All the latest economic news, including the second estimate of America’s GDP at 1.30pm BST and Fed chair Janet Yellen at Harvard * Latest: IMF criticises neoliberalism * Introduction: US GDP, Yellen speech, and Putin... * G7 leaders warn on global growth 12.16pm BST GREECE IS PREPARES TO WELCOME RUSSIAN PRESIDENT VLADIMIR PUTIN, AMID TIGHT SECURITY AND FEARS THAT THE VISIT WILL CAUSE RUCTIONS WITHIN THE EU. Putin’s visit is billed as a way of deepening economic and diplomatic ties between the two countries. He’ll be discussing trade, energy and transport issues, and meeting with President Prokopis Pavlopoulos and Prime Minister Alexis Tsipras. 2.500 police officers in #Athens - Tight security measures ahead of the visit of #Russian President Vladimir #Putin https://t.co/LIfjqM0Hl4 Moscow is primarily interested in buying state-run railway operator Trainose and a stake in Thessaloniki port, the country’s second largest, as Putin reiterated in a commentary for Kathimerini published on Thursday ahead of the visit. He also said that Russia – Greece’s main gas supplier – is still very much interested in reviving the South Stream gas pipeline project. “The extreme political and economic disruption Greece has experienced, in combination with existing cultural ties, make it a particularly attractive target for these kind of initiatives. “Fundamentally these overtures are about sowing division and discord among the EU states in order to undermine the sanctions regime and, over the longer term, the EU as a whole.” Vladimir #Putin expected in Athens at 3.30pm local, to sign bilateral agreements. Visits Mt Athos Saturday. More @Monocle24 soon #Greece Putin due in Athens today, with foreign minister & businessmen. Off to Mt Athos on Saturda https://t.co/ekh8vmTfcd #Greece #Russia 11.51am BST Resolution’s DUNCAN WELDON has now blogged about the IMF paper on the problems with neoliberal economics. He explains that it’s part of a wider change of thinking at the Fund, away from the “Washington consensus” that dominated thinking before the wheels came off the global economy in 2008. Excessive fiscal tightening in countries that still have fiscal space simply hasn’t worked as promised. There are plenty of countries with ample fiscal space that haven’t used it and the world economy has suffered as a result. In this respect the Fund; move towards backing capital controls is a consequences of the failure of Western fiscal policy makers to do enough to support growth and the unwillingness of Western monetary policy makers to take into account the global consequences of their actions. A 3 minute read on "that" IMF article & why it's basically driven by advanced economy policymakers messing up: https://t.co/FuzbQk8ZNO 11.11am BST Jonathan Ostry, the IMF economist who co-wrote its critique of neoliberalism, is hoping to trigger a new debate about economic orthodoxy. The Financial Times has the details: In an interview, Jonathan Ostry, deputy director of the IMF’s research department and the article’s lead author, said the new piece was not meant as an attack on “the entire neoliberal agenda or the Washington consensus”. But he hoped it would set the stage for a broader examination of “neoliberalism” that would come out this year. It also fitted, he argued, with work on everything from austerity and inequality to debt and the desirability of open capital accounts that he and others have been publishing since the 2008 financial crisis — and with a growing sentiment in the broader economics community. 10.29am BST NEOLIBERAL ECONOMICS HAS ATTRACTED PLENTY OF CRITICS OVER THE YEARS, AS THE IMPACT OF PRIVATISATIONS, SHRINKING THE STATE AND AUSTERITY MEASURES HAS BECOME CLEAR. And now, a team at the International Monetary Fund have delivered a remarkable attack on the consequences of neoliberalism. Is there really a defensible case for countries like Germany, the United Kingdom, or the United States to pay down the public debt? Austerity policies not only generate substantial welfare costs due to supply-side channels, they also hurt demand—and thus worsen employment and unemployment. IMF admits neoliberalism is a failure. So all the billionaires it created are going to give back their money, right? https://t.co/CEd4t47Ws3 File under: 1. Continuing shift against open capital accounts. 