Action On Sweeping U.S. Immigration Reform Announced By Obama

U.S. President Barack Obama imposed the most sweeping immigration reform in a generation. By doing this, President Obama eased the threat of deportation for about 4.7 million undocumented immigrants and setting up a clash with Republicans.

Barack Obama

Obama, in a White House speech, rejected critics from the Republican party who remarked his decision to bypass Congress and take executive action is tantamount to amnesty for illegal immigrants. Obama urged Republican critics to pass comprehensive immigration reform legislation that the Republican-controlled House of Representatives has blocked.

“Today, our immigration system is broken, and everybody knows it,” Obama said. “It’s been this way for decades. And for decades we haven’t done much about it.”

The plan of Obama would let some 4.4 million who are parents of U.S. citizens and legal permanent residents remain in the United States on a temporarily basis, without the threat of deportation. There are about 11 million undocumented immigrants in the United States. The measure would apply to those who have been in the United States for at last five years.

In his speech, Obama said that the real amnesty would be “leaving this broken system the way it is.” Trying to deport all 11 million people living in the country illegally was not realistic, he added.

“What I’m describing is accountability, a common-sense, middle-ground approach,” he said. “If you meet the criteria, you can come out of the shadows and get right with the law. If you’re a criminal, you’ll be deported.”

Fresh Clashes Between Hong Kong Democracy Protestors And Police

On Tuesday, Hong Kong pro-democracy protesters clashed with police in the densely populated district of Mong Kok. These @Hong Kong protests marked tensions escalating at one of three remaining demonstration sites for the first time in more than two weeks.

APTOPIX Hong Kong Democracy Protest

Hundreds of protesters were swept by dozens of police armed with batons and shields. Led by a restive generation of students, the protestors are asking China’s Communist Party rulers to fulfill its constitutional promises to grant full democracy to the city which returned to Chinese rule in 1997. In August, the people of Hong Kong were offered a chance by Beijing to vote for their own leader in 2017 but China said only two to three candidates could run after getting backing from a 1,200-person “nominating committee” stacked with Beijing loyalists.

Pro-democracy activists are planning to march this Sunday from the heart of the city’s financial center to the Chinese central government’s liaison office in Hong Kong. Protestors have barricaded important roads leading into Hong Kong’s most economically and politically important districts with wood and steel. The 2014 Hong Kong protests are primarily concentrated in two key areas – the district of Admiralty next to government buildings and across the harbor in Mong Kok.

“The central government firmly supports the Hong Kong government to push ahead the city’s democratic development,” said Chinese Foreign Ministry spokesman Hong Lei. “We hope different parties in Hong Kong could discuss the matter reasonably, build consensus and implement the election based on the laws.” “The central government firmly supports the Hong Kong government to push ahead the city’s democratic development,” said spokesman Hong Lei. “We hope different parties in Hong Kong could discuss the matter reasonably, build consensus and implement the election based on the laws.”

U.S. Data Calm Investor Nerves

On Friday, Asian stocks clawed back some of the losses of this week after a robust set of U.S. data claimed turbulence in global financial markets. However, investors were kept on edge with underlying worries about slowing world economic growth.

U.S. Data Calm Investor Nerves

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS gained 0.2 percent but the Nikkei share average .N225 fell 0.5 percent to 4-1/2-month lows.

“We need to see a period of better data from the U.S., and especially Europe, for markets to really calm and volatility to cool,” said Chris Weston, chief market strategist at IG Markets in Melbourne.

“People still think the U.S. economy is on solid ground. But they don’t think it is strong enough to lead the global economy,” said Hiroshi Ono, the head of equity investment at Sumitomo Life.

On Monday, the Volatility index .VIX, which is viewed as a gauge of investor fears, eased to 25.2 percent from a 2 1/2 year high above 31 percent hit.

“I expect market volatility to gradually to come down. Loss-cutting trades will come to an end soon after a hectic week and markets will be looking to what kind of policy options major countries can adopt now,” said Makoto Noji, senior strategist at SMBC Nikko Securities.

On Wednesday, the U.S. dollar also recovered, with the dollar index stabilizing at 84.950 .DXY, off a three-week low of 84.472 hit. “It was largely a cool-down session, spiced up by solid U.S. data and a surprisingly dovish comment from Fed member Bullard,” analysts at CitiFx wrote in a note to clients.

Growing U.S. Pressure On China Over Hong Kong Protests

China is facing growing pressure from the United States to show restraint during mass pro-democracy protests in Hong Kong. The Hong Kong issue is also expected to be raised in high-level U.S.-Chinese talks.

hong kong protests

Secretary of State John Kerry would discuss the issue with Chinese Foreign Minister Wang Yi a day after the United States backed calls by thousands of Hong Kong for greater autonomy in selecting candidates for Hong Kong’s chief executive.

