Urban mining: Hidden riches in our cities
Cities hold tons of materials that can be reused — and doing so can address over-exploitation of scarce natural resources. From buildings to electronic waste, we are surrounded by value. So how does urban mining work?
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Microplastic menace has spread to the world’s most remote oceans
New data collected in a round-the-world boat race has shown microplastics are in more of our planet’s oceans than previously thought. What can we do to stop their spread?
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Can free public transport really reduce pollution?
Germany is reportedly mulling plans for fare-free public transport. But to reduce pollution, it might be better off investing in improved services and penalizing car use, expert Oded Cats explains.
Under pressure from the European Union to tackle its air deadly air pollution, the German government is considering making public transport free in its most polluted cities. Few cities have attempted such a scheme — with the notable exception of Tallinn. We asked transport expert Oded Cats, who authored an in-depth study on Tallinn’s fare-free scheme, whether Germany can reduce pollution by emulating the Estonian capital.
DW: Why did Tallinn introduce fare-free transport – and was it effective?
Oded Cats: The aims were to promote public transport, to reduce car traffic, and especially to improve mobility for low income and unemployed groups. The latter, I think, we can consider has been achieved. So we do see that a lot of people from low income groups, the unemployed, do travel more frequently.
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Likelihood of hard Bexit recedes after UK election – Reuters pool of economists
By Jonathan Cable
LONDON (Reuters) – The chances of Britain ending up outside the single market when Brexit talks are concluded have receded somewhat after last week’s election, although the pound might weaken further against other currencies, a Reuters poll of economists found.
Ahead of the election, Prime Minister Theresa May had been expected to win a landslide victory – an outcome Reuters polls had predicted would be best for both sterling and Brexit talks – but as voting day approached those opinion polls narrowed.
In the end, May’s Tory party failed to win a majority in parliament, prompting calls for her plan to leave the EU’s single market to be watered down and leading some rival lawmakers to demand the Brexit process be delayed.
Droves of newly registered young voters – many of whom voted to stay in the EU – backed the opposition Labour Party, scuppering May’s hopes of a walkover win.
Around two-thirds of the economists polled this week, 33 out of 49, said the chance of a hard Brexit had receded somewhat. Three said it had receded significantly, while eight said there was no change. Five said it had increased somewhat and none said increased significantly.
“The prime minister may have to change her stance and approach to Brexit following the election outcome,” said Nikesh Sawjani at Lloyds Banking Group.
May has two years to reach agreement with the European Union but has repeatedly said she would be prepared to walk away from negotiations without a deal if necessary. But she now might find that more difficult to do.
“The reduced majority of the Conservatives means that the mandate for a hard Brexit just isn’t there anymore,” said George Brown at the CBI.
Concern over immigration from other EU member states was a major reason behind the vote to leave, and May has said she will respect those fears by halting freedom of movement.
That would almost certainly mean no free access for British companies to the EU’s huge single market, likely damaging what already threatens to be weak economic growth.
Almost half of British employers are unprepared for the government’s planned changes to immigration rules after Brexit, a survey from the Resolution Foundation think tank showed on Monday.
Another survey found British business confidence has fallen sharply since the election, while figures showed consumers cut their spending for the first time in nearly four years last month as households turned more cautious.
Having fallen as much as 23 percent after the referendum nearly a year ago, touching a 31-year low below $1.15, in October, sterling <GBP=> is currently trading around $1.266.
On Friday, the pound sank to a two-month low and 26 of 50 respondents said it was likely to fall more in the next few months. Fifteen said there would be no change and nine predicted sterling would recoup some of its losses.
“With markets unduly optimistic about the prospect of a Tory-led coalition, sterling is vulnerable to a further sell-off,” said Joanna Davies at Fathom.
Medians in a Reuters poll of 60 specialists, taken before the election, predicted the pound will be at $1.28 in one month, $1.27 in six and then at $1.28 in a year.
For a graphic: http://reut.rs/2skPI4e
(Polling by Rahul Karunakar, Kailash Bathija and Hari Kishan; Editing by Hugh Lawson)
Germany’s Merkel lends support to Mexico over NAFTA
By Dave Graham and Andreas Rinke
MEXICO CITY (Reuters) – Germany’s Chancellor Angela Merkel on Friday backed Mexico to press for a successful renegotiation of the North American Free Trade Agreement with Donald Trump, thanking its government for keeping German interests in mind during the talks.
Germany and Mexico have pursued policies tailored toward exporting manufactured goods, and both ran trade surpluses of more than $60 billion with the United States last year.
Many of the biggest names in German manufacturing have factories in both Mexico and the United States, including carmakers such as Volkswagen, BMW and Daimler.
However, tension over trade has surfaced under U.S. President Trump and his “America First” policy.
Claiming that their gains have come at the expense of U.S. manufacturers, Trump has repeatedly attacked Germany and Mexico over their trade surpluses. And he has vowed to withdraw from NAFTA if he cannot renegotiate it in favour of the United States.
Speaking on a visit to Mexico just a few weeks after her foreign minister visited the country and backed its pro-NAFTA stance, Merkel said she was pleased the deal’s signatories, the United States, Mexico and Canada, were talking about an update.
“I hope these talks are a big success,” she said at a news conference alongside President Enrique Pena Nieto in Mexico City. “And I’d like to offer thanks that the interests of German companies are also being taken into consideration.”
Mexico and Germany reject Trump’s hostility to NAFTA and say flourishing trade has brought benefits to all.
Formal talks between the United States, Canada and Mexico to start renegotiating the accord that took effect in 1994 are expected to begin from around mid-August.
Merkel also welcomed the fact that sectors like energy could be included in the NAFTA revamp, after Mexico opened up its oil and gas market to private investment at the end of 2013, ending a longstanding state monopoly on production and exploration.
Still, unruly parts of Mexico where organised crime holds sway have rattled some investors, and gang violence has recently been on the increase again.
Merkel said Mexico faces big challenges from organised crime, adding that Germany was willing and able to help in that fight. She said Europe, like Mexico, was also suffering from problems linked to violence like terrorism.
Merkel also said she hoped for a speedy conclusion this year to talks between Mexico and the EU to update a free trade accord.
(Editing by Clarence Fernandez)
If Britain limited EU immigration, this would have its price – Merkel
BERLIN (Reuters) – Britain would have to pay a price if it put limits on the free movement of European Union citizens after its departure from the bloc, German Chancellor Angela Merkel told trade unionists on Wednesday.
“If the British government ends the free movement of people, that will have its price,” she said at a G20 trade union event in Berlin.
“That’s not malice,” she said. “But I cannot have all the good sides and then say there will be an upper limit of 100,000 or 200,000 EU citizens, no more, or just researchers, but please nobody else. This will not work.”
