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#MoneyBeat WSJ City PM: Trump Axes Tillerson, the UK Economy’s Modest Upgrade, Russia Defiant Over Ex-Spy Probe

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Good afternoon from the WSJ City desks in London. WSJ City is the app that delivers concise, smart news on business and finance for mobile. Download for iPhone or Android. Here’s essential reading on today’s developments.


The dollar fell after President Donald Trump said that Rex Tillerson is out as secretary of state, after months of speculation over his fate. Trump also said that Central Intelligence Agency Director Mike Pompeo would be nominated to be the US’s top diplomat. The president announced the changes in a morning tweet. Trump later called Tillerson a ‘very good man’ but said that they disagreed on policy, notably the 2015 Iran nuclear deal. In a separate move, Trump’s PA was also escorted from the White House on Monday.

UK Chancellor Philip Hammond delivered slightly more optimistic forecasts for the UK economy in his stripped-down Spring Statement. However, the UK was among the weakest performers in the Group of Seven advanced economies in 2017 and is forecast to grow slower than many of its peers in the years ahead as uncertainty over the country’s future ties to the EU weigh on activity and investment.

Russian Foreign Minister Sergei Lavrov said Moscow would only cooperate with the UK’s investigation into the nerve-agent poisoning of a former spy if London supplied the substance in question and opened up the probe to Russian officials.

February’s sharp fall in stocks has faded, with the S&P 500 only 3% below its January peak and up 4% for the year. The rise in Treasury yields has paused and corporate-bond spreads are still tight. But now isn’t the time to get comfortable, writes Richard Barley for Heard on the Street.

Bank of America became the first big US bank to reveal how much more its CEO makes than its typical employee, in line with regulations that require US publicly traded firms to divulge their median employee pay in addition to CEO pay, and the ratio between the two. BoA Chief Executive Brian Moynihan earned $23 million, 250 times as much as the median employee at the bank.

Beijing has told global fund managers that have recently started operating independently in China that they can’t offer products that invest in global markets to wealthy local customers, according to executives from two global firms. Why This Matters: The verbal instruction given to foreign money managers is the latest example both of Beijing’s determination to support its domestic financial markets, and of its continued wariness of rapid capital flight from the country.

US tax cuts and government spending increases will likely deliver a boost to global economic growth this year and next, but that could be offset by an escalation of trade tensions, the Organization for Economic Cooperation and Development said.


UK Treasury Looks to Sell £7.4 Billion Help to Buy Loan BookFinancial Times (£)

Volkswagen Vows to Overtake Tesla – The Wall Street Journal

May Set to Talk to Trump Over Chemical Attack – Bloomberg

Stormy Daniels Seeks New Judge in Trump Lawsuit – The Wall Street Journal

Norway Underlines Faith in London with Unlisted Property Bets – Reuters


The dollar and US government bond yields slipped after reports that Rex Tillerson had been replaced as Secretary of State and after the release of data that showed US consumer prices rose modestly in February.

The WSJ Dollar Index, which measures the dollar against a basket of currencies, was recently 0.2% down on the day, having earlier traded higher.

By early afternoon, US stocks lost early gains. The Dow Jones Industrial Average was flat, the S&P 500 was down 0.1% and the Nasdaq Composite, which has been powered higher by technology shares over the past month, fell 0.5% in the red. Equities had initially reacted positively to the inflation data.

European shares closed 1% down on the day, snapping the Stoxx Europe 600′s longest winning streak since early October. The UK’s FTSE 100 was also down 1%.

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