1 US jobless rate at nine-year low (BBC) The US
unemployment rate fell to a nine-year low in November, adding to expectations
that US interest rates will rise later this month. Figures from the Labor
Department showed the US economy created 178,000 jobs in November, while the
jobless rate fell to 4.6% from 4.9% in October.
The data adds to recent evidence of healthy growth
in the economy, although wage growth was weaker than expected. Most analysts
think the Federal Reserve will raise rates at its next meeting. The Federal
Reserve will hold its next two-day policy meeting on 13-14 December.
Last month, the chair of the Fed, Janet Yellen,
indicated that the US central bank could raise interest rates "relatively
soon", adding that the US economy was "making very good
progress". Recent figures indicated that the US economy grew at an annual
pace of 3.2% in the third quarter of the year.
2 Trump irks China by dialing Taiwan (Tom Phillips,
Nicola Smith & Nicky Woolf in The Guardian) Donald Trump looked to have
sparked a potentially damaging diplomatic row with China on Friday after
speaking to Taiwanese president Tsai Ing-wen on the telephone in a move experts
said would anger Beijing.
The call is thought to be the first between the
leader of the island and the US president or president-elect since ties between
America and Taiwan were severed in 1979, at Beijing’s behest.
The US closed its embassy in Taiwan – a
democratically-ruled island which Beijing considers a breakaway province – in
the late 1970s following the historic rapprochement between Beijing and
Washington that stemmed from Richard Nixon’s 1972 trip to China.
Since then the US has adhered to the so-called ‘one
China’ principle which officially considers the independently governed island
part of the same single Chinese nation as the mainland. Trump’s transition team
said Tsai, who was elected Tawain’s first female president in January, had
congratulated the billionaire tycoon on his recent victory.
Experts said the unanticipated call would infuriate
China’s leaders, even before Trump took office. Trump adviser Peter Navarro, an
economics professor, travelled to Taiwan in the first half of this year at the
invitation of its ministry of foreign affairs.
Paul Haenle, the head of the Carnegie-Tsinghua
Centre in Beijing, said the call would serve as “a reality check” for many in
Beijing who had expected Trump would be transactional and pragmatic leader who
might begin a US retreat from Asia and would not challenge China on issues such
as human rights.
Speaking to CNN’s Anderson Cooper, senior Trump
advisor Kellyanne Conway defended the president-elect’s unorthodox move. “I’m
pretty certain that president-elect Obama spoke to world leaders in preparation
for taking over as commander-in-chief,” she said. Pressed that Obama never
broke with US diplomatic policy in this way, Conway said that Trump was “fully
briefed and fully knowledgeable about these issues.”
3 Oil prices unlikely to take off (Wong Wei Han in
Straits Times) Oil prices may have surged after Opec's move to curb production,
but investors should not expect a longer-term explosive recovery, leading
analysts said.
The Organisation of Petroleum Exporting Countries
struck a deal to cut production. The news sent two key oil benchmarks, Brent
crude futures and West Texas Intermediate (WTI), surging almost 10 per cent
overnight, with WTI briefly rising above the $50-per-barrel level.
Credit Suisse investment strategy head Nannette
Hechler-Fayd'herbe believes the recovery is sustainable - to some extent. "We
see only limited chances of (WTI) going way above $60. Above this level, many
US shale projects will turn profitable again and the production will just
restart… Our 2017 target is somewhere in the upper $50s."
A better way for investors to benefit from the
Opec-related sentiment is through currencies, particularly the Russian rouble
and Norwegian krone, Credit Suisse senior Asia-Pacific currency investment
strategist Heng Koon How added.
Credit Suisse expects the US economy to grow 2 per
cent next year, up from the forecast 1.5 per cent growth this year. But the
Wall Street bull run may taper off, and US equities are set to offer just about
3 per cent of total return next year, as "the market has already priced in
all the good news", Ms Hechler-Fayd'herbe said.
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