In such a scenario, the remaining 27 EU members would then have to think about what additional obstacles to throw up in order to compensate, Merkel said.
(Reporting by Michael Nienaber, Editing by Thomas Escritt)
Israeli fire kills three in Syria at pro-government military base – militia, monitor
BEIRUT (Reuters) – An Israeli attack against a military base for the Syrian pro-government National Defence Forces in southern Syria killed three NDF members on Sunday, the NDF militia and a monitoring group said.
The Syrian Observatory for Human Rights, a Britain-based war monitoring group, said it remained unclear if the source of the bombardment in Quneitra province was an air strike or shelling.
Israel has carried out air strikes or fired mortar rounds during the six-year war in Syria, often in response to the occasional spillover, including stray shells from fighting among Syrian factions.
The Israeli military declined to comment on the reports. The Syrian army could not immediately be reached for comment.
The NDF said the attack struck its military camp in the countryside of Quneitra, which sits near the Israeli-occupied Golan Heights, territory that Israel captured from Syria in a 1967 war.
Rebel groups fighting President Bashar al-Assad’s government in the Syrian conflict hold swathes of Quneitra, while the army and pro-government forces control another part of the province.
(Reporting by Ellen Francis in Beirut and Omar Fahmy in Cairo, additional reporting by Jeffrey Heller in Jerusalem. Editing by Jane Merriman)
Macron clings on to lead in tense French election race
By Sarah White and Sudip Kar-Gupta
PARIS (Reuters) – Centrist Emmanuel Macron held on to his lead as favourite to win France’s presidential election, a closely-watched poll showed on Wednesday, although it showed that the first round of voting at the weekend remains too close to call.
Four candidates are still in contention to make it to a second round two weeks after Sunday’s ballot. The first round could bring last minute surprises given that the predicted abstention rate and the degree of indecision are high.
France’s tumultuous election campaign, marked by surprising outcomes in the two main party primaries, the relegation of early frontrunners for the presidency, and the rise of Macron’s independent political movement, has become increasingly tense as the gap between candidates shrinks.
The stakes for investors are high, with two anti-EU, anti euro candidates among the four.
Macron and far-right leader Marine Le Pen have lost steam in the run-up to Sunday’s vote, but are still expected to qualify for the May 7 run-off, with the centrist winning that second round, according to a Cevipof poll of 11,601 people for Le Monde newspaper.
The poll is one of the most comprehensive surveys among a mass of competing ones released on a daily basis.
Le Pen, who has been pressing home her core message on stopping immigration in the past week, dropped by 2.5 percentage points to 22.5 percent of voting intentions compared with early April, and Macron fell 2 percentage points to 23 percent in the first round, Cevipof said.
Far-left firebrand Jean-Luc Melenchon, who has surged in recent weeks, was on 19 percent, the poll showed, while conservative leader Francois Fillon, recovering from a nepotism scandal, was on 19.5 percent.
Abstention, a key factor adding to uncertainty over the outcome of the first round, was seen coming at 28 percent, Cevipof said.
All of the Cevipof findings were broadly in line with recent polling trends that show the race very tight.
The abstention rate was in line with a record level in the 2002 election, where the then National Front leader – Le Pen’s father Jean-Marie Le Pen – made it to the run-off before he was beaten by conservative Jacques Chirac.
Security concerns have come to the fore after two men were arrested in Marseille on Tuesday, suspected of planning an imminent attack aimed at the presidential campaign.
FILLON’S PHOTO IN ATTACKERS’ VIDEO
The Paris prosecutor said on Tuesday that a video linked to the two Frenchmen and intercepted in early April had featured a machine gun placed on a table as well as a newspaper which had one of the presidential candidates on the front page.
A source close to the investigation said on Wednesday that the candidate featured on the newspaper cutting was Fillon.
France’s internal intelligence agency had warned the main candidates of a threat, campaign officials said.
Le Pen said in a radio interview on Wednesday that her team had also been warned of a threat and that her security entourage had been given photos of the suspects.
“We were warned of the risks, as were the other presidential candidates, who were given pictures of these individuals as of Thursday night so that our respective security services could be more prudent,” Le Pen told France Bleu Gard Lozere.
(Refiles to remove extraneous word in first paragraph)
(Reporting by Sarah White, Emmanuel Jarry; Editing by Andrew Callus)
UK economy probably slowing after strong end to 2016 – PMI
By Andy Bruce
LONDON, (Reuters) – Britain’s economy has probably slowed from its strong growth of late last year and a cooling jobs market and hefty price increases will become increasingly apparent as Brexit gets underway, according to a survey published on Wednesday.
The Markit/CIPS Services Purchasing Managers’ Index (PMI), a closely watched gauge of Britain’s services industry, rose to a three-month high of 55.0 in March from 53.3 in February.
That topped all forecasts in a Reuters poll of economists, whose median forecast was for a reading of 53.5.
But some warning signals were flashing as the British government began the two-year process of leaving the European Union.
Services companies raised their selling prices at the fastest pace since 2008, a sign that inflation may rise more than the 3 percent expected by many forecasters this year.
Businesses hired people at the slowest pace in seven months.
Taken together, the PMIs for manufacturing, construction and services published this week suggest economic growth will slow to around 0.4 percent in the first quarter from 0.7 percent in the fourth quarter of 2016, data firm IHS Markit said.
Growth of 0.4 percent would be in line with the most recent Reuters poll of economists but slower than the 0.6 percent predicted by the Bank of England.
The BoE is widely expected to keep interest rates at their record low throughout this year and possibly until 2019 as it steers the British economy through the uncertainty linked to the exit from the EU.
However, one rate-setter voted last month for a rate increase and others said they might follow suit soon if there were signs that economy was maintaining its momentum of 2016.
Despite the stronger-than-expected headline growth figure in Wednesday’s PMI, the survey also suggested consumers were cutting back on luxuries. Hotels and restaurants, gyms and hairdressers ranked among the worst-performing services in the first three months of 2017.
“Much of the disappointment in growth so far this year has been evident in consumer-oriented sectors, in part linked to spending and incomes being squeezed by higher prices,” said Chris Williamson, chief business economist at IHS Markit.
Official data last week showed real household disposable income – a measure of spending power in the fourth quarter of 2016 – saw its biggest quarter-on-quarter decline in nearly three years.
Nearly half of British households plan to cut spending as worries about inflation escalate, according to a separate survey on Wednesday from pension provider Scottish Friendly and the think tank Social Market Foundation.
The all-sector PMI, covering manufacturing, construction and services, rose a full point to 54.7 in March.
Detailed PMI data are only available under licence from Markit and customers need to apply to Markit for a licence.
