Aurelia Butler

WASHINGTON (Reuters) -U.S. House Speaker Kevin McCarthy faces a revolt from hardline Republicans who accuse him of betraying an agreement that got him elected to lead the chamber, raising questions about the job security of the top Republican in Congress.About a dozen hardliners derailed a Republican effort in the House of Representatives on Tuesday to block new environmental regulations on household gas stoves, joining with Democrats to kill the measure in the Republican-controlled chamber.The House was expected to try again on Wednesday, with a procedural vote scheduled for 12:20 p.m. EDT (1620 GMT). McCarthy said he hoped it would succeed after what he described as a “productive” discussion with the conservatives. “We’ll see,” he told reporters on Wednesday morning. The hardliners’ vowed on Tuesday to use “procedural tools” on other votes unless McCarthy agreed to their terms raised questions about whether the House would be able to proceed with other legislation.Those hardliners were among the House Republicans who opposed McCarthy’s election as speaker in January until he agreed to concessions that make it easy to challenge his leadership.They were also among the 71 Republicans who opposed the compromise debt ceiling legislation passed last week. They maintain that McCarthy and his leadership team failed to deliver on promised spending cuts, ignored their input and retaliated against one of their members. “What we plan to do is to be ready at all points in time, acting in good faith, to re-forge the unity that was destroyed last week,” said Representative Dan Bishop, one of the hardliners.Bishop and other conservatives joined with Democrats in a 220-206 vote that prevented the Republican-led chamber from debating and passing two bills to prevent federal regulations on gas stoves. Some state and local governments have turned to such regulations as a way of addressing global warming. The protest raised questions about whether the House would be able to proceed with other legislation, including a measure to increase congressional scrutiny of regulations and expand the scope of judicial review of federal agencies. McCarthy and his allies met with the group on Tuesday night to try to resolve their differences. “This is not about lecturing Republicans about what it means to be Republican. It’s about how we work together on a daily, weekly basis,” Representative Patrick McHenry, a McCarthy ally, told reporters.McCarthy oversees a narrow House Republican majority of 222-213, meaning that he can lose only four votes from his own party on any measure that faces uniform opposition from Democrats.McCarthy endured 15 floor votes in January until he finally won the vote for speaker, agreeing to a set of demands that the hardliners now say he violated to pass the debt ceiling bill. The agreement allows a single lawmaker to seek his removal through a floor vote.Hardliners said they would not pursue that route for now.”Let’s sit down at the table and let’s figure out how we’re going to make decisions for the Republican conference going forward. Is it going to be through consensus, or is it going to be by fiat?” said Republican Representative Chip Roy. More

A $1tn US government borrowing spree is set to increase the strain on the country’s banking system, as the Treasury department seeks to rebuild its cash balance in the aftermath of the debt ceiling fight. The debt ceiling stand-off between the Biden administration and Republicans in Congress, which was resolved last week, prevented the government from increasing its borrowing. The Treasury will now seek to rebuild its cash balance, which last week hit its lowest level since 2017.But economists warn that the scale of short-dated Treasury bills the US government plans to issue before the end of the year — estimated at $1.1tn by JPMorgan — will push up the yields on government debt and suck cash out of the banking system.“Everyone knows the flood is coming,” said Gennadiy Goldberg, a strategist at TD Securities. “Yields will move higher because of this flood. Treasury bills will cheapen further. And that will put pressure on banks.”Yields had already begun to rise in anticipation of the increased supply, putting pressure on bank deposits which have fallen this year as the rise in interest rates and the failure of regional lenders have sent customers seeking higher-yielding alternatives. Here’s what else I’m keeping tabs on today:Economic data: The Commerce Department is expected to report the US trade deficit widened to $75.2bn in April from a $64.2bn deficit the month before.Monetary policy: The Bank of Canada announces its latest interest rate decision.Results: Consumer goods group Campbell Soup Co reports results.Five more top stories1. The OECD predicts growth in the global economy will slow this year compared with last year in its latest outlook released today. Read an interview with the OECD’s chief economist Clare Lombardelli, who calls on governments to get their finances in better shape. Chinese economy: Exports contracted more than expected last month on weaker global demand for the country’s goods.Eurozone economy: Economists expect official growth figures to be downgraded to show output slightly contracted for the past two quarters.2. Antony Blinken will travel to China this month, in the latest sign that the turbulent relationship between Beijing and Washington is beginning to stabilise. The US secretary of state had abruptly cancelled a trip in February in response to a suspected Chinese spy balloon’s flight over the US. Read the full story. 3. Evacuations and rescue operations continued in southern Ukraine after the destruction of the Kakhovka Dam. In his nightly video Volodymyr Zelenskyy repeated his belief that Russian forces occupying the dam had deliberately blown it up from inside. Read more on the evacuation of residents.4. The Securities and Exchange Commission followed up its charges against Binance and its chief executive Changpeng Zhao with a lawsuit against the cryptocurrency exchange Coinbase. The twin cases mark the SEC’s most aggressive legal assault on the digital assets market yet. 5. Saudi Arabia-backed LIV Golf and the US-based PGA tour announced a stunning merger yesterday, marking the end of a feud that has deeply divided men’s professional golf. The head of Saudi Arabia’s sovereign wealth fund and PGA Tour commissioner Jay Manahan explained to the Financial Times how the unlikely deal was brokered.Related: Saudi Arabia has carefully positioned itself as a linchpin in an emerging new world order, argues Kim Ghattas. The Big Read

