business/375697-nord-stream-sweden-karlshamn/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

The company removed application of the biggest Iranian e-commerce service, Digikala, which has millions of users, Iran’s tech news site Techrasa reports.

Last September, Apple temporarily opened the App Store for businesses based in Iran, gradually lifting limitations previously imposed due to international sanctions.

As there is no official App Store available in the Islamic Republic, most of the companies had to register their apps as being outside of the country.

READ MORE: Tehran gets cut-price Boeing deal

Digikala service uses the Shaparak payment operator, which is completely isolated from international systems. That would allow the service not to contradict Apple’s terms.

Moreover, several Iranian banks have apps for the iOS platform which are often side-loaded onto phones.

When attempting to upload apps Iranian startups apparently received the following message:

“Unfortunately, there is no App Store available for the territory of Iran. Additionally, apps facilitating transactions for businesses or entities based in Iran may not comply with the Iranian Transactions Sanctions Regulations (31CFR Part 560) when hosted on the App Store. For these reasons, we are unable to accept your application at this time. We encourage you to resubmit your application once international trade laws are revised to allow this functionality.”

Iran’s with a population of nearly 80 million loves its gadgets. Over 40 million smartphones, or which six million are iPhones, are currently used by Iranians. Some 100,000 iPhones are smuggled into the country every month, according to Techrasa.

#Iran on European shopping spree

Trade – the mothers milks of peace and peaceful coexistence!

“Iranian… https://t.co/GKlqYLDdjH

— judy morris (@judymorris3) January 27, 2016

The Iranian Transactions and Sanctions Regulations issued by the US Department of the Treasury blocks the market that might become a highly lucrative one for Apple.

Article source: https://www.rt.com/business/375628-apple-removes-iranian-apps-reports/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Trump tells Germany to buy American automobiles, Germany to Trump: ‘Build better cars’

Toyota topped the sales charts for the past four years sold 10.175 million vehicles globally in 2016.

The increase in Volkswagen sales came on the back of surging demand in China, its second-largest market after Europe. The popularity of the Audi and Porsche brands has also boosted worldwide deliveries.

While VW is embroiled in the diesel emissions scandal in Europe and the US, the automaker is selling almost no diesel vehicles in China. Shipments there rose 12.2 percent last year.

Sales plunged 34 percent in Brazil and slipped nearly three percent in the US while gaining four percent in Europe.

“The development of the US market is set to decide if VW can stay ahead of Toyota this year,” a Frankfurt-based analyst at Commerzbank told Bloomberg. “If the Chinese and European markets continue to be solid and the US market weakens as I expect, VW might stay first in 2017 as Toyota has a larger exposure to North America.”

READ MORE: Trump threatens Toyota on Twitter with ‘big border tax’ if they build plant in Mexico

Toyota could face a tricky 2017 in the US with pressure from President Donald Trump over its plans to build a plant in Mexico. The Japanese company announced a $10 billion investment in the American market over the next five years following Trump’s criticism.

“Trump is a bigger risk for Toyota than for Volkswagen because the German carmaker has a small exposure to the US market,” said Ken Miyao, an analyst at Tokyo-based market researcher Carnorama.

In July, Volkswagen announced a new business strategy to go green, with a €10 billion investment in ride-sharing technology, electric cars, and automated driving. The automaker wants to launch 30 new electric car models within a decade.

READ MORE: VW goes green, cutting over 40 car models

“Our new strategy through 2025 doesn’t include any sales targets anymore,” said Dietmar Voggenreiter, sales chief at VW’s premium-car unit Audi. “These times are over.”

Article source: https://www.rt.com/business/375627-vw-worlds-biggest-carmaker/?utm_source=rss&utm_medium=rss&utm_campaign=RSS