2. Left attitude to the IMF being about a decade out of date. 9.28am BST MIKE VAN DULKEN OF ACCENDO MARKETS WONDER IF YELLEN MIGHT PLAY IT COOL AT HARVARD: In focus today will likely be Fed Chair Yellen’s speech after the European close, especially after her colleagues (mostly non-voters) were out in force this week swaying expectations about a Summer rate hike. Note, however, Yellen is only receiving an award from Harvard so may well swerve explicit mention of US monetary policy to avoid adding fuel to the fire. 9.17am BST Janet Yellen’s comments may not come until around 5.30pm BST, or later. She’s due to speak at a lunch at Harvard, along with her predecessor Ben Bernanke. More details here. 9.06am BST JANET YELLEN COULD MOVE THE MARKETS TODAY, WHEN SHE VISITS HARVARD TO COLLECT THE RADCLIFFE MEDAL IN RECOGNITION OF HER WORK. FXTM RESEARCH ANALYST LUKMAN OTUNUGA says investors will be watching the Fed chair closely, for any hints that a rate hike could be close. Sentiment towards the US economy has improved this month with an impressive array of domestic data bolstering speculation that US rates could be increased in June or July. With retail sales, inflation and new homes sales exceeding forecasts, the prerequisites for another US rate hike in Q2 could be fulfilled if US GDP and next week’s NFP exceed expectations. Yellen’s comments could act as a catalyst today for Dollar bulls to rampage if she chants the same hawkish tune as the other board governors. Although the CME group Fedwatch tool displays a 26% probability that a June hike could occur, concerns over slowing global growth and persistent China woes may also disrupt the Fed’s efforts to take action. 9.01am BST EUROPE’S STOCK MARKETS ARE OPEN, BUT FRANKLY THERE’S LITTLE HAPPENING OUT THERE. The main indices are all broadly unchanged, as investors wait for the US growth figures at 1.30pm BST. Commodity stocks are still finding favour, helped in no small part by US dollar weakness amidst the idea that the Fed may not be in a position to hike rates next month as had been earlier thought. 8.48am BST A GLIMMER OF GOOD NEWS FROM ACROSS THE CHANNEL. French consumer confidence has hit its highest level since October 2007, when the world economy was reeling from the credit crunch. French shoppers are having their best month since the financial crisis https://t.co/IlsPshgm2P pic.twitter.com/0Ywl8x0Iae Striking French workers continued to disrupt oil refineries and nuclear power stations, halted some air traffic and trains and prevented almost all national newspapers from printing in the growing industrial action. Union activists blocked roads and bridges in northern France while some train drivers and air traffic controllers joined the action. Related: Riot police crack down on Paris protests against labour reforms 8.43am BST WORLD LEADERS AT THE G7 MEETING IN TOKYO HAVE DECLARED THAT GLOBAL GROWTH IS THEIR “URGENT PRIORITY”, BUT NOT ACTUALLY ANNOUNCED ANY NEW MEASURES TO DEAL WITH IT. The official declaration following the meeting declares: Global growth remains moderate and below potential, while risks of weak growth persist..... G7 world leaders declare: "UK exit from the EU..serious risk to growth" "would reverse trend towards greater trade" pic.twitter.com/hYifbvqw4x 8.32am BST JAPAN’S STOCK MARKET HAS GAINED GROUND TODAY, FOLLOWING REPORTS THAT PRIME MINISTER SHINZO ABE IS CONSIDERING POSTPONING ONE OF HIS FLAGSHIP POLICIES. Abe dropped a broad hint earlier today that the planned hike in sales tax could be delayed. “We must reignite powerfully the engine of Abenomics. That undoubtedly would include a decision on what to do with the sales tax hike.” #Japan's Nikkei ends up 0.4% at 16834.84 on reports Abe will delay hike to sales tax. pic.twitter.com/vXm8ZMFDdv 8.13am BST GOOD MORNING, AND WELCOME TO OUR ROLLING COVERAGE OF THE WORLD ECONOMY, THE FINANCIAL MARKETS, THE EUROZONE AND BUSINESS. It’s Friday, and it’s a bit quiet. But there are still a few events coming up that might get the blood pumping. Yellen speaks at Harvard’s Radcliffe Day, where she will engage in “a conversation about her groundbreaking achievements.” The widespread expectation is, of course, that she will reiterate the more hawkish line taken by almost all recent Fed speakers. Related: G7 summit: Obama makes historic visit to Hiroshima – live Continue reading...
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