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A construction crew works on replacing the US-Mexico border fence as seen from Tijuana, in Baja California state, Mexico, on January 9, 2019.

Guillermo Arias | AFP | Getty Images

A construction crew works on replacing the US-Mexico border fence as seen from Tijuana, in Baja California state, Mexico, on January 9, 2019.

Congressional negotiators said the reached a deal in principle Monday to fund the government and avoid another shutdown.

As always, President Donald Trump will hold the fate of any potential agreement in his hands.

If passed, the spending plan would keep the government running past a Feb. 15 deadline. It would avoid reopening fresh wounds of the 800,000 federal workers who missed two paychecks during a 35-day partial closure in December and January.

The measure’s passage depends on Trump’s support. Funding lapsed in December after the president threatened to veto any plan that did not include $5.7 billion to build his proposed border wall — and deterred GOP lawmakers from voting to keep the government open.

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Over 400,000 advised to evacuate as tropical storm Krosa hits Japan



Railway employees assist stranded passengers at the Hakata Shinkansen station in the city of Fukuoka on August 14, 2019.

Jiji Press | AFP | Getty Images

Heavy rains lashed parts of western Japan on Thursday as tropical storm Krosa bore down on the country, forcing the cancellations of hundreds of flights and trains as authorities advised more than 400,000 people to evacuate.

Krosa, a Khmer word for crane, was heading northeast towards the smallest Japanese main island of Shikoku with sustained winds of 108 km per hour (67 mph) and gusts up to 162 km per hour (100 mph), with landfall likely in early afternoon, the Japan Meteorological Agency said.

Authorities warned that the total rainfall in some areas could surpass 1,000 mm (39 inches) over 24 hours to Friday morning and advised some 446,000 people to evacuate, but as of Thursday morning there were no reports of major flooding and only a handful of minor injuries.

“Given the predictions of record rains and high winds, we’d like to ask people in the affected areas to avoid going outside if they can, and to make early preparations to evacuate if needed according to directions of the local authorities,” Yoshihide Suga, chief cabinet secretary, told a news conference.

Eighteen people, including a baby, became trapped on Wednesday when a river rose suddenly as they were having an barbecue. None were injured and preparations for their rescue were being made on Thursday morning.

The Shinkansen bullet train service was halted in one part of western Japan, as were all local train lines, and several highways were closed. A total of 679 flights were cancelled, NHK national television said, snarling travel plans for thousands at the end of Japan’s main summer holiday period.

“My flight got cancelled today, and without any trains running, there isn’t anything I can do,” one man told NHK.

More than 200 people died in torrential rains and flooding in parts of western Japan in 2018, areas that could also be hit by severe rains from Krosa.

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Saudi Arabia dramatically changing its oil exports to China and the US



A worker stands at a pipeline, watching a flare stack at the Saudi Aramco oil field complex facilities in Shaybah, Saudi Arabia.

Reza/Getty Images

Saudi Arabia has seriously ramped up its oil exports to China in recent months.

How dramatic is the change? Take a look at this graph, which uses data from oil tanker tracking firm TankerTrackers.

The Saudi Kingdom’s crude shipments to China have doubled in the span of a year. During the same period, its oil exports to the U.S. have dropped by nearly two-thirds.

According to TankerTrackers, which tracks oil tankers and shipments based on satellite imagery and ships’ automatic identification systems, Saudi Arabia exported a whopping 1,802,788 barrels per day (bpd) to China in July, compared to 921,811 bpd in August of 2018. By contrast, exports to the U.S. in July were 262,053 bpd, nearly 62% down from 687,946 bpd in August of last year.

U.S. sanctions on Iranian oil have helped the shift. Major Asian energy importers like China have been forced to shift business away from the Islamic Republic — OPEC’s third-largest producer — and start buying more Saudi barrels to make up for that shortfall.

The U.S. is now more self-reliant than ever, thanks to its own shale oil revolution, which helped it become the world’s largest oil producer by the end of last year.

But the numbers also signal a mix of short-term tactics and long-term strategy for the Saudis, industry experts told CNBC.

Saudis ‘slam on the brakes’ to the U.S.

“Saudi Arabia learned from the last OPEC production cut in 2017 that they got the biggest bang for their buck by cutting flows to the largest, most transparent and most timely market — the U.S.,” said Matt Smith, director of commodity research at commodities analytics firm ClipperData, referring to the coordinated production cut that OPEC and its allies orchestrated to put a floor under falling oil prices.

“Choking back on flows to the U.S. was the best way to draw down inventories and turn around bearish sentiment, and they are employing the same tactic once again.”

ClipperData’s figures, which differ from that of TankerTrackers due to different tracking methods, still show U.S. imports of Saudi crude in July down over 60% from last October.

Meanwhile, Smith said, as Saudi Arabia “slams on the brakes to the most transparent market, it is sending more crude into the most opaque one, China.”

This is where some industry analysts say Riyadh is employing short-term tactics: “impacting what remains the most visible and closely-watched market indicator, U.S. crude stocks,” Antoine Halff, co-founder of energy market analytics firm Kayrros, told CNBC.

The market has largely traded on weekly U.S. numbers, which — up until the growth of satellite imagery to provide greater transparency on global stocks — provided the best available picture of market conditions.