(Editing by William Schomberg, Larry King)
EU top court upholds sanctions against Russia’s Rosneft
By Julia Fioretti
LUXEMBOURG (Reuters) – Europe’s top court on Tuesday upheld European Union sanctions on Russia over the Ukraine conflict, including on its largest oil group Rosneft <ROSN.MM>, in a ruling that asserts the court’s jurisdiction over the bloc’s foreign policy.
The EU slapped sanctions on Russia after it annexed Crimea from Ukraine in 2014 and stepped them up as Moscow went on to support a separatist rebellion in Ukraine’s industrial east.
The European Court of Justice (ECJ) said “restrictive measures … in response to the crisis in Ukraine against certain Russian undertakings, including Rosneft, are valid.”
With the ruling, the ECJ established its jurisdiction to rule on matters of the EU’s common foreign and security policy, an area of fierce contention between Brussels and national governments seeking to maintain sovereignty.
A lawyer for Rosneft told reporters he was disappointed with the outcome.
“I would also say it is a setback for judicial protection in the EU in the area of sanctions because the court accepts (…) the fact that a company is partially state-owned is sufficient for it to be a target of sanctions,” Lode van den Hende said.
The court said it believed encroaching on Rosneft’s right to do business was in proportion with the severity of sanctions imposed on Russia over the Ukraine crisis.
“The Court holds that the importance of the objectives pursued by the contested acts is such as to justify certain operators being adversely affected,” it said in its judgement.
(Reporting by Julia Fioretti; Writing by Robert-Jan Bartunek; Editing by Alissa de Carbonnel and Mark Potter)
Police arrest two more over British parliament attack
LONDON (Reuters) – British police said they had made two further significant arrests in the investigation into the attack on London’s parliament and gave the birth name of the man behind the assault as Adrian Russell Ajao.
Britain’s top anti-terrorism officer, Mark Rowley, said police had nine people in custody after the attack on Wednesday which killed five people including the assailant.
Police had said the man behind the attack was British-born Muslim covert Khalid Masood, who used several aliases, and that they were trying to establish if others had directed him.
“Our investigation focuses on understanding his motivation, his operation and his associates,” Rowley said.
“Whilst there is still no evidence of further threats, you’ll understand our determination is to find out if either he acted totally alone, inspired perhaps by terrorist propaganda, or if others have encouraged, supported or directed him.
Rowley said police had made two further “significant” arrests overnight, one in the West Midlands and one in the north west of the country.
“We now have nine people remaining in custody, and one woman has been released on bail,” he said.
Rowley said the attacker, who ploughed down pedestrians when he sped across Westminster Bridge before fatally stabbing an unarmed policeman, had injured at least 50 people in total. Two are still in a critical condition, and one person is considered to have life-threatening injuries.
(Reporting by Kate Holton and David Milliken; editing by Guy Faulconbridge)
German police end operation over attack threat in southwest town
BERLIN (Reuters) – German police said on Sunday they had ended a major operation launched after they received information about a possible threat of an attack in the south-western town of Offenburg on Saturday night.
Officers stepped up security in the town centre and on public transport and police said one possible target was a night club which was not named. Investigations were continuing but no further details on the nature of the threat were available.
A spokesman in Offenburg, in the state of Baden-Wuerttemberg and close to the French border, did not give any further details.
Germany is on high alert following deadly militant Islamist attacks in France and Belgium and after a failed asylum seeker from Tunisia drove a truck into a Berlin Christmas market in December, killing 12 people.
On Saturday, police in the city of Essen closed a shopping mall after security services warned of a possible attack.
(Writing by Madeline Chambers; Editing by Mark Potter)
Exclusive – Airbus may ditch A380’s grand staircase as sales tumble
By Tim Hepher
(Reuters) – Airbus <AIR.PA> is considering doing away with one of the hallmarks of its A380 superjumbo, a “grand staircase” echoing the era of cruise ships, as it looks to revive sales of the world’s largest airliner, industry sources said.
The idea of a slimmed down staircase, as well as adding fuel-saving wingtips, is aimed at lowering the huge double-decker’s operating costs and boosting its fuel efficiency.
The provisionally dubbed A380-Plus makeover would add 40-50 seats to increase the standard interior’s capacity to more than 600 seats which would help airlines reduce their costs per passenger.
To make room for those extra passengers, the A380 would do away with the double staircase at the front of the plane in favour of something more compact. The narrower spiral staircase at the back would also be modified.
Airbus officials declined to comment on the plans, which have yet to be finalised and approved.
“Airbus is always studying opportunities to improve our aircraft,” a spokesman said.
The sweeping staircase is one of the first features passengers see on boarding an A380 and captured attention when the A380 was first rolled out as a ‘cruise ship of the skies’ in 2005.
However, sales have fallen in recent years due to advances in smaller twin-engined jets, which cost less to fly and maintain.
To help on the A380, the addition of vertical wingtips, more typically seen on smaller narrow-body jets, would cut fuel consumption by reducing drag.
The sources, speaking on condition of anonymity, said the makeover would improve fuel efficiency by around two percent.
They said the changes may also be available as retrofits to existing A380s, but that this had not yet been decided.
The design changes would add about three tonnes to the A380’s maximum take-off weight, leaving more room for payload or fuel.
Airbus recently shelved plans for a bolder upgrade of the A380 involving new engines due to cost, and announced plans to cut output to one a month due to poor sales.
Beyond the new tweaks, the health of the programme depends on getting costs low enough so that Airbus can keep output ticking over at 12 a year without losing money, while it waits for what it hopes will be a rise in demand as air travel grows.
“The time will come for the A380,” Airbus sales chief John Leahy told the ISTAT Americas air finance conference this week.
Airbus was due to unveil a dedicated online booking system for A380 flights at a Berlin show on Wednesday.
The European company’s U.S. rival Boeing <BA.N> argues the time for very large four-engined jets, such as the A380 and its own slow-selling 747-8, is ending.
In the short term, Airbus faces another challenge: helping investors find homes for five A380s due to be released by Singapore Airlines after their lease expires.
So far there is no second-hand market for the jets, which entered service in 2007, and several ISTAT delegates said it would not be easy to find takers due in part to the high costs of converting the interiors to suit the needs of a new airline.
(Editing by Jason Neely)
Asian factories pick up steam in shadow of Trump protectionist threat
By Saikat Chatterjee
HONG KONG (Reuters) – Asian factories extended a global manufacturing revival as activity picked up steam in February, though the outlook for many of the region’s export-reliant economies remained uncertain in the wake of U.S. President Donald Trump’s protectionist stance.
Manufacturing surveys for Asia, including for its two biggest economies China and Japan, showed a broadly positive impulse for exports in a welcome sign for many of the companies tapped into the global supply chain.
“Encouragingly, the data indicated that the current upturn in demand remains broad-based across both domestic and international markets, while a further steep increase in purchasing activity raises the prospect of continued production growth in coming months,” said Annabel Fiddes, economist at IHS Markit, referring to Taiwan’s strong PMI reading.
