LONDON (Reuters) - George Soros' Open Society Foundations NGO has confirmed it will close its office in Budapest and move to Berlin after what it called a campaign of denigration and misrepresentation of its work by Viktor Orban's government.
The move, flagged by the pro-democracy group a few weeks back, comes a day after Orban’s government said it would be toughening up restrictions on NGOs.
A proposed bill would notably allow a ban on any NGOs active in the immigration field and deemed to pose a “national security risk”; it would also impose a 25 percent tax on foreign donations to NGOs that back migration. Such legislation would be in clear defiance of the values espoused by the EU - which will be under pressure to come up with a meaningful response.
It looks like it could take some time yet for Italy’s next government to be confirmed.
The president last night gave the League and 5-Star an open-ended extension to clinch a deal after both parties told him they were not yet ready to sign on the dotted line.
In addition, the League has said it will hold an informal referendum amongst its voters this coming weekend on any eventual deal. All this means a government is unlikely to be installed before next week.
There are a couple of important economic numbers today. German economic growth slowed slightly more than expected in the first quarter of the year, data just in show.
Interestingly, and not least because of a looming trade showdown with the U.S. which Berlin is desperate to avert, the main culprit was weak trade.
Second, UK labour data due at 0830 GMT will be scrutinised for any signs of a wage pick-up that would in turn facilitate a future rate hike. The figures will also include numbers on foreign workers in Britain, which can be a gauge of the Brexit impact on migration, and on productivity growth.
Surging oil prices were once again a driving force for world markets overnight, with Brent crude hitting another 3-1/2 year high of $78.53 before taking a breather early on Tuesday.
Spurred on by the prospect of renewed U.S. sanctions on Iran and rising political tensions across the Middle East, the oil price rise has some analysts talking about $100 per barrel once again and puts some pressure on next month’s OPEC meeting to ease up on supply restrictions as the long-standing glut evaporates.
For the rest of world markets, energy price rises of more than 50 percent year-on-year are nudging benchmark long-term interest rates back higher again and 10-year U.S. Treasury yields have topped 3 percent again as a result – just shy of last month’s 4-1/2-year peak and the 2013 high of 3.0410 percent.
The impact of oil prices on the U.S. dollar has also shifted in recent years as the U.S. rapidly approaches the status of a net oil exporter and higher crude now may be adding a bid to the dollar relative to currencies of the big energy import regions of the euro zone and Japan.
This and the combination of higher U.S. yields has boosted the greenback again overnight against the major currencies but especially against the most vulnerable emerging market units.
Despite the prospect of a precautionary IMF financing agreement with Buenos Aires and 40 percent central bank interest rates, the Argentine peso plummeted another 8 percent overnight.
Turkey’s lira also plumbed new record depths early on Tuesday after Turkey’s President Erdogan alarmed world markets yet again by saying he plans to take greater control of the economy after presidential elections next month and that the central bank will have to take note of what the president says and act accordingly.
For world equity markets, the oil price has helped lift energy sector stocks with Wall St indices eking out narrow gains late Monday even if futures have reversed as bond yields climbed overnight.
China’s latest sweep of economic numbers showed industrial production ahead of estimates but were offset by signs of slowing retail and investment activity.
In Europe, stock markets were set for a lower open, with heavy slate of economic numbers.
Germany’s GDP figures showed Europe’s biggest economy slowed slightly more than expected in the first quarter due to weak trade – adding to a string of weaker macro data from the region.
Later on Tuesday we get Germany’s ZEW for May, UK jobs numbers for April and U.S. retail sales.
Italian markets remain calm as the saga of Italy’s government formation continues, after parties 5-Star and League won more time to decide on a prime minister.
Italy’s 10-year bond yields have risen to the highest in almost two months although debt spreads with Germany remain little changed. Italian stocks were firmer on Monday but may reverse that later.
A look at the day ahead from European Economics and Politics Editor Mark John and EMEA markets editor Mike Dolan. The views expressed are their own.