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Business

European stocks surge as cyclicals rally, U.S. jobs data awaited

(Reuters) – European shares climbed on Thursday as encouraging economic data from across the globe and hopes of a COVID-19 vaccine lifted sentiment ahead of the crucial U.S. jobs data.

The pan-European STOXX 600 rose 1.2% to mark its fourth consecutive day of gains. Banks .SX7P, automakers .SXAP and travel & leisure .SXTP firms were the top gainers, jumping between 2.7% and 3.4%.

Financial markets entered the second half of the year on a cheerful note earlier this week, as business surveys showed a coronavirus-induced slump in global manufacturing eased in June.

Adding to optimism, a COVID-19 vaccine developed by German biotech firm BioNTech (BNTX.O) and U.S. pharmaceutical giant Pfizer (PFE.N) was found to be well-tolerated in early stage human trials.

All eyes are on the U.S. payrolls data, due at 1230 pm GMT. Economists have estimated that job numbers rose by 3 million in June, rebounding further after a historic 20.69 million plunge in April.

However, a spike in U.S. infections fuelled uncertainty.

New U.S. cases of COVID-19 jumped nearly 50,000 on Wednesday, according to a Reuters tally, marking the biggest one-day rise since the start of the pandemic.

“Given the ongoing threat from stubbornly rising infection numbers in key U.S. states, there seems to be little potential for the labour market report to produce a distinct upward push to the general market sentiment, as it did four weeks ago,” UniCredit analysts wrote in a note.

The end of the lockdown failed to bring a surge in employment in Spain as data showed that the 900,000 jobs lost at the peak of the pandemic had not been regained.

Among individual movers, Associated British Foods (ABF.L) jumped 7.3% after saying trading in its Primark fashion stores that reopened after the lockdown has been “reassuring and encouraging”.

German fashion house Hugo Boss (BOSSn.DE) rose 2.6% after it appointed Tommy Hilfiger executive Oliver Timm as its chief sales officer.

Scandal-hit Wirecard (WDIG.DE) slumped 27.1% after police and public prosecutors raided its headquarters in Munich and four properties in Germany and Austria.

Cardboard maker DS Smith (SMDS.L) fell 7.3% after saying it was too early to resume dividends in the short-term due to market uncertainty caused by the pandemic.

Dutch construction company BAM Groep (BAMN.AS) dropped 11.6% as it warned of a “significant” loss in the first half of the year.

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Economy

Negative-yielding corporate bond pile triples in June from May- Tradeweb

AMSTERDAM, July 1 (Reuters) – The market value of negative-yielding European investment-grade corporate bonds tripled in June from a month earlier, data from bond trading platform Tradeweb on Wednesday showed.

Nearly 10% or 332 billion euros of the 3.39 trillion euro corporate investment-grade bonds on the platform traded with a negative-yield at the end of June, the highest since March, Tradeweb said. That compared with 99 billion euros in May.

The pool of negative-yielding government bonds in the euro zone also rose, to its highest since February, at 5.24 trillion euros or 61% of the total 8.6 trillion euro market, Tradeweb data showed. That was up from 4.73 trillion euros in May.

In Britain, the pile of negative-yielding government bonds rose to 1.17 trillion pounds as of end-June, or 48% of the total market, versus 1.07 trillion pounds in May. (Reporting by Yoruk Bahceli; Editing by Dhara Ranasinghe)

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World News

Germany arrests far-right suspect over threat to attack Muslims

Police find weapons in house of 21-year-old man who was inspired by last year’s Christchurch massacre in New Zealand.

Police in Germany has arrested a man on suspicion of planning to kill Muslims in an attack inspired by the 2019 massacre in two Christchurch, New Zealand, mosques, according to prosecutors.

The 21-year-old from the northern city of Hildesheim had announced his attack plans “in an anonymous internet chat”, the state prosecutor’s office in the town of Celle said on Monday.

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Initial investigations show the suspect “has for some time been considering the idea of committing an attack in which he wanted to kill numerous people in order to attract worldwide media attention”, prosecutors said.

The suspect referenced the Christchurch attacker, who killed 51 people in two mosques in March 2019, and said he wanted to carry out a similar attack.

“His aim was to kill Muslims,” prosecutors said.

Weapons found

Police found weapons in the suspect’s home, as well as electronic files containing far-right content.

He was arrested on Saturday and faces charges of threatening to commit criminal offences and financing violence through the purchase of weapons.

Germany has been rocked by a string of far-right attacks over the past 12 months.

A gunman with apparent far-right beliefs killed nine people at a shisha bar and a cafe in the city of Hanau, near Frankfurt, in February, while two people were killed in an attack on a synagogue in Halle, near Leipzig, in October.