Trump, however, remained the great unknown risk factor for Asia and the rest of the world.
In a key speech to Congress, the U.S. president outlined his plan for his first year in office that included healthcare and tax reforms, but he did not announce anything new on trade.
Trump’s protectionist stance has rattled global markets, with policymakers and investors remaining on edge until they see more clarity, and specific details, on U.S. economic policies.
Authorities in China, whom Trump last week labelled the “champions of currency manipulation”, can take comfort from a private survey showing factory activity expanded for an eighth consecutive month thanks to a pick up in export orders.
Zhou Hao, an economist at Commerzbank expects “bubble deflating” will remain a key theme at the upcoming National Congress, underscoring challenges for policymakers in China as an explosive rise in debt in recent years has stoked speculative asset bubbles.
That explains why Beijing plans to slightly lower its target for broad money supply growth to 12 percent, as authorities adopts a modest tightening bias in a bid to cool strong credit growth. It raised interest rates on a key funding tool in January.
India also benefited from a rebound in global demand with activity expanding for a second month, not entirely surprising given data a day earlier showed annual growth expanded 7 percent, though the strong number raised scepticism among economists on the quality of the figures.
Of greater concern was the rate of increase in output prices, as a sub-index measuring costs paid by customers grew at its fastest pace in nearly three and a half years in a sign of rising inflationary pressures.
The encouraging factory activity in Asia should also be squared off against rising interest rates in the United States, where any tempering in activity could prove detrimental to some of the region’s globe-trotting manufacturers.
A handful of Federal Reserve policymakers on Tuesday jolted markets into higher expectations for a March U.S. interest rate increase, with comments that suggested rate-setters were worried about waiting too long in the face of pending economic stimulus from Washington.
Similar surveys later in the day are expected to show solid growth in manufacturing in Europe and the United States.
China’s exports, which have lagged its regional counterparts in recent months, showed signs of a pickup with the Caixin PMI sub-index for new export orders rising to 53.8, the highest rate of growth since September 2014.
That bounce in new orders was echoed in South Korea where exports grew at their fastest pace in five years supported by a pickup in global demand and from China.
The trade ministry said exports to China, South Korea’s biggest customer, rose for a fourth straight month while semiconductor exports posted their best monthly performance on record, riding on a months-long rally in electronics.
“February data shows that there is a clear export resurgence, as exports in terms of both price and volume seem to be increasing,” said Lee Sang-jae, an economist for Eugene Investment & Securities in Seoul.
In Japan, the picture was mixed, even as a pick up in manufacturing activity at its fastest pace in three years was accompanied by strong export orders. Question marks remain about domestic demand, and shipments to the U.S., which have failed to show strong growth in the past year.
Indeed, January exports growth slowed and data on Tuesday showed factory output unexpectedly fell for the first time in six months in Japan while headline PMI figures out of China showed signs of slowing.
In Australia, investors had a lot to cheer as data showed the economy rebounded sharply last quarter thanks to a boom in commodity exports, extending the resource rich nation’s 25-year streak of uninterrupted expansion.
An uptick in momentum in China, Australia’s major export market, is another reason for the Reserve Bank of Australia to hold off on more rate cuts this year.
“Looking ahead, with domestic monetary policy set to remain loose and global growth likely to pick up a bit this year, we expect a gradual recovery in Asian manufacturing ahead,” said Krystal Tan, Asia economist at Capital Economics.
(Additional reporting by Christine Kim and Cynthia Kim in SEOUL; Editing by Randy Fabi & Shri Navaratnam)
UK government says MPs will vote on BREXIT deal before EU parliament
LONDON (Reuters) – MPs will be given the chance to vote on the government’s final Brexit deal before the exit terms are debated by the European Parliament, junior Brexit minister David Jones said on Tuesday.
“The government will bring forward a motion on the final agreement to be approved by both houses of parliament before it is concluded,” he told parliament. “We expect and intend that this will happen before the European Parliament debates and votes on the final agreement.”
The statement represents a concession to MPs who were pushing for a “more meaningful” vote on the deal.
He also said the vote would cover the withdrawal arrangements and the terms of Britain’s future relationship with the bloc.
(Reporting by William James, editing by Elizabeth Piper)
US consumers slow their borrowing in December ahead of expected Brexit pinch
LONDON, Jan 31 (Reuters) – British consumers slowed the pace of their borrowing in December for the first time in five months, an early sign that households might be reining in their spending as last year’s Brexit vote pushes up inflation.
Consumer credit in December rose by just over 1.0 billion pounds – much less than an increase of 1.7 billion pounds forecast in a Reuters poll of economists and down from an increase of nearly 2 billion pounds in November.
Spending by households helped Britain rack up the fastest economic growth in 2016 among the world’s big, rich economies, despite the shock of the vote in June to leave the European Union.
The annual growth rate in borrowing slowed to 10.6 percent from 10.8 percent in November which had been the strongest growth in 11 years. It was the first fall in the annual rate since July and the biggest slowdown since December 2013.
Credit card borrowing slowed even more sharply to show an increase of 228 million pounds, the smallest increase since October 2015.
The BoE expects growth to slow in 2017 as rising inflation, triggered by the post-Brexit vote fall in the value of the pound, eats into the spending power of consumers.
Furthermore, Britons are saving less than at any time in the last eight years, raising questions about how long they are likely to continue borrowing so freely.
BoE Governor Mark Carney said on Jan. 16 that British growth had relied heavily on consumers, rather than business investment or exports, which made it vulnerable as household spending could not outpace wage growth indefinitely.
A survey published overnight showed households might be starting to scale back on spending as last year’s Brexit vote pushes up inflation.
Tuesday’s figures from the BoE showed that the number of mortgages for house purchase approved by lenders increased to 67,898, a bit below the median forecast of 69,000 in the Reuters poll but still the biggest number since March 2016.
Last week, the British Bankers’ Association, using less comprehensive figures, said mortgage approvals hit a nine-month high in December.
The BoE forecast in November that mortgage approvals would slow to a monthly average of 65,000 over the next six months, and major lenders expect weaker house price growth.
Net mortgage lending, which lags approvals, rose by 3.8 billion pounds in December, the BoE said, stronger than a forecast of 3.3 billion pounds in the Reuters poll.
The BoE also said on Tuesday that foreign investors were net sellers of British government bonds for the first time since July after some of the strongest purchases on record in the previous three months.
Net sales totalled 2.97 billion pounds in December compared with purchases of 15.58 billion pounds in November.
