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ECONOMY REMAINS STRONG IN FINAL QUARTER

The economy remains strong in the final quarter of the year, with current growth levels of around 3.5%. This growth is the slowest since 2016, owed in part to the position the Trump administration has taken on trade and other smaller factors. The unemployment rate is currently 3.7%. The current rate of inflation is 2.3%, which has helped keep prices low amidst some consumer goods costing more thanks to trade practices. Current oil prices are $60 a barrel. 

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US SOYBEAN EXPORTS DOWN 94%

Exports of soybean have fallen dramatically as President Trump continues his trade war with China. The US agriculture sector is one of the only areas where the US economy enjoys a surplus, however China is one of the biggest importers of American farm goods. Eighty-seven percent of the reported 110 million tons of soybeans China consumed in 2017 were imported, largely from the U.S. or Brazil. States arguably affected by this include Illinois, Iowa and Minnesota, the mid-west accounting for 80% of soybean farming in the United States. Though many soybean farmers expressed trust in Trump and his protectionist trade agenda, they were unhappy with the effect Beijing's retaliatory tariffs have had on their business. 

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EU COMMISSION OFFICIAL WARNS OF TARIFF RETALIATION

An official of the European Commission today has spoke out against an executive order signed by President trump to raise tariffs on EU car imports to the US by 7.5%, to bring them in line with the tariffs imposed by the EU on US car exports. Some car companies such as Mercedes Benz, BMW and Volkswagen have reported some losses on the stockmarket thanks to the signing of the executive order. Cecilia Malmstrom warned that Brussels was “ready” to retaliate against US products in the future. She said such retaliation would cover “a lot of different sectors” and would be “compatible” with global trade rules. A report by the Tax Foundation, a Washington-based economic think-tank, released this week estimated that a 25 per cent tariff on the EU’s $56.3bn in annual exports of cars to the US would lead to more than 31,000 job losses. Given that the tariffs are only 10%, we can expect no where near 31,000 job losses but perhaps around 11,000, maybe less.

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CALIFORNIA WILDFIRES TO COST UP TO $13BN

The wildfires in northern California are expected to cost up to $13bn according to the Federal Emergency Management Agency, which was recently sent in to activate federal disaster programs and provide aid, along with other amenities to the residents of the state. The spate of wildfires burning across California will cost the insurance industry between $9bn and $13bn. The Camp and Woolsey fires have, between them, destroyed 12,000 buildings and killed 80 people, with hundreds more still missing. The fire in the most northern part of the state is reportedly the 'worst' in history. 

Members of the insurance industry has called on the state and federal government  to 'do more' to decrease the risk of forest fires breaking out, citing their immense cost and risk factor to the general public.

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US CROPS ROT AS STORAGE COSTS SOAR

As Chinese-US tariffs remain in place, many farmers of the Midwest and throughout the United States are left with a problem - where to put the mountain of grain they cannot sell to Chinese buyers. With previous reports of soybean exports falling by 94%, farmers are failing to get rid of their produce with no buyers and no where to store it. Across the United States, grain farmers are plowing under crops, leaving them to rot or piling them on the ground, in hopes of better prices next year. U.S. farmers planted 89.1 million acres of soybeans this year, the second most ever, expecting China’s rising demand to give them better returns than other bulk crops. But Beijing slapped a 25 percent tariff on U.S. soybeans in retaliation for duties imposed by Washington on Chinese exports. That effectively shut down U.S. soybean exports to China, worth around $12 billion last year. China typically takes around 60 percent of U.S. supplies.

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US STOCKS OPEN AT A HIGH FOLLOWING BUDGET SIGNING

US tickers open at a high thanks to the signing of the federal budget by President Trump today. The budget was a compromise drawn up by Congressional Democrats and Republicans, notably Congressman Rick Sharp. With the budget being signed into law, it has sent a certain amount of confidence back into the economy, mainly because the US government has raised the confidence in its bonds. The U.S. economy is firing on all cylinders—job growth is strong, wages are climbing, factories are humming and inflation is on target.

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EU TO REVIEW CHINESE INVESTMENTS

The European Union agreed to establish a framework for screening foreign investments in an attempt to safeguard strategic EU assets following a Chinese buying spree. EU governments and officials agreed to cooperate and exchange information on acquisitions, while granting the bloc’s executive—the European Commission—authority to issue a nonbinding opinion on potential deals. Spooked by soaring Beijing-backed takeovers—particularly of tech companies—the EU moved to address security risks even as beneficiaries of Chinese spending in the bloc resisted steps that could curtail the cash flow. Meanwhile, some EU member states, including Britain and Germany, also took steps to revamp their own laws. Berlin derailed two Chinese bids into strategically important assets in July, deploying national security grounds for the first time to protect a transmission system operator as well as a machine-tool company, Leifeld Metal Spinning AG.