In June 2019, pro-immigration politician Walter Lubcke was found shot dead at his home in the central state of Hesse, and a far-right sympathiser has been charged with his murder.

Interior Minister Horst Seehofer proclaimed in March that far-right violence was “the biggest danger for democracy in Germany”, promising a beefed-up security response.


Inside Story

Is the far-right shaping the EU’s migration policy?

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World News

Duda to face Warsaw mayor in Poland's presidential runoff vote

Incumbent president secures 43.7 percent of votes while runner-up Trzaskowski has 30.3 percent, official results show.

Conservative incumbent Andrzej Duda has secured the top position in Poland’s presidential election and will face Warsaw’s liberal mayor in the runoff next month, according to official results.

Duda, who is backed by the governing Law and Justice (PiS) party, won 43.7 percent of the ballot with more than 99 percent of polling stations counted, the national election commission said on Monday.

Runner-up Rafal Trzaskowski had 30.3 percent, taking the Civic Platform (PO) party member into round two of the election on July 12.

Independent candidate Rafal Holownia came in third with 13.9 percent. None of the other eight candidates topped 10 percent.

Turnout was 64.4 percent. The commission said it will release the final results early on Tuesday at the latest. 

The electoral campaign was dominated by concerns over an erosion of democratic rights and bread-and-butter economic issues.

Poland is facing its first recession since the end of communism because of the coronavirus pandemic fallout.

The election was scheduled to be held in May but had to be postponed because of the virus outbreak.

‘Ideology’

PiS has cast Duda as the guardian of its generous welfare programmes, which have helped it win national elections in 2015 and 2019, and of its pledge to protect traditional family values in predominantly Catholic Poland.

A devout believer himself, Duda had campaigned on a promise to ban classes about gay rights in schools, saying LGBT “ideology” was worse than communist doctrine.

“The campaign goes on because Poland needs it,” Duda told jubilant supporters in the central town of Lowicz. “Some people have a complex and think we are not Europeans. We are, and have been … since we converted to Christianity.”

But his long-held lead crumbled in the weeks before the election after a late entry by Trzaskowski, who appears to have galvanised many voters eager to end Poland’s isolation within the European Union or angry over Duda’s allegiance to PiS.


The Listening Post

A tale of two brothers: Poland, politics, and the press

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World News

Hungary mourns post-WWI 'dismemberment', 100 years on

Hungarians mark a centenary of the dissolution of the Austro-Hungarian empire in 1920, with flags at half-mast.

Hungary is marking a centenary of the dissolution of the Austro-Hungarian Empire on June 4, 1920, with the country’s flags at half-mast.

It was on that day, soon after World War I, that a treaty was signed in the Trianon Palace in Versailles, France, defining Hungary’s new shrunken frontiers after the dissolution of the Austro-Hungarian empire.

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The date is carved into a triangular column marking the spot where the Hungarian, Romanian and Serbian borders meet.

Flags are at half-mast in the village of Kubekhaza, which is located beside the tri-border, Mayor Robert Molnar told AFP news agency.

“The Trianon borders split up villages and families,” Molnar said, pointing at church towers across the fields – each in a different country.

Hungary, as part of the defeated Austro-Hungarian Empire, was forced to sign away two-thirds of its territory, and half of its multi-ethnic population.

At a stroke, more than three million ethnic Hungarians – or Magyars – a third of the total, as well as key economic resources and several historic cities became part of neighbouring states.

‘Betrayed by the West’

“The great powers led by France unjustly punished Hungary, no matter the cost,” Csaba Pal Szabo, director of a state-financed Trianon Museum, told AFP at the museum’s archive in the city of Szeged near the Serbian border. “We were betrayed by the West.”

Szabo objects to what he says were unfairly drawn borders “not reflecting ethnic populations on the ground”.

Among the historical maps and memorabilia on display are 1920s propaganda material proclaiming “No! No! Never!” – and calling for territorial revision.

Hungary’s interwar leader Miklos Horthy later allied with Nazi Germany, partly in a bid to reclaim lost lands. But another treaty in 1947 confirmed the borders set out at Trianon.

During the subsequent four decades of communist rule, any mention of Trianon was taboo in case it riled fellow socialist states.

This was despite widespread discrimination endured by Magyar minorities, especially under Romanian leader Nicolae Ceausescu.

‘National Cohesion’

European Union membership for Hungary and most of its neighbours has since 2004 brought more cross-border freedom of movement. Even so, moving on from Trianon has proved difficult.

On coming to power in 2010, Orban adopted an assertive “national policy” aimed at uniting Hungarians after what he calls the “dismemberment”.

