China, EU to discuss trade disputes
China said it would hold talks with the European Commission on Monday to discuss a trade row over solar panels and wireless equipment, laying the ground for formal negotiations amid concerns of an escalating dispute.
China's Vice Commerce minister Zhong Shan will meet EU Trade Commissioner Karel De Gucht in Brussels to discuss EU investigations into Chinese solar panels and wireless equipment, the Ministry of Commerce said on Sunday.
The EU accuses China of unfairly pricing its solar panels and mobile telecom devices too cheaply and "dumping" them in Europe, and plans to impose duties on Chinese panel makers.
China denies the allegations. China Premier Li Keqiang, who is touring Europe this week, censured the EU's plans for Chinese solar makers late on Friday, saying "they harm others without benefiting oneself".
Trade disputes between China and the EU have risen in recent years as commercial ties between the two deepened. Eighteen of 31 trade investigations conducted by the EU involves China.
The fall-out over solar panels, which climaxed this month after the European Commission agreed to impose import duties averaging 47% on Chinese panel makers, is the largest to date.
It could hurt €21bn ($26.9bn) worth of Chinese solar panels sold in Europe sales that account for 60% of China's total solar panel exports and 7% of the country's total exports to the EU.
Both sides have negotiated in the past but with no success. Beijing on its part has condemned the proposed EU duties and urges dialogue while tacitly threatening retaliation.
This is not the first time Chinese solar panel makers are running afoul of foreign regulations. The United States imposed five-year duties as high as 36% on China solar products in November.
Trade rows over Chinese solar panel prices come as China's manufacturers battle a glut in capacity and falling demand.
China is set to decide in June whether it wishes to levy its own duties on European, US and South Korean imports of solar-grade poly silicon, a raw material used in making solar panels.
Potential Federal Reserve Policy Changes Could Make For Volatile Summer
Have your summer vacation all booked? Hoping to
ignore your phone for a while, feeling safe in your investments and secure in
the knowledge that the world's financial authorities aren't planning any
surprises just yet?
Think again.
U.S. Federal Reserve Chairman Ben Bernanke made it clear in congressional testimony this week that the central bank could very well entertain a change in policy sooner than many had predicted. That would mean providing less stimulus to the economy by cutting back on its bond buying program.
The result was an unsettling bout of volatility, with Treasury yields jumping while stocks slid, as investors feared the Fed's support might start to recede.
And that means this could be a summer when investors may find the waves are not only on the beach.
While Fed-watchers are hard-pressed to see a turning point at the bank's June policy meeting, there are plenty of other spots this summer when the Fed could start to prepare markets for change.
Besides the June meeting, there is a policy meeting in July and the release of minutes from both those meetings that will follow. There are three Fridays where monthly jobs data will be released, and plenty of inflation readings and other, lesser economic datapoints.
And of course, there are other potential flashpoints. Will an heir to Bernanke emerge? Will the annual monetary policy symposium in Jackson Hole, Wyoming, this August matter without Ben Bernanke?
Here's what to watch for this summer on the Fed front.
FED MEETINGS AND MINUTES
Fed policymakers meet twice more before the Sept. 2 Labor Day holiday this year: June 18-19 and July 30-31. In addition, the minutes of those Federal Open Market Committee meetings will be released three weeks later.
The June meeting is likely "as good a target as any" for a signal from the Fed about their future plans, said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington, D.C.
The Fed doesn't want to startle investors, because that would be disruptive. Expect plenty of flags, through meeting statements and minutes, before policymakers make any movements.
DATA DELUGE: JOBS VS INFLATION
The Fed's dual mandate means that both jobs and inflation data will be key. Labor data has been more encouraging of late, with the unemployment rate down to 7.5 percent. The Fed has said it wants to see the rate fall to 6.5 percent before it raises interest rates.
The data has been spotty enough that policymakers could want more consistency. Nonfarm payroll growth has averaged about 208,000 monthly over the past six months but has dipped below that level in some months. Chicago Fed President Charles Evans said he would like to see growth of 200,000 each month before cutting back on bond purchases, also referred to as quantitative easing.
