February 1, 2018 / 8:23 AM / 10 months ago

Daily Briefing: Warsaw defies U.S. and Israel on Holocaust bill

LONDON (Reuters) - Polish lawmakers overnight brushed aside U.S. and Israeli concerns to approve draft legislation penalising suggestions of any complicity by Poland in the Nazi Holocaust on its soil during World War Two.

FILE PHOTO: A sign reading 'Stop!' in German and Polish is seen at the former Nazi German concentration and extermination camp Auschwitz, during the ceremonies marking the 73rd anniversary of the liberation of the camp and International Holocaust Victims Remembrance Day, in Oswiecim, Poland, January 27, 2018

Poland has long fought against the use of the phrase “Polish death camps”, pointing out the camps were built and operated by the Nazis after Germany’s 1939 invasion of Poland. Now the ruling Law and Justice party is making use of the phrase a prisonable offence as part of its campaign to fuel a rebirth of patriotism. Critics of the bill say it amounts to a worrying first step towards revisionism and the U.S. State Department warned it could have consequences for ties with Warsaw if the bill becomes law. The draft will now be sent to President Andrzej Duda for a final signature.

Interesting noises are coming out of this week's encounter between Italy's 5-Star anti-establishment party and investors at a private club in London's exclusive Knightsbridge district. One source at the meeting said party leader Luigi Di Maio went as far as suggesting on Wednesday he would be willing to govern with mainstream parties if a March 4 election produces no clear winner, something that would allay nerves on financial markets about a hung parliament after the vote.

Di Maio later denied he had said he would make post-election alliances but did confirm he would be willing to negotiate with them on policies. So far a centre-right alliance of Silvio Berlusconi’s Forza Italia, the Northern League and the smaller, far-right Brothers of Italy is seen winning most seats at the election but probably falling short of a majority.

As PM Theresa May continues her visit to China, there are more rumblings at home with a media report that one of her ministers is preparing to resign and publicly denounce her - a move that could in turn flush out her other internal critics and trigger a leadership contest. The unidentified minister is angry at May's failure in her most recent reshuffle to promote younger lawmakers to top jobs, The Sun newspaper reported.


After a wobbly end to one of the best opening four weeks of a year on record, global stock markets look to be stabilising and most of the week’s big hurdles have been leaped so far without major surprises. After its first two consecutive daily losses for the year, the S&P500 ended slightly in the black on Wednesday and it remains the longest period in its history without a 5 percent pullback.

Janet Yellen’s last meeting as Federal Reserve chair did nothing to scare the horses even though the Fed did nod to a pickup in inflation going forward and cemented market expectations for a March interest rate rise – the first of what is now seen as at least 3 rate hikes in 2018. The dollar and U.S. 10- year bond yields were firmer as a result, with the 2-10 year yield steady despite another dip in the 5-30 year horizon. While Fed tightening is the direction of travel, there will be few new indications on the speed of that trajectory as Jerome Powell takes the chair for the first time next month.  

But other worries this week have eased somewhat. President Trump’s State of the Union speech late Tuesday was less bellicose about world trade and protectionism than many had feared – preferring to push his $1.5 trillion infrastructure spending plans up the agenda instead – and private sector U.S. job readings on Wednesday indicated another above-forecast month for hiring in January as we await Friday’s payrolls release.

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The other big concern of the week was earnings reports from the big U.S. tech giants. So far, Facebook stock moved higher in after-hours trade on Wednesday, after an initial dip, as upbeat advertising projections outshone ebbing user numbers. Microsoft stock was also up after the bell on optimism about growth in its cloud computing business. Apple, Alphabet and Amazon report later today. Boeing’s positive quarterly report, meantime, kept the Dow Jones in positive territory overnight.  

Asia bourses were mixed overnight, with Japan’s Nikkei rebounding more than 1 percent but Shanghai and HK shares ending lower despite upbeat Chinese manufacturing numbers. Sterling was steady to a touch lower despite data showing British house prices grew more strongly than expected last month. There were also some concerns about the health of the UK state contractors sector as Capita shares plunged on Wednesday following a profits warning, echoing worries surrounding the collapse of Carillion last month. European stock indices were expected to open about half a percent higher as the earnings season picked up steam there and the euro eased back against the dollar.

German government bond yields continue to nudge higher in sympathy with Treasuries, with the 10-year bund yield hitting 2-year highs above 0.7 percent early on Thursday. The spike came despite comments yesterday from European Central Bank board member Coeure that the ECB would not be hasty in halting its bond buying programme as inflation is still not moving decisively toward its target. ECB chief economist Praet speaks later today.

Editing by Gareth Jones

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