Macron Warns Congress on the Rise of Nationalism, UK Growth Flatlines as Financial Distress Grows…

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This week French President Emmanuel Macron gave a speech to the U.S. Congress denouncing a rise in nationalistic tendencies throughout the world. In commenting on the subject, Macron said that isolationism was,

tempting to us as a temporary remedy to our fears. But closing the door to the world will not stop the evolution of the world. It will not douse but inflame the fears of our citizens.

We will not let the rampaging work of extreme nationalism shake a world full of hopes for greater prosperity.

According to a report by the BBC, Macron eluded to the probability that the United Nations and NATO – in their current guise – may not be able to honour their mandates and ensure global stability. This was on the premise that the West (led by the U.S.) engaged in protectionist measures on issues such as trade. The Washington Examiner expanded on this by quoting Macron directly:

We can build the 21st Century world order, based on a new breed of multilateralism, based on a more effective, accountable and results-oriented multilateralism, a strong multilateralism.

In international terms, multilateralism is defined as countries coming together as one to pursue common goals and address global problems. The Trilateral Commission was founded in 1973 on a very similar principle.

As I have discussed on numerous occasions, Macron is leading the political charge for structural reform of the European Union. Historically, major reform only originates out of instability and conflict.

The vehicles of nationalism and protectionism have been fashioned over the last two years and positioned as a threat to what world leaders and economic institutions refer to as therules based global order.’ Brexit and Donald Trump’s presidency are the leading examples of this. Actions emanating from these phenomenons are routinely blamed for ructions in the market place.

Through their own publications, central banks, the IMF and the Bank for International Settlements have demonstrated dogged persistence in characterising a rise in ‘populism‘ as jeopardizing the ‘global recovery‘. A position that has coincided with a tightening of monetary policy spearheaded by the Federal Reserve. Ultimately, globalist institutions are utilising the nationalism / protectionism narratives as cover for their actions. The fact that these themes remain constant in their communications is an indication that they still have some way to run before further attempts are made at consolidating power.

Elsewhere, markets are now discounting the possibility of the Bank of England raising interest rates in May after weaker than expected economic data over the past couple of weeks. It was announced on Friday that first quarter growth in the UK came to only 0.1%, with the ‘Beast from the East‘ weather front perceived as being partly responsible. In truth, GDP growth in the UK has been falling for the past few years. At present the UK’s automobile and construction sectors are mired in recessionary conditions.

A factor that likely won’t be considered in regards to any decision on rates is the growing distress amongst UK firms. According to Begbies Traynor, the first quarter of 2018 has shown that over 477,000 companies are in financial trouble. As has become custom, this is largely being attributed to ‘Brexit uncertainty‘.

However, Begbies Traynor’s executive chairman, Ric Traynor, has said the more immediate danger is the Bank of England:

 The most pressing issue is whether or not the Bank of England decides to raise interest rates next month. If they do, it could push many struggling businesses, particularly those with high levels of debt, into formal insolvency.

If the Bank of England take a longer term view and talk up a rise in domestic inflation, as well as pronouncing recent economic data as ‘transitory‘ (much as the Fed have done on previous occasions), I would expect the BOE to raise rates in May as first indicated in the minutes to their February MPC meeting.


ONS: UK Economy Grew by 0.1% in First Quarter

  • UK GDP growth was the slowest since Quarter 4 2012, with construction being the largest downward pull on GDP, falling by 3.3%.
  • While some impacts on GDP from the snow in the first quarter of 2018 have been recorded for construction and retail sales, the effects were generally small, with very little impact observed in other areas of the economy.

Yahoo: US economic growth slowed to 2.3 percent pace in Q1

  • The U.S. economy slowed to a moderate 2.3 percent annual growth rate in the first quarter as consumer spending turned in the weakest performance in nearly five years. Still, the January-March increase came in better than expected, supporting hopes for a solid rebound for the rest of the year.

Bloomberg: Saunders Makes Case for Rate Hike After Carney Rattles Markets

  • “We do not need to set policy in a way that will create rising spare capacity or higher unemployment. But our foot no longer needs to be so firmly on the accelerator,” Saunders said Friday in a speech in Glasgow after voting for an immediate rate hike last month.
  • Carney said in a BBC interview Thursday that policy makers will make their decision “conscious that there are other meetings” at which they could act this year. That was enough to shake confidence in a move in May, with market pricing dropping to less than 50 percent from more than 80 percent earlier in the week.

