Good morning! Here’s what you need to know:
Obama Authorizes Strikes On ISIS. “President Barack Obama outlined a new, expanded strategy to “degrade and ultimately destroy” the extremist group calling itself the Islamic State (also know as ISIS or ISIL) with a primetime speech Wednesday night,” reported BI’s Brett Logiurato and Hunter Walker. “In his remarks, Obama broke his plan down into four key parts: ‘a systematic campaign of airstrikes against these terrorists,’ providing ‘support to forces fighting these terrorists on the ground,’ stepped up counterterrorism efforts to ‘prevent ISIL attacks,’ and continued ‘humanitarian assistance to innocent civilians who have been displaced by this terrorist organisation.'”
A Problematic Analogy. Obama compared his plan to strategies targeting terrorist groups in Somalia and Yemen. Immediately, NBC correspondent Richard Engel slammed this analogy. “It’s not at all the situation we are seeing in Iraq and Syria,” Engel said. Engel explained ISIS is made up of a large force of tens of thousands of fighters, controlling an area he said was approximately the size of Maryland with at least 8 million residents in that area, noted BI’s Logiurato. “It’s much more akin to regime change than it is to wading back and picking targets with allied forces,” Engel said. “They are not comparable at all.”
The Royal Bank Of Scotland Will Move If… …Scottish voters voted Yes on Scottish independence. “As part of such contingency planning, RBS believes that it would be necessary to re-domicile the Bank’s holding company and its primary rated operating entity (The Royal Bank of Scotland plc) to England,” the bank said in a statement. “In the event of a ‘Yes’ vote, the decision to re-domicile should have no impact on everyday banking services used by our customers throughout the British Isles.”
George Soros Warns Against Scottish Independence. In a new piece for the FT, the legendary financier warned that Scottish independence would do serious damage to Europe as a U.K. exit from the E.U. is another possibility further down the road. Here’s Soros: “This is the worst possible time for Britain to consider leaving the EU — or for Scotland to break with Britain. The EU is an unfinished project of European states that have sacrificed part of their sovereignty to form an ever-closer union based on shared values and ideals. Those shared values are under attack on multiple fronts. Russia’s undeclared war against Ukraine is perhaps the most immediate example but it is by no means the only one. Resurgent nationalism and illiberal democracy are on the rise within Europe, at its borders and around the globe.”
Markets Are Lower. In Europe, Britain’s FTSE is down 0.4%, France’s CAC 40 is down 0.3%, and Germany’s DAX is flat. Asia closed mix with Japan’s Nikkei up 0.7% and Hong Kong’s Hang Seng down 0.1%. U.S. futures are in the red with Dow futures down 50 points and S&P futures down 6 points.
IEA Warns Of Remarkable Slowdown. The International Energy Agency cut its outlook for global oil demand, saying it would increase by 1.3% or 1.2 billion barrels per day to 93.8 billion barrels per day in 2015. “The recent slowdown in demand growth is nothing short of remarkable,” the IEA said. “While demand growth is still expected to gain momentum, the expected pace of recovery is now looking somewhat more subdued.”
Chinese Inflation Cools. China’s consumer price index fell to 2.0% in August from 2.3% in July. This was below expectations for 2.2%. Producer prices fell to -1.2% from -0/9%, missing expectations for -2.2%. “Inflation is well-controlled, and the limited public data on labour market dynamics suggest continued low unemployment. August data so far in hand – the CPI and PPI reports, PMIs, and trade data – hint that headline real GDP growth is picking up in the third quarter of 2014, and suggest a new round of government stimulus is unlikely in 2014,” PNC Financial economist Bill Adams said.
Australian Labour Market Surges. The Australian economy added a whopping 121,000 jobs in August, which was much stronger than the 15,000 expected by economists. However, AMP Capital economist warned the “jobs figures are as unbelievably positive as [the] July surge in unemployment to 6.4% was unbelievably negative. Best taken as statistical noise…”
German Inflation Is Stuck At A Four-And-A-Half-Year Low. Germany’s consumer price inflation was unchanged and in line with expectations at 0.8% year-over-year in August. “Inflation pressures in the eurozone largest economy are still weak, but a 1.9% year-over-year decline in energy prices is still a notable negative influence,” noted Pantheon Macroeconomics’ Claus Vistesen. “Excluding energy, the annual rate of inflation would have been 1.2%, which is still low but also indicative of slightly stronger core prices.”
Ebola Is Taking An Economic Toll. “Sierra Leone has cut its 2014 economic growth forecast to 7 or 8 per cent as an Ebola outbreak cripples business in the iron ore-exporting West African country, the government said on Wednesday,” reported Reuters’ Umaru Fofana. “The economic outlooks for Guinea and Liberia, two other mining-dependent West African countries also fighting Ebola, were lowered by Standard Chartered Bank.”