unaffected by a U.S.-led shake-up of international trade policies.“Factory activity plunged from Asia to Europe in September, reflecting how few countries are left
“Chinese manufacturers said output took a hit amid the worst contraction in export orders since 2016, leading similar trends across Taiwan, Vietnam, and Indonesia. Confidence continued to plummet at Japanese firms, while euro-area factory output struggled as companies voiced concerns over global protectionism.”
“Worldwide manufacturers reported the first fall in global export orders for over two years in September, according to the latest PMI surveys. “The slowdown in trade acted as a further drag on factory output, order book growth and hiring.”
“Christine Lagarde used a speech in Washington on Monday to drop the broadest possible hint that the IMF would cut its global growth forecast when it unveils its latest health check on the world economy next week.”
“Corporate and emerging market bond sales fell in the third quarter due to rising borrowing costs and trade tensions, while volatility crimped fund managers’ emerging debt appetite.”
“Indonesia’s rupiah weakened past 15,000 per dollar for the first time in 20 years amid a souring of sentiment toward emerging-nation assets and as oil prices jumped.
“The currency has tumbled almost 10 percent this year as rising U.S. interest rates have boosted the dollar… Crude prices have almost tripled since February 2016, putting pressure on the oil-importing nation.”
“As of today beleaguered infrastructure finance company Infrastructure Leasing & Financial Services Ltd. has a new board. Six members, including two bankers, a former regulator, two veteran bureaucrats and a corporate leader, who closely witnessed a similar rescue not ten years ago… A statement from the Finance Ministry pulls no punches when outlining what went wrong at IL&FS.”
“The Consumer Price Index (CPI) inflation general increased by 5.1% on year-on-year basis in September 2018 as compared to an increase of 5.8% in the previous month and 3.9% in September 2017, Pakistan Bureau of Statistics (PBS) reported on Monday.”
“The number of Turkey companies who applied for bankruptcy protection due to market volatility amid the country’s financial crisis has exceeded 3000, according to Sözcü newspaper columnist Nedim Türkmen… Türkmen stressed that the number of applications for bankruptcy protection which have been responded to has surpassed 3000 while the number of companies awaiting a response on their application and preparing to apply is between 5000-7000.”
“After shying away from the international financial market, Egypt may well be forced by heavy funding needs to tap it just as turbulence pushes up rates, threatening to undermine its deficit-cutting ambitions. The country, which has borrowed heavily from abroad since it drew up an economic reform program with the IMF in 2016, faces a tough foreign repayments schedule over the next two years as well as a rising bill from relentlessly more expensive oil imports.”
“For economic watchers, Central Bank of Nigeria’s [recession] warnings are not coming as a surprise considering that the issue of economic contractions, when juxtaposed against the nation’s N22.4 trillion debt stock and shrinking reserves, show clearly that Nigeria is in dire straits. Worse still, the passage and full implementation of annual budgets have constantly been immersed in the dirty waters of politics at the expense of the economy.”
“South Africa may be driven to the International Monetary Fund if its rising debt goes unchecked without the buffer of savings or new sources of tax revenue, the country’s National Planning Commission said. Debt is increasing against a backdrop of weak economic growth and higher joblessness, a diminishing global-market presence and weakening investments.”
“Nearly two million people have fled Venezuela’s economic and political crisis since 2015, according to the UN which called for a “non-political” response to an exodus that is straining regional resources. “Some 5,000 people are now leaving Venezuela daily – the largest population movement in Latin America’s recent history,” UN refugee agency (UNHCR) chief Filippo Grandi told the organisation’s executive committee on Monday.”
“Italian Finance Minister Giovanni Tria’s effort to promote his government’s new fiscal strategy ended in failure on Monday, with the head of the European Commission warning of a Greek-style crisis and the nation’s bonds dropping to their weakest level in more than four years.”
“The eurozone economy may face a sharper-than-expected slowdown, key economic indicators suggest, after Italian populists roiled markets by pushing ahead with a wallet-busting budget. Movements in money supply, a key indicator for future GDP growth, have raised concerns about the economic outlook for the bloc.”
“EU citizens will no longer be given priority to live and work in Britain, in a radical overhaul of immigration policy after Brexit which Theresa May said “ends freedom of movement once and for all”… The announcement of the tough new system comes before a speech by the former foreign secretary Boris Johnson, a harsh critic of the prime minister’s Brexit plans, which had been expected to dominate the third day of the Conservative party’s conference in Birmingham.”
“House prices in London have fallen for the fifth quarter in a row as high prices, stamp duty changes and Brexit uncertainty put off buyers. The average price of a home in the capital fell by 0.7% in the third quarter, compared with the same period last year, to £468,544, according to Nationwide. It followed a 1.9% drop in prices in the second quarter.”
“House prices dropped by their largest monthly fall since the global financial crisis in September, as a new report warns the amount home buyers can borrow could be slashed by a third if banks are forced to tighten their lending standards after the royal commission. Figures released on Monday showed the major capital cities have not had the usual spring bounce, with Sydney house prices down 6.1 per cent from the same time last year…”
“There is nothing normal or natural about the recovery in the US and world economies. Everything that has happened, all the recovery and growth, has been done with a decade’s worth of free money.
“This situation is abnormal, unnatural and without precedent in at least 5000 years.”
“Our research strongly indicates long term US interest rates are at a secular decision point, one that is likely to eventually be resolved by significantly – if not surprisingly — higher borrowing costs over the next one to several quarters.”
“Oil jumped to the highest level in nearly four years as a slowdown in American drilling added to concern over supply losses from Iran and Venezuela… “The supply situation looks fragile indeed,” said Norbert Ruecker, head of macro and commodity research at Julius Baer Group Ltd. in Zurich.”
Divided we fall… Unsurprisingly, political polarisation has been worsening in the US since the peaking of US conventional crude production in the early seventies:
“Party polarization is even worse than most people think, according to a new Michigan State University study.
“And neither party can shoulder the blame, as it doesn’t matter which party is in charge, said Zachary Neal, associate professor of psychology and global urban studies.
““What I’ve found is that polarization has been steadily getting worse since the early 1970s,” he said. “Today, we’ve hit the ceiling on polarization. At these levels, it will be difficult to make any progress on social or economic policies.””