“The growing mystery of where China’s rapid slowdown is headed may become the biggest risk on the horizon, even as Brexit and a solution to U.S.-China trade tensions are kicked into the long grass…
“The global economy’s in its weakest shape since the financial crisis a decade ago, Bloomberg Economics analysis shows. And the reminders are all around: China got more affirming evidence of its big slowdown, with industrial output and retail sales softening…”
“China’s economic slowdown deepened in the first two months of the year, pushing unemployment sharply higher from…
“Against the backdrop of slowing global demand and domestic weakness, the jump in joblessness comes just days after Premier Li Keqiang announced an “employment first” strategy as a key part of economic policy for the coming year. That will feed into policymakers’ calculations as to if and when further stimulus measures to shore up the world’s second-largest economy are needed.”
“If you think China’s monetary policy became more lax in 2018, wait for 2019. Pushed by gloomier activity data, China’s policymakers have moved from an orthodox monetary policy to a much more heterodox one.
“The core of this more aggressive move is to exhort banks to lend more to the private sector, with specific targets on the amount of credit granted to private companies and, in particular, small and medium enterprises…”
“This round of currency intervention in Hong Kong is far from over. That’s according to analysts, who’re watching the interplay between the amount of money in the city’s financial system and local borrowing costs.
“Shorting the Hong Kong dollar will remain profitable until the latter starts to go up sharply, and the monetary authority will spend at least another HK$50 billion ($6.4 billion) defending the peg before that happens…”
“The Bank of Japan kept monetary policy steady on Friday but tempered its optimism that robust exports and factory output will underpin growth, a nod to heightened overseas risks that threaten to derail a fragile economic recovery. Factories across the globe slammed on the brakes last month as demand was hit by the U.S.-China trade war, slowing global growth and political uncertainty in Europe ahead of Britain’s departure from the European Union.”
“Axis Bank’s Shashikant Rathi says rupee debt market in ‘complete chaos’… India corporate note spreads rise to near highest since 2009. Rathi, who has dominated India’s local bond underwriting business for over a decade at Axis Bank, says the industry now faces its biggest challenge since the global financial crisis. Shock defaults since last year by shadow bank IL&FS group and a new electronic bidding platform have disrupted the $108 billion market where underwriters like Rathi help companies raise money by selling debt securities…”
“Turkey’s unemployment rate jumped to 13.5 percent in the November-January period, its highest level in nine years, official data showed on Friday, in a fresh sign of the impact of last year’s currency crisis.
“The economy contracted a sharper than expected 3 percent in the fourth quarter of 2018, its worst performance in nearly a decade, indicating last year’s near 30 percent slide in the lira had tipped it into recession.”
“Australia’s housing market is on track to experience a slump bigger than both the global financial crisis and the 1980s recession.
“National dwelling (houses and units) values slumped by 6.8 per cent since their peak in October 2017, driven mainly by sharp falls in Sydney (-13.2 per cent) and Melbourne (-9.6 per cent), according to new analysis by property data company CoreLogic.”
“Canadian home values fell last year for the first time in three decades amid falling prices in some of the country’s priciest markets, even as debt burdens increased. The value of residential real estate in Canada held by households dropped C$30 billion ($22.5 billion) in the fourth quarter to C$5.10 trillion, from C$5.13 trillion in the same quarter the previous year, Statistics Canada reported Thursday. The 0.6 percent decline is the first decrease in country-wide home values in data going back to 1990.”
“U.S. new home sales fell 6.9 percent to a seasonally adjusted annual rate of 607,000 in January, the U.S. Census Bureau said on Thursday. Over the year, sales of new homes declined 4.1 percent, according to the U.S. Census Bureau…
Even as low mortgage rates kept boosting home buyers’ interest, housing market remained gloomy in the United States.”
“The United States will strengthen military ties with Brazil to a level usually reserved for NATO allies during President Jair Bolsonaro’s visit to Washington next week, boosting growing cooperation between the Americas’ two largest militaries, two Brazilian government officials said on Thursday.”
“Russian oil company Rosneft spent a fortune on joint ventures in Venezuela even though it suspected it was losing out on millions of dollars, documents show. It continued investing, sources say, because the Kremlin wanted to support its ally in South America…
“Rosneft has poured around $9 billion into Venezuelan projects since 2010 but has yet to break even, Reuters has calculated…”
“Argentina’s inflation quickened to 3.8% in February, 51.3% per year. Argentina’s central bank will shrink its monetary base by an extra 10 percent before the end of the year to slow inflation that has proven difficult to tame.
““We need to be persistent, understanding that there are no immediate results,” central bank President Guido Sandleris told reporters in Buenos Aires.”
“Investors are closely watching the credit market for signs of strain, especially as a growing share of debt is amassed by companies with the weakest ratings.”
Read the previous ‘Economy’ thread here and visit my Patreon page here.