(Reporting by William Schomberg and David Milliken)
As Trump stresses ‘America First”, China plays the world leader
By Ben Blanchard
BEIJING (Reuters) – China is calmly mapping out global leadership aspirations from trade to climate change, drawing distinctions between President Xi Jinping’s steady hand and new U.S. President Donald Trump, whose first days have been marked by media feuds and protests.
Just days ahead of Trump taking office, a self-assured Xi was in Switzerland as the keynote speaker at the World Economic Forum in Davos, offering a vigorous defence of globalisation and signalling Beijing’s desire to play a bigger role on the world stage.
Even on the thorny issue of the South China Sea, Beijing did not rise to the bait of White House remarks this week about “defending international territories” in the disputed waterway. Instead, China stressed its desire for peace and issued a restrained call for Washington to watch what it says.
“You have your ‘America first’, we have our ‘community of common destiny for mankind’,” Retired Major-General Luo Yuan, a widely read Chinese military figure best known for his normally hawkish tone, wrote on his blog this week.
“You have a ‘closed country’, we have ‘one belt, one road’,” he added, referring to China’s multi-billion dollar new Silk Road trade and investment programme.
And while China has repeatedly said it does not want the traditional U.S. role of world leadership, a senior Chinese diplomat accepted this week it could be forced upon China.
“If anyone were to say China is playing a leadership role in the world I would say it’s not China rushing to the front but rather the front runners have stepped back leaving the place to China,” said Zhang Jun, director general of the Chinese Foreign Ministry’s international economics department.
That message was reinforced this week when Trump formally withdrew the United States from the Trans-Pacific Partnership trade deal, distancing America from its Asian allies. Several remaining TPP members said they would now look to include China in a revised pact, or pursue Beijing’s alternative free trade agreements.
“At many important multilateral forums, China’s leader has put forward Chinese proposals, adding positive impetus to world development,” Su Xiaohui a senior researcher at the Foreign Ministry-backed China Institute of International Studies, wrote of the U.S. TPP decision in the overseas edition of the People’s Daily.
“In the economic integration process of the Asia Pacific, compared to certain countries who constantly bear in mind their leadership role, what China pays even more attention to is ‘responsibility’ and ‘stepping up’,” Su said.
China’s hosting of an international conference on its “One Belt, One Road” initiative in May is one opportunity for Beijing to showcase its leadership of global infrastructure and investment.
A diplomatic source familiar with preparations said China was likely to hold it at the same glitzy convention centre used to host the Asia Pacific Economic Cooperation summit in 2014, setting the stage for Xi’s most high profile diplomatic event of the year.
“China’s pretty much inviting everyone,” the diplomat said.
Another area where China is keen to be seen as leading the way is climate change. Trump has in the past dismissed climate change as a “hoax” and vowed during his presidential campaign to pull the United States out of the Paris Climate Agreement.
Li Junhua, head of the Chinese Foreign Ministry’s Department of International Organisations and Conferences, said world was worried about climate change and whether countries would honour their Paris commitments.
“As far as China is concerned, my president has made it extremely clear, crystal clear, China will do its part,” Li told reporters.
It’s not always been this way. China has been through a long, tough learning process to become a more responsible power.
In 2013, China, angered with Manila over the long dispute on the South China Sea, only stumped up meagre aid to the Philippines after it was hit by Super Typhoon Haiyan, prompting rare dissent in the influential Chinese state-run tabloid the Global Times that Beijing’s international image would be hit.
It also will not be plain sailing. On certain key core issues including the self-ruled island of Taiwan, China will not back down.
In its first official reaction to Trump taking office, China’s Foreign Minister urged his administration to fully understand the importance of the “one China” principle, which Trump has called into doubt and under which Washington acknowledges China’s position of sovereignty over Taiwan.
China also expects that under the Trump administration it will be left alone on one issue that has long dogged ties with Washington – human rights.
The WeChat account of the overseas edition of the ruling Communist Party’s official People’s Daily noted with approval on Saturday that Trump’s inaugural speech neither mentioned the words “democracy” nor “human rights”.
“Perhaps looking back, these things have been hyped up too much” by U.S. politicians, it added.
(Editing by Lincoln Feast)
Avalanche hits Italy hotel, many feared dead or injured
PENNE, Italy (Reuters) – An avalanche hit a small hotel in the mountains of central Italy overnight after a series of strong earthquakes in the area, and up to 30 people might be buried under the snow, officials said on Wednesday.
“Around 30 people are unaccounted for, between guests and workers at the Hotel Rigopiano in Farindola,” Fabrizio Curcio, head of Italy’s civil protection department, was quoted as saying by Italian media.
Other officials said it was too early to say if anyone might have died, with the rescue operation hampered by up to 5 metres (16.4 ft) of snow which has fallen on the Gran Sasso mountain range in the central Abruzzo region in recent days.
“We’re dropping our rescue units down by helicopter and they are starting to dig,” said Luca Cari, spokesman for the national fire brigades.
Italian media earlier reported that “many dead” had been found inside the hotel. However officials in the area denied the report.
(Reporting by Philip Pullella, Valentina Consiglio and Steve Scherer, editing by Crispian Balmer)
ECB to hold steady, Trump takes office
By Jonathan Cable
LONDON (Reuters) – European Central Bank officials are unlikely to make any change in policy on Thursday, while data from the United States will help the Federal Reserve decide whether to immediately follow December’s rate increase with another.
Recent data from the euro zone suggests the bloc’s economy ended 2016 on a solid footing, and last month the ECB surprised markets by saying it would trim its monthly bond purchases to 60 billion euros (52.28 billion pounds) starting in April.
So none of the economists polled by Reuters this week expect any change at Thursday’s meeting. They were unanimous in saying the ECB’s next move, after April’s planned cut, will be to taper quantitative easing further [ECILT/EU].
“Next week’s ECB meeting should be a non-event. After the December decision to extend QE at a slower pace, the ECB is almost on an autopilot for the rest of 2017,” said James Knightley at ING.
However, a rebound in prices in December is reviving calls for the ECB to taper its bond purchases, particularly in Germany. Many Germans feel low rates are eating into their savings and fuelling a property bubble while inflation is already close to the ECB’s target of almost 2 percent.
But protectionist sentiment is growing after Britain voted to leave the European Union and Donald Trump won the U.S. presidential election. Several elections in EU countries this year could have far-reaching political ramifications and even threaten the euro zone itself. That is likely to stay the ECB’s hand for now.
In the press conference after the policy announcement, ECB President Mario Draghi will probably also face questions over the hacking of his email account during his tenure as governor of the Bank of Italy.
It is not yet clear what the hackers got their hands on. But the idea of a leak of sensitive information ranging from monetary policy to emergency measures for Greece will be of concern.
ECB officials are growing increasingly worried Trump’s victory in the U.S. presidential race may harm the euro zone by hurting trade with the U.S and fuelling populism.