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GM TO CUT JOBS IN NORTH AMERICA

General Motors plans to cut up to 14,800 jobs in the U.S. and Canada and end production at several North American factories, marking the auto maker’s first significant downsizing since its bankruptcy last decade as the company tries to adjust to weak sedan sales. The moves, affecting plants in Michigan, Ohio and Canada would reduce GM’s annual costs by $4.5 billion by the end of 2020, freeing up money to invest in electric and self-driving vehicles. The company also said it would end production next year at three North American assembly plants and two smaller transmission factories, which combined employ more than 6,700 workers. Those include a factory in Lordstown, Ohio, where GM makes the Chevrolet Cruze; the Detroit-Hamtramck plant in the company’s hometown, where it makes the Chevrolet Volt plug-in hybrid and several large sedans; and a factory in Oshawa, Ontario, a source of such models as the Chevrolet Impala and the Cadillac XTS. 

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FCIC APPROVE PACKAGE OF AID TO CORN FARMERS

In what President Trump has described to be "Democrats making a big issue out of regaining American trade independence" the Department of Agriculture through its Farm Service Agency has authorized the Market Facilitation Program to provide payments to corn, cotton, dairy, hog, sorghum, soybean, and wheat producers. The Agricultural Marketing Service will administer a Food Purchase and Distribution Program to purchase up to $1.2 billion in commodities unfairly targeted by unjustified retaliation. The Food and Nutrition Service will distribute these commodities through nutrition assistance programs such as the Emergency Food Assistance Program and child nutrition programs. When asked about the $1.65-per-bushel rate for soybeans, John Heisdorffer, president of the American Soybean Association, replied: “This would be a good number for growers.”

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CHINA OPENS UP ON TRADE

China is beginning to flesh out details of a tariff truce with the U.S., China’s Commerce Ministry in a statement acknowledged for the first time that Beijing agreed to a 90-day cease-fire to allow negotiations to take place. Also this week, key government agencies and China’s supreme court announced tough punishments for infringing on intellectual property. Together, the moves begin to fill in some of Beijing’s understanding of the agreement between Mr. Trump and President Xi Jinping, this stems from President Xi's most recent visit to Washington. The Commerce Ministry’s statement didn’t mention purchases of agricultural and other products, tariff reductions for imports of U.S. autos or negotiating about intellectual property protection, technology transfers and other structural issues the U.S. says are on the agenda. Should talks fail to yield an agreement, the Trump administration has said it would move ahead with raising tariffs on $200 billion of Chinese goods to 25%, from 10% currently.

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OIL PRICES TO RISE

OPEC and a coalition of oil producers led by Russia reached an agreement to join in a significant production cut. The Organization of the Petroleum Exporting Countries along with Russia and its allies will curb oil output by a collective 1.2 million barrels a day. Brent crude jumped to $63.11 a barrel thanks to the announcement, raising oil prices ever so slightly as production is curtailed. The deal showcases Russia’s new clout as an oil producer and the importance of its alliance with de facto OPEC leader Saudi Arabia. Cooperation between a Russia-led group of non-OPEC oil nations and the Saudis helped producers prop up prices with deep production cuts in 2017. The U.S. Government has remained silent on the price manipulation, thanks to US increasing its own domestic supply as of recent months.

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US HIRING SLOWS

U.S. employers slowed their pace of hiring in November, but wage growth matched the highest rate in nearly a decade and unemployment held at a very low level, showing the labor market remains a pillar of strength even as the stock market and other economic signals flash caution. U.S. nonfarm payrolls increased a seasonally adjusted 155,000 in November, the Labor Department have said. The unemployment rate held steady at 3.7% last month, matching the lowest rate since December 1969. The latest figures comes against a backdrop of mixed signals for the U.S. economy. Equity markets are well down from early October, bond yields have fallen in recent weeks, businesses are showing caution in making big-ticket investments and concerns over global growth are mounting. But the driver of the U.S. economy—consumer spending—remains strong. And that is likely supported by improved wages and low unemployment. 

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US TRADE DEFICIT AT HIGHEST LEVEL IN 10 YEARS

The US trade deficit hit its widest level in a decade recently as the nation registered a record amount of imports and a decline in exports to China. The Department of Commerce said that the gap between US imports and exports grew 1.7 per cent month-over-month to $55.5bn, the most since October 2008 and the fifth straight month of deficit expansion. America’s goods trade deficit with China, which has come under a microscope amid a trade war between the world’s two largest economies, jumped to $43.1bn. 

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PLANT IN DETROIT GETS NEW LEASE OF LIFE

Fiat Chrysler Automobiles NV plans to convert an abandoned engine production plant in Detroit into a new factory to produce sport utility vehicles. Fiat Chrysler will revive a factory that has been closed since 2012 in a move that could create between 100 and 400 jobs. The new plant will be the first to open in Detroit in 27 years. News of a forthcoming plant in Detroit comes after General Motors announced that it plans to slash 15,000 jobs and close manufacturing sites in, Ohio, Michigan, Maryland and Canada. 

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