In spite of the greater availability of global market inventory thanks to satellite data, “the goal of impacting the U.S. stock metric seems to remain very real for OPEC in general and the Kingdom in particular,” Halff said. “Rightly or wrongly, this is the benchmark that everybody watches.”

China, oh the other hand, is not as forthcoming as OECD countries about its stocks, and it’s data isn’t as visible to the market. Halff notes that there is no established benchmark of Chinese stocks as there is for the U.S.

“Producers are far less concerned about building Chinese stocks than they are about building U.S. or OECD stocks in terms of what that may signal to the market,” he said.

China, the ‘savvy buyer’

While TankerTrackers co-founder Samir Madani has described China as a sort of “black hole” for the world’s oil exports, other oil analysts see a clear strategy from Beijing.

“The Chinese are very savvy and astute buyers, exporters who supply them have very good reasons to do so,” Halff said. In the current low oil price climate, the world’s largest oil importer is happy to up its Saudi crude purchases as its appetite increases, particularly given its launch of two new refineries which will grow its refining capacity by 800,000 bpd.

Employees close a valve of a pipe at a PetroChina refinery in Lanzhou, Gansu province.

Stringer | Reuters

In the months following President Donald Trump’s imposition of unilateral sanctions on Iran after withdrawing from the 2015 Iranian nuclear deal, data shows a dramatic run-up in Chinese crude imports and crude inventories. This is “thanks in part, once again, to the availability of Saudi barrels,” Halff added, “whether for precautionary reasons, out of price opportunism, or in preparation for new refining capacity coming online — or all of the above.”

Saudi Arabia’s long game in Asia

Locking in Asian market share is also a key long-term goal for Riyadh, as it is for other regional producers competing to capture downstream capacity across the continent. Saudi Aramco’s plan to acquire a 20% stake in Indian refining and petrochemicals giant Reliance is the most recent example of this.

Conveniently for the Saudis, there’s also no risk of losing the U.S. as a customer, thanks to its giant Aramco-owned Motiva refinery in Texas. Therefore, “Aramco is willing to increase or decrease to the U.S. based on its own needs,” says Ellen Wald, President of Transversal Consulting and author of the book “Saudi, Inc.”

With China, on the other hand, Aramco will meet customer demand when asked because it wants to maintain that relationship, she told CNBC in an email.

“In short,” she said, “Aramco is just fine increasing or decreasing its exports to the United States based on its own needs but in China it wants to fill demand based on the customers’ requests.”

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Mark Zandi says Trump is wrong on US economy impact



President Donald Trump speaks to members of the press prior to his departure on Marine One from the South Lawn of the White House in Washington, DC., on Friday, August 9, 2019.

Cheriss May | NurPhoto | Getty Images

U.S. President Donald Trump recently claimed Washington’s trade war with China has had little impact on the American economy so far. A widely followed economist said Thursday that the president is “dead wrong.”

Trump said in a Wednesday Twitter post that the U.S. is “winning, big, time against China,” adding that “prices to us have not gone up, and in some cases, have come down.”

However, according to Mark Zandi, chief economist at Moody’s Analytics and a frequent critic of the Republican president, the “economic costs are mounting” in the U.S.

“To argue that this isn’t doing economic damage is just wrong,” Zandi told CNBC’s “Squawk Box” on Thursday.

If Trump were to follow through on his outstanding tariff threats, Zandi said, it would incur a cost of $100 billion for American businesses and consumers in the coming year.

“That’s half a percent of (gross domestic product), that’s about half the tax cut that Americans got last year,” the economist said. “That’s very significant.”

To argue that this isn’t doing economic damage is just wrong

Mark Zandi

chief economist at Moody’s Analytics

At some point, Zandi said, Trump is likely to realize that the hard-line stance on China in the trade war “isn’t working” and so the president will desire a “face-saving way” out of the situation.

“The question is, will (Chinese) President Xi (Jinping) give him the way out? ” Zandi asked.

“If I were President Xi, I’d be sitting here thinking: ‘Well, you know, there’s some odds this president is not gonna be president … in a year and a half and I may be dealing with somebody else.””

In a protracted trade fight that has lasted for more than a year, the U.S. and China have already slapped tariffs on billions of dollars worth of each other’s goods, rattling markets across the globe and raising concerns about the outlook for the global economy.

‘We’re almost there’

The tariff battle has already taken a toll on business sentiment, Zandi said: “All over the globe … business investment, (capital expenditure), has flat lined since the trade war began about a year ago.”

That negative hit is likely to be seen next in the jobs sector, he projected.

“It’s starting to show up in places like manufacturing, transportation, distribution,” he said. “If it metastasizes, and other businesses and other sectors of the economy start to pull back on hiring and unemployment starts to rise, well that’s recession.”

Drawing a comparison between 2018 jobs figures and those of 2019 so far, the economist said: “Last year, average monthly job growth in the United States was close to 225,000 … in the last three to six months, cutting through the volatility of the data, job growth is 140,000 per month.”

If that figure slips below 100,000 per month, he added: “Unemployment will start to rise.”

Zandi said the U.S. stood on the brink: “We’re almost there, we’re headed in that direction.”

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