Speaking publicly and behind the scenes, officials emphasise any U.S. shift towards protectionism could hurt the already fragile euro zone economy and pave the way for an even stronger backlash against globalisation and the euro project.
Trump gave little new policy information at a press conference on Wednesday, but his protectionist statements have kept many investors from adding to risky positions.
The president-elect has threatened to impose retaliatory tariffs on China, build a wall along the Mexican border and tear up the North American Free Trade Agreement (NAFTA).
Before Trump’s inauguration on Friday, and their next policy announcement on Feb. 1, several Fed policymakers are due to speak, and they are likely to send an upbeat message.
Inflation, industrial production and housing-start numbers are all expected to signal a strengthening economy, giving the Fed scope to follow up December’s rate increase with more tightening this year.
Its Federal Open Market Committee is expected to hike twice more in 2017 and recent comments from policymakers suggest there could be a third move too. [FED/R]
“The FOMC continues to predict only gradual increases in the federal funds rate, especially given the uncertainty surrounding the economic agenda of Trump’s administration,” Credit Suisse economists told clients.
“We continue to see two additional hikes in 2017, but acknowledge that the outlook is subject to change in months ahead.”
BEGINNING OF BREXIT
Britain’s shock decision in June to leave the European Union has sent sterling tumbling. Although the economy has so far fared better than expected, inflation numbers on Monday will probably show prices jumped in December as imports became more expensive.
Prime Minister Theresa May has said she will trigger Article 50, starting the formal withdrawal from the EU, by the end of March. Many think she will take a hard line on immigration at the cost of Britain’s access to the single market, hindering trade.
“The government has sent clear signals that the UK will leave the Single Market, a so-called ‘hard Brexit’,” said Sarah Hewin at Standard Chartered.
May is due to speak on Tuesday, setting out the approach her administration will take to Brexit. If she does indicate away from a soft Brexit, sterling will probably fall further.
(Additional reporting by Francesco Canepa in Frankfurt, editing by Larry King)
Iraqi general says 70 percent od east Mosul retaken from Islamic state
By Stephen Kalin and Isabel Coles
ERBIL, Iraq (Reuters) – Iraqi forces have retaken around 70 percent of eastern Mosul from Islamic State militants and expect to reach the river bisecting the city in the coming days, Iraq’s joint operations commander told Reuters.
Lieutenant General Talib Shaghati, who is also head of the elite counter-terrorism service (CTS) spearheading the campaign to retake the northern city, said the cooperation of residents was helping them advance against Islamic State.
In its 12th week, the offensive has gained momentum since Iraqi forces backed by a U.S.-led coalition renewed their push for the city a week ago, clearing several more eastern districts despite fierce resistance.
“Roughly 65-70 percent of the eastern side has been liberated,” Shaghati said in an interview late on Wednesday in the Kurdish capital of Erbil. “I think in the coming few days we will see the full liberation of the eastern side”.
The western half of the city remains under the full control of Islamic State, which is fighting to hold on to its largest urban stronghold with snipers and suicide car bombs numbering “in the hundreds” according to Shaghati.
The Mosul assault, involving a 100,000-strong ground force of Iraqi government troops, members of the autonomous Kurdish security forces and mainly Shi’ite militiamen, is the most complex battle in Iraq since the U.S.-led invasion in 2003.
The commander of a U.S.-led coalition backing the Iraqi offensive told Reuters on Wednesday that increased momentum was due largely to better coordination among the army and security forces. He said the Iraqis had improved their ability to defend against Islamic State car bombs.
Although vastly outnumbered, the militants have used the urban terrain to their advantage, concealing car bombs in narrow alleys, posting snipers on tall buildings with civilians on lower floors and making tunnels and surface-level passageways between buildings. They have also embedded themselves among the local population.
The presence of large numbers of civilians on the battlefield has restricted Iraqi forces’ use of artillery but the cooperation of residents has also helped them target the militants.
“They give us information about the location of the terrorists, their movements and weapons that has helped us pursue them and arrest some and kill others,” Shaghati said.
In the run-up to the Mosul offensive, Iraqi officials expressed hope that residents would rise up against Islamic State, accelerating the group’s demise in the city. But mass executions seem to have discouraged widespread resistance.
An Iraqi victory in Mosul would probably spell the end for Islamic State’s self-styled caliphate, which leader Abu Bakr al-Baghdadi declared 2-1/2 years ago from Mosul’s main mosque after the militants overran the city.
But in recent days, the militants have displayed the tactics to which they are likely to resort if they lose the city, killing dozens with bombs in Baghdad and attacking security forces elsewhere.
An attack claimed by Islamic State killed six people on Thursday on the capital’s eastern outskirts.
CTS pushed into Mosul from the east in late October and made swift advances but regular army troops tasked with advancing from the north and south made slower progress and the operation stalled for several weeks.
The roughly 10,000 members of CTS, established a decade ago with support from the U.S. forces, are considered the best-trained and equipped fighters in Iraq.
Shaghati described the role of the international coalition, providing air support and advising Iraqi forces on the ground as “outstanding” and said Islamic State was crumbling under pressure.
“Daesh (Islamic State) devised many plans to obstruct and block us but they failed. We were able to surpass them and these areas were liberated with high speed,” Shaghati said.
“We have intelligence that (Islamic State) leaders and their families are fleeing outside Iraq.”
(Writing by Isabel Coles; Editing by Janet Lawrence)
Russia says no sign or fire or blast in Black sea jet crash wreckage – TASS
MOSCOW (Reuters) – Russia’s Defence Ministry said on Thursday that no signs of damage from an explosion or fire had been found on the wreckage of a military plane that crashed into the Black Sea on Sunday, killing all 92 people on board, the TASS news agency reported.
(Reporting by Peter Hobson; Editing by Katya Golubkova)
China confirms third human bird flu infection stirs fears of spread
BEIJING (Reuters) – China has found two more cases of human bird flu infection, bringing this week’s total to three and stoking fears the deadly virus could spread at a time when other Asian nations are battling to control outbreaks of the disease.
Health officials in nearby South Korea and Japan have been scrambling to contain outbreaks of different strains of bird flu, with the poultry industry there bracing for heavy financial losses.
A man diagnosed with the H7N9 strain of bird flu is being treated in Shanghai, after traveling from the neighboring province of Jiangsu, the Shanghai Municipal Commission of Health and Family Planning said on its website on Wednesday.
Shanghai is China’s most populated city with more than 24 million residents.
The local government in Jiangsu is looking into the origin of the infection, the provincial health authority said on Thursday.
In Xiamen, a city in China’s eastern Fujian province, local authorities ordered a halt to poultry sales from Thursday in the Siming district, after a 44-year-old man was diagnosed with H7N9 flu on Sunday, state news agency Xinhua reported late on Wednesday.