A damaging profile of CNN’s chief executive Chris Licht published in the Atlantic magazine on Friday went off like a bombshell in the US media industry. It depicted Licht as thin-skinned, isolated and struggling to find a strategy to reverse CNN’s sharp ratings decline. It also hastened the arrival of David Leavy, the struggling network’s incoming chief operating officer. We’re also reading . . . An ‘Asian century’?: What is really happening is the rebalancing of the world as European and American hegemony dwindles away, writes Martin Wolf. ‘We’re taking a militant approach’: President of the Teamsters union Sean O’Brien is preparing to negotiate between delivery service UPS and its 340,000 US-based drivers and is threatening strike action if an agreement is not reached.US ‘war on woke’: An insurance sector green alliance has disintegrated in the face of an American backlash, emphasising the need for climate collaborations to adapt, writes Helen Thomas. Chart of the dayBig money managers including State Street, Fidelity, Amundi and mutual funds had all cut positions in Nvidia earlier this year, missing out on the eye-watering rally that recently pushed its valuation to $1tn. They’ve spent the past two weeks catching up, racing to amass shares of the US company that has become a go-to bet on artificial intelligence. Take a break from the news

Additional contributions by Tee Zhuo and Benjamin Wilhelm More

1. Traders react to SEC’s crypto crackdownThe price of the world’s top cryptocurrency Bitcoin surged by more than 4% on Wednesday, recovering from some losses in the prior session, as traders digested the impact of two lawsuits brought by U.S. regulators against leading crypto exchanges Coinbase Global (NASDAQ:COIN) and Binance.Meanwhile, shares in Coinbase edged higher in premarket trading, rebounding slightly from a sharp decline on Tuesday after the Securities and Exchange Commission sued the firm over operating an unlicensed exchange. The dip added on to steep losses seen on Monday that were sparked by similar charges brought by the SEC against rival Binance.Despite the crackdown, Cathie Wood’s Ark Invest has increased its stake in Coinbase, according to data from the website Cathie’s Ark, which tracks the Ark group’s investment activities. Wood’s flagship ARK Innovation ETF (NYSE:ARKK) carried out most of the buying, tacking on more than 300,000 shares.Wood has repeatedly backed Coinbase and the broader crypto industry, arguing that Bitcoin could prove to be an effective inflation hedge.2. Chinese exports dropChinese exports contracted by more than expected in May, in a fresh sign of the headwinds facing the country’s recovery after the lifting of harsh COVID-19 restrictions.Exports declined by 7.5% during the month from the same period last year, data from the Customs Administration showed on Wednesday, as the world’s second-biggest economy was hit by weak overseas demand for its locally produced goods.The reading had risen for the past three months as local manufacturers raced to meet pending orders after the anti-COVID rules were relaxed. But with that backlog cleared, Chinese firms are facing a dearth of new orders.Imports also dropped by 4.5%, although this fall was less than estimates and slower than the 7.9% dip in April.Factoring in both the export and import figures, China’s trade surplus unexpectedly slipped to a one-year low in May.3. OECD lifts annual growth outlook, but headwinds remainThe global economy is now expected to grow at a marginally faster pace than previously anticipated in 2023, according to a new forecast on Wednesday from the Organization for Economic Co-operation and Development.The Paris-based organization noted that lower energy prices are easing the strain on household budgets, while business and consumer sentiment are also improving. The re-opening of China has also helped to boost global activity.As a result, in the OECD’s latest economic outlook, the group predicted that the world’s gross domestic product will expand by 2.7% this year, up slightly from its previous projection of 2.6%. However, when not including the pandemic-hit year of 2020, this would still be the lowest yearly rate since the 2008-2009 financial crisis, the OECD noted. Meanwhile, growth is seen speeding up to 2.9% next year — an unchanged level from the OECD’s March predictions. During that time, the OECD expects a recent spate of central bank interest rises aimed at corralling inflation to gradually weigh more on private investment.The OECD’s announcement comes after the World Bank also raised its 2023 global growth outlook on Tuesday, but flagged that tight monetary policy and the war in Ukraine are threatening the wider economy. It also slashed its 2024 forecast to 2.4% from a previous outlook of 2.7%.4. Futures point lowerU.S. stock futures edged marginally into the red on Wednesday, but kept largely near the flatline, after the main indices rose in the prior session as traders looked ahead to the Federal Reserve’s all-important interest rate decision next week.At 04:22 ET (08:22 GMT), the Dow futures contract had lost 62 points or 0.18%, S&P 500 futures dipped by 7 points or 0.16%, and Nasdaq 100 futures shed 43 points or 0.29%.Strength in financial and consumer discretionary stocks helped boost gains on Wall Street on Tuesday, with the Dow Jones Industrial Average and S&P 500 both closing higher.The tech-heavy Nasdaq Composite also ended at its best close so far this year despite renewed concerns over the cryptocurrency industry following the SEC’s complaints against Coinbase and Binance.5. Oil volatile amid China recovery worriesOil prices were choppy on Wednesday after the weaker-than-anticipated Chinese trade data exacerbated fears over a possible slowdown in the country’s nascent post-pandemic recovery and undermined hopes that the world’s biggest oil importer would be at the forefront of a surge in demand this year.Meanwhile, industry data late on Tuesday showed that crude inventories in top oil consumer the U.S. shrank by more than expected last week. However, a build in gasoline stocks in the middle of the key U.S. summer driving season weighed on sentiment.By 04:42 ET, U.S. crude futures traded roughly unchanged at $71.74 per barrel, while the Brent contract also oscillated around the flatline at $76.28 a barrel. More