Also far from target is inflation. The Personal Consumption Expenditures index, which is the measurement most watched by the Fed, was only at 1 percent in March. The April reading is due on May 31.
"They would be more comfortable with inflation at 2, 2.5 percent," said Wilmer Stith, co-manager of the Wilmington Broad Market Bond Fund in Baltimore.
With inflation hardly threatening, there are few price pressures to argue for ending the flood of easy money, and the data only goes to underscore the relative weakness of the economy, Stith noted.
THE NEXT FED CHAIR?
Bernanke hasn't officially bid adieu to the Fed, but he is clearly eyeballing the door. His second term ends in January, and there has been no official announcement about his future at the Fed.
"I don't think that I'm the only person in the world who can manage the exit (from quantitative easing)," he said earlier this year.
WITH OR WITHOUT BEN: JACKSON HOLE
Bernanke may be opening the way for possible successors by skipping the Jackson Hole gathering later this year due to an unspecified scheduling conflict.
While Fed Vice-Chair Janet Yellen is emerging as the favorite to hold the position next, Bernanke and company have so far been quiet.
The Fed honcho's absence could mean Jackson Hole offers little in the way of news, in which case, head to the beach and read that trashy novel you've been meaning to get through.
But maybe not.
Bernanke's absence on the schedule could open up a spot for an heir-apparent to take the spotlight instead.
If that is Yellen, "perhaps that is going to be the platform for her to gain even more recognition nationally," Stith said.
DEBT CEILING DEBATES - YES, THIS AGAIN
One thing investors and traders may not have to worry about is a debt ceiling crisis in Washington. The government probably won't breach its congressionally authorized borrowing limit until at least Labor Day.
The perfect bookend to summer, in other words.
Think again.
U.S. Federal Reserve Chairman Ben Bernanke made it clear in congressional testimony this week that the central bank could very well entertain a change in policy sooner than many had predicted. That would mean providing less stimulus to the economy by cutting back on its bond buying program.
The result was an unsettling bout of volatility, with Treasury yields jumping while stocks slid, as investors feared the Fed's support might start to recede.
And that means this could be a summer when investors may find the waves are not only on the beach.
While Fed-watchers are hard-pressed to see a turning point at the bank's June policy meeting, there are plenty of other spots this summer when the Fed could start to prepare markets for change.
Besides the June meeting, there is a policy meeting in July and the release of minutes from both those meetings that will follow. There are three Fridays where monthly jobs data will be released, and plenty of inflation readings and other, lesser economic datapoints.
And of course, there are other potential flashpoints. Will an heir to Bernanke emerge? Will the annual monetary policy symposium in Jackson Hole, Wyoming, this August matter without Ben Bernanke?
Here's what to watch for this summer on the Fed front.
FED MEETINGS AND MINUTES
Fed policymakers meet twice more before the Sept. 2 Labor Day holiday this year: June 18-19 and July 30-31. In addition, the minutes of those Federal Open Market Committee meetings will be released three weeks later.
The June meeting is likely "as good a target as any" for a signal from the Fed about their future plans, said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington, D.C.
The Fed doesn't want to startle investors, because that would be disruptive. Expect plenty of flags, through meeting statements and minutes, before policymakers make any movements.
DATA DELUGE: JOBS VS INFLATION
The Fed's dual mandate means that both jobs and inflation data will be key. Labor data has been more encouraging of late, with the unemployment rate down to 7.5 percent. The Fed has said it wants to see the rate fall to 6.5 percent before it raises interest rates.
The data has been spotty enough that policymakers could want more consistency. Nonfarm payroll growth has averaged about 208,000 monthly over the past six months but has dipped below that level in some months. Chicago Fed President Charles Evans said he would like to see growth of 200,000 each month before cutting back on bond purchases, also referred to as quantitative easing.
Also far from target is inflation. The Personal Consumption Expenditures index, which is the measurement most watched by the Fed, was only at 1 percent in March. The April reading is due on May 31.
"They would be more comfortable with inflation at 2, 2.5 percent," said Wilmer Stith, co-manager of the Wilmington Broad Market Bond Fund in Baltimore.
With inflation hardly threatening, there are few price pressures to argue for ending the flood of easy money, and the data only goes to underscore the relative weakness of the economy, Stith noted.
