“Argentina’s gross domestic product fell 4.2% in the second quarter from a year earlier… Argentina’s economy contracted sharply in the second quarter after a severe drought roiled agricultural production and as the country works with the International Monetary Fund to stem a spiralling economic crisis.
“”The economy will contract further in upcoming months amid tightening monetary and fiscal conditions…” the ratings agency Moody’s said in a statement.
“President Mauricio Macri asked the International Monetary Fund last month to speed up payments that are part of a historic bailout deal reached in June…
“The central bank raised its benchmark interest rate to 60% in August after the peso, which has shed about half of its value this year and is the worst-performing currency of 2018, continued to sell off.”
“Brazil’s central bank kept its key rate at an all-time low but cautioned of growing risks to inflation amid doubts over economic policy following presidential elections and global trade disputes.
“The bank’s board, led by its President Ilan Goldfajn, on Wednesday left the benchmark Selic unchanged at 6.50 percent, a stimulus it considered necessary given weak economic growth.”
“The South African Reserve Bank is contending with a currency that’s lost 17 percent to the dollar this year, expectations for quicker price growth, and pressure to increase the rate to keep up with the momentum of other jurisdictions.
“The economy entered its first recession since 2009 in the second quarter.”
“Constrained by high debt levels and the deficit, the appropriate policy mix for the medium term is expansionary monetary stance and tighter fiscal policy…
“In the meantime, the public sector must engage austerity as the Kenyan President has now signalled…”
“Government officials, economists and bankers are all warning that Lebanon is in an economic crisis and the situation is worsening.
“Workers and trade unions say they are planning protest action to press officials wrangling over portfolios to agree on a new government. The political uncertainty is affecting investor confidence…”
“Turkish President Recep Tayyip Erdoğan on Wednesday denied his country is facing a financial crisis, claiming that the country’s currency woes are a product of manipulation, pro-government NTV news reported. Erdoğan’s statements arrive as the country struggles with an embattled currency that has lost 40 percent value since the beginning of the year, while inflation has surged to 17.9 percent and may reach 20 percent during September or October…”
“According to Iran’s Central Bank in August, the inflation rate will reach 60 percent this year. The Iranian rial has hit a record low against the U.S. dollar amid a deterioration in the economic situation and the reimposition of sanctions by the United States. The country’s active work force is 26 million, of whom at least 10 million are jobless. Youth unemployment is at a staggering 40 percent. Many university graduates are unable to find a job.”
“South Korea’s central bank warned on Thursday that household debt was growing much faster than the Organization for Economic Cooperation and Development average as large mortgages and high rents drive up indebtedness.”
“[Japan’s] inflation has stubbornly refused to tick up towards the bank’s two-percent target; growth has remained sluggish and the bank is stuck in neutral, without a major policy change in years. The bank is in “deadlock,” Shigeto Nagai, head of the Japan department at Oxford Economics told AFP. “They can’t tighten, they can’t ease further from here. They have to stick to the current policy but inflation will not rise,” added Nagai.”
“Italy wants the public debt of all euro zone states to be brought below 60 percent of gross domestic product… At around 132 percent of GDP, Italy’s public debt is the second highest in the bloc after Greece…
“To help the reduction process, the ECB should offer a “guarantee” in exchange for “a mortgage on future tax revenue or individual public assets in the event of non-repayment of one or more instalments,” the 81-year-old economist writes.”
“UK inflation unexpectedly rose to the highest level in six months in August… The Office for National Statistics said the consumer price index (CPI) jumped to 2.7% last month from 2.5% in July, confounding economists’ forecasts for the rate to fall to 2.4%.
“The surprise increase will prove unwelcome for hard-pressed British households…”
“China’s manufacturing hub is already feeling an impact from the trade war. The manufacturing purchasing managers index for the southern Guangdong province fell below the threshold delineating a contraction in August, for the first time since early 2016, according to a Bloomberg analysis of data from the province’s Economic & Information Commission. Guangdong is China’s Silicon Valley and manufacturing center combined into one.”
“All 70 economists who answered an additional question in the Sept 12-19 survey said the trade conflict between the world’s top two economies is bad for U.S. growth… “Absolutely — it is a bad policy and definitely negative. But it is not bad enough to throw us into a recession, unless it translates to a big negative for confidence and sentiment,” said Jim O’Sullivan, chief economist at High Frequency Economics.”
“As of June 30, nearly one in 10 American homes with mortgages were “seriously” underwater, according to Irvine, California-based Attom Data Solutions, meaning that their market values were at least 25 per cent lower than the balance remaining on their mortgages… Lingering pain from the crash is deep. But it has fallen disproportionately on commuter towns and distant exurbs in the eastern half of the United States, Reuters analysis found.”
“As for the auto sector, while we have not seen a massive amount of information about it, recent numbers confirm a malaise is settling over the auto industry…
“it is likely jobs will be lost in both these important sectors of the economy in coming months. This will in itself create an economic headwind that affects overall growth.”
“For now, the conclusion of most Fedspeak has been a continuation of the steady but gradual pace of rate hikes and a continued unwind of the balance sheet… However, members of the Federal Open Market Committee clearly are wrestling with how much more work needs to be done before the rate-hike work is finished… On the downside, there’s the ongoing trade war with China, coupled with worry that global growth could be slowing due in part to central banks like the Fed beginning to normalize policy.”
“While some traders have cited the tariffs and trade concerns as inflationary and a culprit for higher rates, others have pointed to the Federal Reserve. “The explanations we’ve heard lean heavily on the notion that growth, a hawkish Fed, risk-assets, and supply have created an underlying bearishness that is evidenced by moves such as those seen on Tuesday,” said BMO Capital’s Ian Lyngen.”