Orban, 57, swiftly declared June 4 a “Day of National Cohesion”, and has since sent lavish financial aid to schools, cultural and religious groups in the diaspora.

He also granted dual citizenship and voting rights to more than a million non-residents – many of whom have voted for his Fidesz party in Hungarian elections.

A “National Cohesion” monument is due to be unveiled in Budapest bearing the Hungarian-language names of villages, towns and cities in pre-WWI Greater Hungary.

After historians spotted that many of the localities listed on it were never populated by ethnic Hungarians, a government official denied the edifice expressed a desire to turn the clock back.

Orban’s fondness for Greater Hungary nostalgia encourages an idealised picture of relations between Hungarians and other ethnic groups before WW1, according to analysts, and appeals to ultra-nationalistic voters in particular.

In recent speeches, he has made what appear to be more conciliatory calls for regional cooperation to “build Central Europe”.


People & Power

Hungary: Europe’s Bad Boy

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World News

Poland begins voting in presidential election delayed by pandemic

Incumbent President Andrzej Duda is running for re-election that could weaken the country’s right-wing government.

Polish voters began casting their ballots on Sunday in round one of a tight presidential race that had to be postponed because of the coronavirus pandemic.

Incumbent Andrzej Duda, 48, is campaigning for re-election in a vote that could determine the future of the right-wing government that supports him.

Polling stations opened at 7am (05:00 GMT) and will close at 9pm (19:00 GMT) with an exit poll expected as soon as voting ends.

Ten candidates are vying to replace him, but opinion polls suggest that Warsaw Mayor Rafal Trzaskowski, a liberal from the main Civic Platform (PO) opposition party, will enter a neck-and-neck runoff on July 12.

Victory for Trzaskowski, also 48, would deal a heavy blow to the Law and Justice (PiS) government, which has relied on its ally Duda to endorse polarising legislation, especially judicial reforms.

While the PiS insists the changes are needed to weed out judicial corruption, critics and the European Union insist they erode judicial independence and democracy just three decades after Poland shed communism.

US President Donald Trump, who regards the populist PiS administration as a key European ally, gave Duda his blessing this week.

Trump invited him to the White House on Wednesday as the first foreign leader to visit since the coronavirus pandemic began, just four days ahead of election day. 

Originally scheduled for May, the ballot was postponed due to the pandemic and a new hybrid system of postal and conventional voting was put in place on Sunday in a bid to stem infections.

While official figures show at least 33,000 confirmed cases and more than 1,400 deaths, the health minister has admitted that there are likely up to 1.6 million undetected cases in Poland, an EU country of 38 million people.

Anti-gay rhetoric

Duda has promised to defend the governing party’s raft of popular social benefits, including a child allowance and extra pension payments – a key factor behind the populists winning a second term in October’s parliamentary election.

Bread and butter issues are weighing heavily on voters’ minds as the economic fallout of the pandemic is set to send Poland into its first recession since communism’s demise.

“I’m happy. I can’t complain; I get an extra pension payment and children are getting 500 zloty,” Irena, a 63-year-old pensioner, told AFP in the central Polish town of Minsk Mazowiecki.

“I’d like this to continue,” she added, declining to provide her surname.

Duda has also echoed PiS attacks on LGBT+ rights and Western values, something analysts see as a bid to attract voters backing a far-right candidate.

Campaigning with the slogan “Enough is Enough”, Trzaskowski promises to use the experience and contacts he gathered as a former European affairs minister to “fight hard” for a fair slice of the EU’s 2021-27 budget, and to repair tattered ties with Brussels.

He has, however, promised to keep the PiS’s popular welfare payments.

While many see his PO party as a weak and ineffectual opposition, Trzaskowski supporters regard him as a bulwark against the PiS’s drive to reform the courts, something they insist risks destroying any notion of an independent judiciary.

“I’m a lawyer and this (PiS justice reforms) affect me directly,” Marek, 60, told AFP in Minsk Mazowiecki, also declining to provide his surname.

“It’s as if a blacksmith would go to a watchmaker’s shop and try to put things in order. People might support it, but in the long run, these reforms will have to be reversed.”

‘Budapest model’

Since winning power in 2015, both Duda and the PiS have in many ways upended Polish politics by stoking tensions with the EU and wielding influence through state-owned companies and public broadcasters.

Some analysts view the election as a crucial juncture: a second five-year term for Duda would allow the PiS to make even more controversial changes while defeat could unravel the party’s power.

A win for Duda would pave the way to “bolstering ‘Eastern’ tendencies, like the rise of oligarchs … and a drift to the Budapest model (of Hungary’s Viktor Orban) – that’s the danger,” Warsaw University political scientist Anna Materska-Sosnowska told AFP.


