Aurelia Butler

As a member of parliament, new British Prime Minister Liz Truss introduced legislation to undo the Northern Ireland Protocol, which was part of Britain’s withdrawal agreement from the European Union. It prioritized protecting the 1998 Good Friday Agreement, or Belfast Agreement, for peace in the British-run region.”There is a no formal linkage on trade talks between the U.S. and the UK and the Northern Ireland protocol, as we have said, but efforts to undo the Northern Ireland protocol would not create a conducive environment,” Jean-Pierre said.On Tuesday, the White House said U.S. President Joe Biden and Truss “discussed their shared commitment to protecting the gains of the Belfast/Good Friday Agreement and the importance of reaching a negotiated agreement with the European Union on the Northern Ireland Protocol.”Biden, who often speaks with pride of his Irish roots, has been insistent that Britain do nothing that could endanger a quarter century of peace in Northern Ireland.The two leaders could meet as soon as the U.N. General Assembly later in September. Truss won a leadership race for the governing Conservative Party on Monday and took over from Boris Johnson as prime minister on Tuesday, as Britain faces its most daunting set of challenges in decades. More

Just as the yen’s eye-popping plunge against the dollar grabs the world’s financial market spotlight, investors will get a closer look on Thursday into the underlying state of the Japanese economy.Revised second quarter GDP data, and trade and current account figures for July, will give an insight into the yen’s economic fundamentals, and offer clues to whether the level and pace of the currency’s depreciation are justified.Economists expected Japan’s Q2 GDP growth to be revised up to an annualised 2.9% rate from 2.2%, and quarterly growth to be revised up to 0.7% from 0.5%. They also expect that the current account balance swung back into surplus in July.All things considered, Japanese officials seem pretty relaxed about the yen’s slump to a 24-year low through 144.00 per dollar. It has depreciated 20% so far this year, and 30% since the start of last year. Remarkable for a G3 currency.Plenty other Asian currencies are getting steamrolled by the Fed-pumped dollar. China’s yuan is at a two-year low near 7.00 per dollar, the Thai baht is close to July’s 16-year low, and India’s rupee is hovering near July’s all-time low.Broader market sentiment on Thursday will probably be brighter than most days lately following the decent rebound on Wall Street, pull back in U.S. bond yields and 5% slide in oil prices on Wednesday. On the corporate front, investors will scour full-year earnings from Hong Kong property developer Sun Hung Kai Properties to gauge the state of China’s bloated and creaking real estate market. Key developments that should provide more direction to markets on Thursday: Japan trade, current account (July)Japan GDP (Q2)Australia trade (July)Indonesia consumer confidence (Aug)ECB policy decision More

A leading Federal Reserve official has warned the US central bank must hold its nerve as it tries to tame soaring inflation, adding her name to the list of policymakers sounding a hawkish note on future rate rises. Lael Brainard, vice-chair of the Fed, reinforced expectations that the central bank would opt for a third consecutive 0.75 percentage point rate rise at its meeting later this month. “We are in this for as long as it takes to get inflation down,” she said. Brainard said the Fed had “both the capacity and responsibility” to maintain public confidence in its ability to keep inflation in check in the long run, adding higher rates that restrict the economy would be necessary “for some time”. The forceful intervention from Brainard, generally seen as a dove on monetary policy, comes as investors increased their bets on the Fed implementing another increase of 75 basis points when officials meet on September 21. Futures markets on Wednesday implied an 81 per cent chance that they will opt for an increase of that magnitude. Expectations of further large interest rate rises have propelled the dollar higher in recent months, contributing to downward pressure on other major currencies. A measure of the dollar against six other peers has jumped almost 15 per cent in 2022. Sterling has slumped by the same magnitude to hover near its weakest level since 1985. The widening gulf between the Fed’s tightening programme and the Bank of Japan’s ultra-loose monetary policy has driven the yen to its lowest level in 24 years.Brainard, who was speaking at a banking industry conference in New York, said the Fed’s recent rate rises had started to cool some sectors of the US economy. At some point, she said, the central bank would need to consider the risk of overshooting with monetary policy that was too tight. But she added that before the Fed contemplated easing off in its efforts to tame higher prices it would need to see “several months of low monthly inflation readings” and be confident that it was moving closer to its 2 per cent target. Brainard’s focus on inflation expectations underscored the Fed’s fear that persistently high inflation will result in a vicious cycle, with companies raising prices and workers demanding higher wages. That could force the central bank to take even more aggressive action and cause further economic pain. However, she said events in other countries might result in lower inflation in the US, with Europe confronting a weaker economy and a “severe energy shortage” while China extends its coronavirus lockdown measures. “The disinflationary process here at home should be reinforced by weaker demand and tightening in many other countries,” she said.Brainard said the US labour market continued to “exhibit considerable strength”, which she said was “hard to reconcile with [a] more downbeat tone of activity”.

Shortly after Brainard’s remarks, the Fed published its most recent Beige Book, an anecdotal assessment of regional economic conditions, which found evidence of a tight labour market across the country. Brainard is the latest Fed official to reinforce the hawkish message delivered by chair Jay Powell last month in Jackson Hole, Wyoming. Thomas Barkin, president of the Richmond Fed, this week told the Financial Times he had a “bias” towards tightening monetary policy quickly “as long as you don’t inadvertently break something”. Meanwhile, Michael Barr, the Fed’s vice-chair for supervision, said on Wednesday that the risk of letting inflation spiral higher was “far worse” than being too aggressive. Barr, who is one of the most senior banking regulators in the US, also said the Fed would “consider adjustments” to various banking rules, including stress tests, capital buffers and its system for assessing bank mergers. More