RT: We will bring down the government – DUP warns May over Brexit red lines

  • DUP leader Nigel Dodds threatened that his party is prepared to vote against Theresa May’s government if their Brexit “red lines” are crossed.
  • “The government’s well aware that when it comes to Brexit and the United Kingdom, the United Kingdom has to leave the European Union and all its institutions together.”
  • “That is an absolute red line for us, and if the government were to suggest that Northern Ireland were to be treated differently, in a way that Northern Ireland didn’t agree to… on the big issue of customs union, single market regulation, border down the Irish Sea, that would cross a very big red line for us.”

Sky News: Poundworld to axe up to 100 stores as high street turmoil goes on

  • Hundreds of jobs are under threat at the discount retailer Poundworld as its owners draw up plans to close more than a quarter of its 355-store estate.
  • Sky News has learnt that Poundworld is expected to announce proposals for a Company Voluntary Arrangement (CVA) during the first half of May, following similar moves by retailers such as New Look, Toys R Us UK and Carpetright.
  • If it proceeds with the CVA, sources close to Poundworld say it is likely to seek to close as many as 100 shops across the country.

BBC: High Street crisis forces hundreds of store closures

  • Nearly 650 shops and restaurants, run by a handful of major chains, have shut since the start of 2018 or are at risk of closure.
  • Maplin and Toys R Us sites account for half that total, according to analysis by BBC 5 live’s Wake Up to Money.

Guardian: Homebase sales plunge 20% after ‘beast from the east’ froze garden sales

  • The dire March trading meant like-for-like sales in the first three months of 2018 were down 15.4% on the same period last year – even worse than the 15.1% decline posted in the previous quarter.

Sky News: Government gives green light to £8.1bn GKN takeover

  • The Government has given the green light to Melrose’s £8.1bn takeover of British engineering giant GKN after finding there were no national security grounds for intervening in the deal.
  • Takeover specialist Melrose won shareholder backing for its bitterly contested bid last month despite fears it could take an axe to jobs at the company, which makes components for leading car and aircraft manufacturers.

BBC: UK car output slumps on poor demand

  • The number of cars made in the UK during March fell by 13.3% from a year earlier as both domestic and overseas demand for vehicles declined.
  • The Society of Motor Manufacturers and Traders (SMMT) said poor weather had affected production.
  • But it said that double-digit falls in output for the both home market and exports were a “considerable concern”.
  • The SMMT said the UK must stay in the customs union to ensure “frictionless trade”.

BBC: Nissan to cut hundreds of UK jobs

  • Nissan is to cut hundreds of jobs at its Sunderland car plant, as diesel sales decline.
  • The carmaker builds its Qashqai and Juke models at the north-eastern England site, where it employs 7,000 people.
  • As well as a fall in the demand for its diesel cars, the job losses relate to a switch in production to newer models.
  • The job cuts follow those at Jaguar Land Rover, which last week said it would shed 1,000 contract staff.

CNBC: ‘Gradual’ pace of rate hikes likely to hold for years, Fed’s Williams says

  • A sea change in economic conditions has pushed interest rates considerably lower than they were in the past and are likely to stay there for a while, San Francisco Fed President John Williams said Friday.
  • “Any way you try to cut this, slice and dice the data, the neutral rate appears to be much lower today than it was 10 or 15 years ago,” he said during a speech in his current home district. “If you would have asked me 20 years ago … what’s the neutral interest rate, I would have said 4.5 percent. … You ask my colleagues today, the answer today is 3 percent.”

Reuters: Fed’s Mester wants rate hikes this year and next

  • “If the economy evolves as I anticipate, I believe further gradual increases in interest rates will be appropriate this year and next year,” Mester said in remarks prepared for delivery at the University of Pittsburgh’s graduate school of business.
  • “Continued gradual reduction in monetary policy accommodation, given the economic outlook, will put monetary policy in a better position to address whatever risks, whether to the upside or to the downside, are ultimately realized,” she added.

Reuters: Fed’s Evans says inflation should average 2 percent

  • Chicago Federal Reserve Bank President Charles Evans on Friday said that because the Fed is aiming for an average of 2-percent inflation, it would not need to respond strongly if inflation rose a bit above 2 percent.
  • If inflation was at 2.25 percent for “some reasonable period of time,” he said, the Fed would only need to coax it lower, not slam on the brakes.

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