“I expect it will come up,” State Department spokeswoman Jen Psaki said to reporters, referring to the @Hong Kong protests. “It is in the news. It is an issue we are concerned about and focused on.” Psaki said he believes Kerry will ask that the legitimacy of the Hong Kong chief executive would be enhanced if people have a genuine choice of candidates.

 

The protesters have called on chief executive Leung Chun-ying to step down and are demanding full democracy. A month ago, Beijing ruled it would vet candidates wishing to run for the leadership of Hong Kong in 2014.

The chairman of the U.S. Senate’s Foreign Relations Committee, Senator Robert Menendez, accused Beijing of “reneging on the promises it made to the people of Hong Kong.”

“I write today to express my grave concerns over current events in Hong Kong,” in a toughly worded letter to Leung, Menendez said, urging Leung “to exercise your leadership to guarantee that your citizens, the people of Hong Kong, receive the full democratic rights and freedoms that they have been promised and which they deserve.”

Scots Spurn Independence

In a historic referendum, Scotland spurned independence in a huge for millions of Britons including Prime Minister David Cameron.

The referendum threatened to rip the United Kingdom apart and cause financial turmoil in Britain. A vote for the 307-year union was greeted by unionist who cheered, kissed, and drank wine at a party in Glasgow. Nationalist leader Alex Salmond conceded defeat in front of an image of a giant white on blue Scottish flag in Edinburgh.

Scots Spurn Independence

“Scotland has by a majority decided not, at this stage, to become an independent country. I accept that verdict of the people and I call on all of Scotland to follow suit in accepting the democratic verdict of the people of Scotland,” Salmond said. Salmond added British politicians in London must respect their last minute promise of more powers for Scotland. “Scotland will expect these to be honored in rapid course,” he said before walking off the stage.

“We have chosen unity over division, and positive change rather than needless separation,” Alistair Darling, head of the “Better Together” campaign and a former British finance minister.

Scots were asked to answer “Yes” or “No” to the question: “Should Scotland be an independent country?” Voters lined up at polling stations to vote with 4.28 million voters, or 97 percent of the electorate, registered to vote.

The prospect of breaking up the world’s sixth-largest economy had stoked concern in the United States and Europe. Washington made clear it wanted the United Kingdom, its main ally in Europe, to remain together.

“The risk of huge disruption from Scottish independence is gone. Not for good, given the still high support for a No in the polls, but for a considerable time,” said Robert Wood, economist at Berenberg Bank. “For now markets can return to normal.”

Caixabank To Buy Spain’s Barclays Retail And Corporate Bank Units

Caixabank will buy the Spanish retail and corporate banking operations of Barclays. Caixabank, Spain’s third-biggest lender and one of the most acquisitive banks during the recent financial crisis would be paying 800 million euros ($1.05 billion) for the Barclays businesses.

Caixabank barclays

This deal also includes wealth management and marks one of the first big steps in the bid of Barclays to exit most of its European retail banking businesses. This move is made after Chief Executive Antony Jenkins embarked on a turnaround plan to try and lift profitability.

In the next three years, Barclays will make thousands of job cuts as part of the restructuring. Barclays recently remarked it wants to refocus on its British and African businesses, credit cards, and investment banking in Britain and the United States. “We remain on track to rebalance Barclays,” Jenkins said in a statement on the sale.

It said Barclays will make a loss after tax on the sale of about 500 million pounds, with 400 million pounds of that to be reported in the 3rd quarter of 2014 and the rest on completion of the deal.

Earlier this year, Barclays parked its retail banking operations in Spain, Italy, France and Portugal in a “bad bank” so they could be sold, separated or floated. Caixabank will be taking on a 270 branch network and nearly 2,400 from Barclays, as well as 550,000 retail and private banking clients. Caixabank said the announced price was set on a value of the whole business of 1.7 billion euros as a whole.

New Zealand Dollar Sinks, China PMI Lifts Aussie

The New Zealand dollar skidded to a low of six weeks on July 24 after central bank of the country decided to follow a wait-and-see stance following its fourth straight rate hike. On the other hand, the Australian dollar rose after a survey showed the factory sector of China expanded at its fastest pace in 18 months.

New Zealand dollar

The kiwi dollar dropped nearly a full U.S. cent to touch levels not seen since June 12. The Australian dollar, which is often used as a proxy for the economic performance of China, touched a high of three weeks of $0.9480 and last traded at $0.9463.