The Listening Post

Poland: The EU’s media freedom conundrum

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World News

Leaders of Greece, Turkey discuss COVID-19 in rare call

Call between Mitsotakis and Erdogan focused on the consequences of coronavirus, issues relating to border reopening.

The leaders of Greece and Turkey held a rare phone conversation, after months of increasing tension between the two neighbouring countries. 

Greek Prime Minister Kyriakos Mitsotakis and Turkish President Recep Tayyip Erdogan on Friday addressed ways of handling the effects of the coronavirus pandemic, the reopening of borders and the re-establishment of tourist flows, a statement from Mitsotakis’s office said.

The two “agreed to maintain bilateral channels of communication open”, the statement read.

Erdogan’s office also said the leaders discussed tourism, security, as well as cooperation on economic issues and the battle against COVID-19.

A Greek source with knowledge of the meeting told The Associated Press news agency however that the two leaders did not discuss policy matters.

Discussions focused on broader talks within the European Union on the access of nationals from third countries when borders open to tourists. The official said Greece does not in principle object to supporting Turkey’s inclusion in the list of countries that would have access. 

Tensions between NATO allies Greece and Turkey have been high in recent months.

Athens has accused Ankara of using migrants to pressure it, after Turkey declared in late February that its  borders to the EU were open to all those who wanted to cross.

Thousands of migrants gathered at Turkey’s border with Greece, demanding to be allowed in.

Greece and Turkey are also at loggerheads over oil and gas exploration rights in the Mediterranean and over territorial issues in the Aegean Sea dividing the two countries.

The two have come to the brink of war three times since the mid-1970s.

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World News

Glasgow stabbing suspect killed after six people injured: UK

A stabbing incident is contained in central Glasgow, Scottish police confirm, saying a male suspect is shot dead.

Scottish police have said a male suspect had been shot dead in a stabbing incident in Glasgow’s city centre and that six people including a police officer had also been injured.

Police Scotland’s Assistant Chief Constable Steve Johnson said on Friday the situation was contained and the wider public was not at risk.

“I would like to reassure the public that at this time we are not looking for anyone else in relation to this incident.”

Police Scotland later said on Twitter that the suspect who was shot by armed police had died.

“Six other people are in hospital for treatment to their injuries including a police officer, who is in a critical but stable condition,” the statement said.

Earlier, the Scottish Police Federation, which represents Scottish police officers, said the family of the injured officer was notified.

Local media reports

UK’s Sky News broadcaster reported based on a witness account that at least three people were injured in the incident.

The witness said she had seen people covered in blood being treated by emergency services and armed police on the scene at about 12:15 GMT.

Meanwhile, the BBC reported three deaths. “It is believed three people have died after being stabbed in the stairwell of a hotel,” the public broadcaster said.

There is a heavy police presence on West George Street with more than a dozen police vehicles in attendance.

Images on social media appear to show armed police entering a building and a large number of emergency vehicles outside.

Scottish First Minister Nicola Sturgeon said the reports are “truly dreadful” and that she is being updated.

UK’s Prime Minister Boris Johnson said he was “saddened” by the incident.

“Deeply saddened by the terrible incident in Glasgow, my thoughts are with all the victims and their families,” Johnson said in a tweet. “Thank you to our brave emergency services who are responding.”

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World News

UK, EU kick off fourth round of post-Brexit trade talks

Trade negotiators from UK and EU begin four-day video conference to forge deal on future relations.

The European Union and the United Kingdom have kicked off a fourth round of talks on a post-Brexit trade deal and other aspects of their future relations.

The four-day negotiations by video conference began on Tuesday with officials trying to make headway after the last three rounds yielded little progress.

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The UK formally left the bloc on January 31 after a slim majority voted for Brexit in a 2016 referendum. Little has changed in practice during a planned 11-month transition period.

Prime Minister Boris Johnson has promised not to extend this period, despite a lack of progress in talks that have been overshadowed by the coronavirus crisis.

The end of June is the deadline for the UK to ask for more time for talks, and both sides are due to take stock of the progress so far.

No-deal Brexit

Johnson suggested the country would accept a “no-deal” Brexit if London and Brussels cannot agree on new trade rules by December 31.

Meanwhile, calls from British opposition politicians to request an extension are growing louder. London Mayor Sadiq Khan on Monday urged the government to “put political ideology aside”.

Michel Barnier, EU chief Brexit negotiator, told the Sunday Times the UK had failed to meet its commitments to the negotiations on future trade and other arrangements.

London had taken “a step back – two steps back, three steps back – from the original commitments,” he said.

The British side rejected these accusations and charged the EU with wanting to keep it bound by the bloc’s EU rules in future.


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Will Brexit break up the UK?

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