THE NEXT FED CHAIR?
Bernanke hasn't officially bid adieu to the Fed, but he is clearly eyeballing the door. His second term ends in January, and there has been no official announcement about his future at the Fed.
"I don't think that I'm the only person in the world who can manage the exit (from quantitative easing)," he said earlier this year.
WITH OR WITHOUT BEN: JACKSON HOLE
Bernanke may be opening the way for possible successors by skipping the Jackson Hole gathering later this year due to an unspecified scheduling conflict.
While Fed Vice-Chair Janet Yellen is emerging as the favorite to hold the position next, Bernanke and company have so far been quiet.
The Fed honcho's absence could mean Jackson Hole offers little in the way of news, in which case, head to the beach and read that trashy novel you've been meaning to get through.
But maybe not.
Bernanke's absence on the schedule could open up a spot for an heir-apparent to take the spotlight instead.
If that is Yellen, "perhaps that is going to be the platform for her to gain even more recognition nationally," Stith said.
DEBT CEILING DEBATES - YES, THIS AGAIN
One thing investors and traders may not have to worry about is a debt ceiling crisis in Washington. The government probably won't breach its congressionally authorized borrowing limit until at least Labor Day.
The perfect bookend to summer, in other words.
Schneiderman: More Proof Bank Of America And Wells Fargo Violated Mortgage Settlement
Schneiderman - who has said he plans to sue Bank of America and Wells Fargo for failing to live up to their obligations under the deal said other states had found similar problems.
"Several other states have identified similar recurring deficiencies by the participating servicers," Schneiderman said in a letter dated May 23 to the monitor for the settlement, former North Carolina Banking Commissioner Joseph Smith. The letter was obtained by Reuters on Friday.
The $25 billion settlement was brokered last year between five banks and 49 state attorneys general. The other banks are JPMorgan Chase & Co, Citigroup Inc, and Ally Financial Inc. The banks agreed to provide relief to homeowners and comply with a set of servicing standards to atone for foreclosure misconduct.
In his letter, Schneiderman did not identify which other states had provided evidence of banks failing to abide by the settlement. Nor did he identify the banks with recurring deficiencies.
He said receipt of his letter to Smith and a concurrent one to a monitoring committee would start the clock on a waiting period before lawsuits could be filed against the banks. The settlement authorizes the monitor to first work with a mortgage servicer to correct any potential violations and sue if the servicer does not fix the errors.
Schneiderman said on May 6 he planned to sue Bank of America and Wells Fargo after the waiting period was over, although he did not mention the possibility of a lawsuit in Thursday's letter.
At the time, Schneiderman said that, since last October, his office had documented 339 violations of standards - 210 by Wells Fargo and 129 by Bank of America dictating the timeline for banks to process mortgage modification applications.
In Thursday's letter, Schneiderman said the violations reveal the two banks "are engaging in much of the same misconduct that precipitated the National Mortgage Settlement."
Smith said in a statement Friday he would review the violations Schneiderman shared. He also said he will issue a report on the banks' compliance in June. "I intend to use the full breadth of my power under the settlement to hold the banks accountable," he said.
North Carolina Attorney General Roy Cooper, who is on the monitoring committee, said in a conference call on Tuesday that some banks have "fallen short" of complying with servicing standards. He did not name any banks.
In Thursday's letter, Schneiderman said there had been "inordinate delays" in reviewing loan modification applications at Wells Fargo, so applicants had to resubmit documents.
He cited evidence of piecemeal requests for additional documents in one modification application at Bank of America, and said more than three months passed without a request for more information or a decision on another application.
Bank of America has said it did not commit any violations, and that it has provided more relief under the settlement than any other servicer. Wells Fargo has said it was committed to abiding by the settlement.
Citibank said on Friday it remains committed to fulfilling the terms of the settlement. JPMorgan spokesman Tom Kelly declined to comment. Ally said its bankrupt mortgage subsidiary Residential Capital is responsible for the settlement. A spokesperson for ResCap could not immediately be reached for comment.
On Tuesday, Smith reported that the five banks in the settlement had distributed $50 billion in direct relief to over 620,000 homeowners as part of the settlement.
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