In July, the HSBC/Markit Flash China Manufacturing Purchasing Managers’ Index rose to 52.0 that is its highest since January 2013.

“Long positions in the pound and antipodean currencies were unwound at the height of concerns towards tensions in the Ukraine, but such moves are winding down with the market now more immune to geopolitical risk,” said Kyosuke Suzuki, director of forex at Societe Generale in Tokyo.

“Under such conditions participants are opting again for the pound, Aussie and dollar, which could benefit from the next round of economic indicators. This leaves the euro as the sole bear currency,” he said.

The Reserve Bank of New Zealand (RBNZ) raised its cash rate by 25 basis points to 3.5 percent early and remarked the economy appeared to be responding to higher rates as intended.

“Perhaps the main surprise was the language regarding the high NZD exchange rate. ‘There is potential for a significant fall’ opens to interpretation as a veiled intervention threat,” said Imre Speizer, senior strategist at Westpac in Auckland.

Dow And S&P At Record Levels

On last Thursday, the holiday-shortened session of Wall Street ended with multiple records with the Dow Jones Industrial Average topping 17,000 for the first time after the June jobs report came in much stronger than expected. The Dow and S&P 500 ended at their third consecutive record highs.

Since 2000, the Nasdaq closed at its highest and rose for a third straight week. Regular trading ended at 1 p.m. on the day before the Independence Day holiday, when the U.S. stock market will be closed.

Dow And S&P At Record Levels

The U.S. economy added 288,000 jobs in June, racing past the 212,000 that economists had expected.

“The report was very good and a real sign the economy is starting to take off,” said David Kelly, chief global strategist at J.P. Morgan Funds in New York, which has about $450 billion in assets under management. “That said, it isn’t an unmixed positive for the market because it suggests the Fed will consider raising rates in the first quarter.”

The Dow Jones industrial average .DJI rose 92.02 points or 0.54 percent, to 17,068.26. The S&P 500 .SPX gained 10.82 points or 0.55 percent, to 1,985.44. The Nasdaq Composite .IXIC added 28.19 points or 0.63 percent, to 4,485.93.

The Dow Jones Transportation Average .DJT closed at a record 8,294.74, after hitting an intraday all-time high at 8,298.17.

Google Executives Visit Cuba For Promoting Open Internet

A team of top Google executives visited Cuba to promote open Internet access. This team led by Executive Chairman Eric Schmidt had a meeting with Cuban officials as well as independent people in the technology and digital field.

Executive Chairman Eric Schmidt

According to a report on the independent news website 14ymedio.com, Google is on an official two-day visit “to promote the virtues of a free and open Internet.” The website was started last month by blogger Yoani Sanchez. Sanchez said Schmidt was accompanied by Jared Cohen, director of Google Ideas, as well as two other staff. Sanchez started Cuba’s first independent online newspaper in May but the site has been repeatedly blocked in Cuba.

Google’s Executive Chairman appeared to confirm the report when he retweeted a message on Twitter posted by Sanchez. However, no official statement about presence of the executives in Cuba was made by Google or the Cuban government.

Cuba does not allow open Internet access and only 2.6 million out of a population of 11.2 million have Internet access, almost entirely limited to government-run centers, foreign companies, and tourist hotels.

According to its website, Google Ideas describes itself as “a think/do tank that explores how technology can enable people to confront threats in the face of conflict, instability or repression.”

Dollar Underpinned By Data On Inflation

On Wednesday, the U.S. dollar held onto modest gains following its broad strengthening. This was after U.S. consumer prices had their largest increase in more than a year in May to spark speculations that the Federal Reserve may inch closer to rate hikes.

dollar share market

The greenback reached a one-week high of 102.245, while the euro retreated from a one-week peak hit on Tuesday to $1.3547. The U.S. consumer price index rose 0.4 percent, double what economists had expected that increased the risk that a separate inflation gauge watched by the Federal Reserve also pushed higher in May.

“Almost all measures of U.S. price pressure are rising, and the CPI shows the clear upswing,” said Emma Lawson, senior currency strategist at National Australia Bank in Sydney.

“With the U.S. labor market improving, and the Fed’s other mandate being stable prices, these type of inflation pick-ups will make it difficult for the Fed to ignore,” she said.

“Our economics team expects the Fed will, in fact, deliver a more hawkish message,” analysts at BNP Paribas wrote in a note to clients.

“The statement is likely to upgrade views on inflation and the labor market and the projections of future Fed funds rates are likely to show a creep higher relative to those presented in March,” they said.

The pound stood flat at $1.6962, off a five-year high of $1.7011 hit on Monday.