The patient is being treated in hospital and is in stable condition, Xinhua said, citing Xiamen’s diseases prevention and control center. The city has a population of about 3.5 million.
The latest incidents come after Hong Kong confirmed an elderly man was diagnosed with the disease earlier this week.
CHICKEN DEMAND AT RISK?
The cases come as South Korea and Japan have ordered the killing of tens of millions of birds in the past month, fueling fears of a regional spread.
Bird flu is most likely to strike in winter and spring and farmers have in recent years increased cleaning regimes, animal detention techniques and built roofs to cover hen pens, among other steps, to prevent the disease.
In the past two months, more than 110,000 birds have been killed following bird flu outbreaks, according to the Ministry of Agriculture. They did not lead to human infection.
Each year, China slaughters 11 billion birds for consumption.
Authorities have not culled any birds as a result of this week’s episodes, which appear to be isolated.
Still, farmers worry the virus could spread, hurting demand for chicken as the Chinese prepare for peak demand during Lunar New Year celebrations at the end of January.
Amid recent outbreaks elsewhere, the Chinese are feeding their flocks more vitamins and vaccines and ramping up hen house sterilization to protect their birds.
On Wednesday, authorities said they would ban imports of poultry from countries where there are outbreaks of highly pathogenic bird flu. It already prohibits imports from more than 60 nations, including Japan and South Korea.
The last major bird flu outbreak in mainland China in 2013 killed 36 people and caused about $6.5 billion in losses to the agriculture sector.
Delegations from Japan, South Korea and China gathered in Beijing last week for a symposium on preventing and controlling bird flu and other diseases in East Asia, according to China’s agriculture ministry website.
(Reporting by Josephine Mason, Hallie Gu and Beijing newsroom; Editing by Joseph Radford and Manolo Serapio Jr.)
Dovich tilt at Fed next year could meet hawkish Trump picks
By Jonathan Spicer
NEW YORK (Reuters) – Donald Trump and his fellow Republicans are expected to add more so-called hawks to the Federal Reserve’s ranks, which could offset a dovish tilt next year among policy voters and rattle a fragile Fed consensus to go slow on U.S. rate hikes.
The central bank raised interest rates a notch on Wednesday and signalled that three more hikes were expected in 2017, in a partial nod to expectations Trump will cut taxes and boost spending.
The U.S. President-elect will have two vacant Fed board seats to fill as soon as next month and, given his party’s desire for more aggressive rate hikes, he is expected to choose policy hawks.
He will likely also nominate for Senate approval Fed Chair Janet Yellen’s successor in 2018, a choice that has already sparked speculation on names.
“I’d be looking for someone more hawkish than dovish, than what we’ve been seeing,” Bill Huizenga, the Republican congressman who chairs the House monetary policy and trade subcommittee, said in an interview. The Senate, not the House, confirms the president’s Fed nominees.
While Fed doves generally prefer lower rates to stimulate economic growth and employment, hawks want them higher to avoid an inflation run-up leading to recession.
Wednesday’s decision was unanimous among the 10 central bankers with votes this year, including three regional Fed presidents, Loretta Mester, Eric Rosengren and Esther George, who each cast a hawkish dissent against the Fed’s decision in September to stand pat.
They are among the four to rotate out of the Federal Open Market Committee (FOMC) next year, replaced by ardent dove Chicago Fed President Charles Evans and three first-time voters who became Fed presidents in the last 18 months. This trio, Patrick Harker, Robert Kaplan and Neel Kashkari, have urged only gradual rate hikes in past speeches.
Macroeconomic Advisers, a research firm that publishes a 1-to-10 “voting index,” estimated the FOMC will edge towards the dovish end of the scale at a 3.8 reading next year, from 4.2 now. “Dissents in favour of a slower pace of hikes from some of the most dovish members are … a possibility,” it said in a note.
Still, Trump will likely name more conservative governors next year and replace both Yellen, assuming she does not stay on as Fed governor when her term expires, and Vice Chair Stanley Fischer in 2018.
Early speculation by former Fed officials, lawmakers, and outside economists suggest Trump could consider as Fed chair, among others: John Taylor, economics professor at Stanford University and a favourite of congressional Republicans; Glenn Hubbard, dean of Columbia University’s Graduate School of Business; Marvin Goodfriend, economics professor at Carnegie Mellon University and former Richmond Fed official; and Kevin Warsh, a distinguished visiting fellow at Stanford University’s Hoover Institution and a former Fed governor.
(Reporting by Jonathan Spicer; Additional reporting by Ann Saphir; Editing by Meredith Mazzilli)
OIl prices solar on global producer deal to cut crude output
By Henning Gloystein
SINGAPORE (Reuters) – Oil prices shot to their highest levels since mid-2015 on Monday after OPEC and other producers reached their first deal since 2001 to jointly reduce output in order to rein in oversupply and prop up markets.
Brent crude <LCOc1>, the international benchmark for oil prices, soared to $57.89 per barrel in overnight trading between Sunday and Monday, the highest level since July 2015.
U.S. West Texas Intermediate (WTI) crude <CLc1> also hit a July 2015 high of $54.51 a barrel.
Brent and WTI eased to $56.83 and $54.20 respectively by 0751 GMT, but were both still up over 4 percent from their last settlements.
With the deal signed after almost a year of arguing within the Organization of the Petroleum Exporting Countries and mistrust in the willingness of non-OPEC Russia to participate, focus is switching to compliance of the agreement.
“We believe that the observation of the OPEC-11 and non-OPEC 11 production cuts is required to sustainably support… oil prices to our 1H17 WTI price forecast of $55 a barrel,” Goldman Sachs said.
“This forecast reflects an effective 1.0 million barrels per day (bpd) cut vs. the 1.6 million bpd announced cut and greater compliance to the announced cuts is therefore an upside risk to our forecasts.”
Goldman Sachs forecast full compliance would be worth an extra $6 per barrel to its price forecast.
AB Bernstein said the agreed deal “amounts to an aggregate supply cut of 1.76 million barrels per day (bpd) from 24 countries which currently produce 52.6 million bpd, or 54 percent of world oil supply.”
Bernstein said that “some of the non-OPEC supply cuts will come from natural decline, but most will come from self-imposed cuts.”
Saudi Aramco has told U.S. and European customers it will reduce oil deliveries from January.
“The kingdom is targeting excess inventories, the lion’s share of which sit in the United States,” said Virendra Chauhan, oil analyst at Energy Aspects in Singapore. “Lower Saudi exports to the U.S. could also make the export arbitrage uneconomic.”
OPEC plans to slash output by 1.2 million bpd from Jan. 1, with top exporter Saudi Arabia cutting around 486,000 bpd in a bid to end overproduction that has dogged markets for two years.
On Saturday, producers from outside OPEC agreed to reduce output by 558,000 bpd, short of the target of 600,000 bpd but still the largest contribution by non-OPEC ever.
“Non-OPEC participation should add to bullish sentiment,” Morgan Stanley said.
From outside OPEC, Russia said it would gradually cut 300,000 bpd.
“Once cuts are implemented at the start of 2017, oil markets will shift from surplus into deficit. Given the cuts in production announced by OPEC, we expect that markets will move into a 0.8 million bpd deficit in 1H17,” AB Bernstein said.
But some analysts expect producers, drawn by higher oil prices, to increase output again.
“There are too many moving parts for OPEC’s new policy to be sustainable in the long term. The strategy is bound to overshoot, in our view. leading to lower prices in the second half of next year,” Barclays said in a note on Monday.
It forecast prices would fall from around $60 a barrel in the second quarter to about $52 in the fourth quarter next year.
(Additional reporting by Florence Tan and Keith Wallis; Editing by Richard Pullin)
German exports rise less than expected in October
BERLIN (Reuters) – German exports rebounded by less than expected in October, dampening hopes that trade will make a significant contribution to a predicted expansion in Europe’s biggest economy in the final quarter of this year.
Seasonally adjusted exports rose by 0.5 percent on the month, data from the Federal Statistics Office showed on Friday, while imports increased by 1.3 percent.
The data reinforces a trend of weakening exports, which have been losing their traditional role as the main growth driver in Germany.
A Reuters poll had pointed to exports rising by 1.0 percent and imports posting a 0.9 percent increase.
The jump in imports narrowed the seasonally adjusted trade surplus to 20.5 billion euros from 21.1 billion euros in September. The October reading was below the Reuters consensus forecast of 21.5 billion euros.
(Reporting by Berlin newsroom; Writing by Joseph Nasr; Editing by Paul Carrel)
Search resumes after Indonesian quake as death toll passes 100
PIDIE JAYA, Indonesia (Reuters) – Rescue efforts resumed in Indonesia’s Aceh province on Thursday after a strong earthquake killed more than 100 people, while medical teams struggled to treat the hundreds of injured as supplies trickled slowly into the area.
Wednesday’s 6.5 magnitude quake was the biggest disaster to hit the province on the northern tip of Sumatra island since the Indian Ocean tsunami of 2004, which killed more than 120,000 people in Aceh alone.
Traffic congestion around the epicentre in Aceh’s Pidie Jaya regency slowed logistical and medical supplies sent by government agencies and NGOs.
“There are a lot of government trucks and private vehicles loaded with supplies … but this is causing a lot of congestion and some logjam in the early response,” said Paul Dillon of the International Organisation for Migration, a non-government organisation.
Television images showed some patients being treated in makeshift tents in car parks because hospitals were full.
Indonesia’s national disaster management agency put the death toll at 102 on Thursday, with more than 700 injured and thousands left homeless.
The agency said more than 1,000 personnel, including military officers and volunteers, had been deployed to help in search and rescue operations.
The search on Thursday was expected to focus on a collapsed marketplace, where at least five people were believed trapped under rubble.
Some of the victims included people attending a wedding party, The Jakarta Post reported.
“They planned to attend a wedding. They spent the night here,” the newspaper quoted resident Muhammad Armi as saying.
Wednesday’s quake hit the east coast of the province, about 170 km (105 miles) from Banda Aceh, the provincial capital. Aceh’s Pidie Jaya regency, with a population of about 140,000, was worst hit.
Experts said the quake did more damage than expected because of poorly constructed buildings.
“Assessment of some of the initial information shows that single storey houses without reinforced internal brick or masonry walls have been damaged severely or collapsed,” said Behzad Fatahi, a geological expert at the University of Technology in Sydney.
Aceh was devastated by a massive earthquake and tsunami centred on its western coast near Banda Aceh on Dec. 26, 2004. That tsunami killed 226,000 people along Indian Ocean shorelines.
(Additional reporting by Fergus Jensen and Kanupriya Kapoor in JAKARTA; Editing by Paul Tait)
Oil prices shed early gains amid doubts over OPEC output cut
By Jane Chung and Keith Wallis
SEOUL/SINGAPORE (Reuters) – Oil prices erased early gains to trade almost flat in Asian session on Thursday on mixed U.S. crude stocks data and doubts over OPEC’s implementation of an output cut, although a weaker dollar aided sentiment.
International Brent <LCOc1> crude futures were trading up 2 cents at $53.02 a barrel at 0807 GMT. Prices fell to $52.81 a barrel earlier in the session.
U.S. benchmark West Texas Intermediate crude <CLc1> was up 3 cents at $49.80 a barrel after dropping to $49.61 earlier.
Crude oil inventories in the United States dropped 2.4 million barrels in the week that ended on Dec. 2, compared with analyst expectations for a draw of 1 million barrels.
But stocks at the Cushing, Oklahoma, delivery hub for U.S. crude futures, increased by a hefty 3.8 million barrels last week, the most since 2009, according to data from the U.S. Energy Information Administration (EIA) on Wednesday.
“Momentum continues to wane in crude with mixed EIA crude inventories data and shale producers hedging via futures,” said Jeffrey Halley, senior market analyst at OANDA brokerage in Singapore.
Oil prices have rallied since the Organization of Petroleum Exporting Countries (OPEC) and Russia reached a landmark agreement last week to cut production to erode a global supply overhang and prop up prices.
The U.S. dollar index <.DXY> fell as Treasury bond yields eased and as investors eye next week’s Fed meeting.
“A slightly weaker U.S. dollar is supportive of oil prices,” Michael McCarthy, chief market strategist at Sydney’s CMC Markets said. A weak dollar makes dollar-denominated oil less expensive for importing countries.
Oil prices initially rose on Thursday, supported by upbeat investor sentiment on the underlying strength in the U.S. economy, McCarthy said.
But doubts remain over whether OPEC will be able to comply with output cuts and whether those curbs will be enough to rebalance markets.
“Talk about OPEC compliance worries is a bit of a red herring. As in the past, OPEC compliance/non-compliance is a known unknown. What the crude rally really needs is new news to reinvigorate a speculative market already positioned long,” added Halley.
OPEC and non-OPEC oil producers will meet again this weekend in Austria’s capital to discuss the details of last week’s agreement, which aims at an overall reduction in output of around 1.5 million barrels a day.
“Oil markets might see a pick-up in volumes as we enter the European trading session,” McCarthy added.
China’s crude oil imports rebounded strongly in November from the previous month and were up 18 percent on a year ago, while exports of refined fuel hit a record high as refiners rushed to ease an expanding domestic surplus.
(Reporting by Jane Chung and Keith Wallis; Editing by Richard Pullin and Subhranshu Sahu)