“US President Donald Trump said China “broke the deal” in trade talks, ramping up hostilities ahead of negotiations between the two sides.
“The comments come as Beijing said it would retaliate with “necessary countermeasures” if the US raises tariffs on Chinese products.
“Mr Trump has vowed to more than double tariffs on $200bn (£152bn) of Chinese goods on Friday.”
“The U.S. Treasury on Wednesday saw the weakest demand for its benchmark 10-year note in a decade, illustrating the diminishing appetite among some investors to accept current yields.
“Bids for the $27 billion of notes exceeded the offering by 2.17 times, the lowest since 2009.
“While there’s no danger that the government of the world’s biggest economy would fail to fund itself…
“…the drop underscores a shift in demand dynamics for Treasuries that could leave them vulnerable to spikes in volatility.”
“For decades, debt collectors have relied on a limited set of communication tools: landlines and the US mail…
“The Consumer Financial Protection Bureau on Tuesday proposed rules that would give the industry the go-ahead to send consumers unlimited amounts of texts and emails, accelerating a trend the watchdog bureau says could be beneficial for everyone.”
“Chinese banks throttled back new lending in April after a record first quarter that sparked fears of more bad loans, but analysts say the central bank will likely have to step up support for the economy as trade tensions with the United States escalate.
“Global investors are closely watching to see how much more support Beijing will inject to shore up growth.”
“A surprise deterioration in U.S.-China trade talks prompted analysts to dramatically turn bearish on the Chinese yuan…
“Market participants continued to be bearish on the South Korean won as a slew of weak domestic economic data weighed on the unit.”
“China’s exports fell more than expected in April while imports rose, official data showed Wednesday ahead of high-stakes talks aimed at resolving a trade war with the United States.
“The world’s two leading economies face a possible make-or-break moment when top negotiators meet in Washington this week following months of fraught talks.”
“Mumbai’s auto dealers are facing the impact of India’s automobile sector hitting a speed breaker. Passenger vehicle growth in the financial year ended March was the slowest since 2014, according to a top industry body. Auto stocks have lost a staggering $42 billion in the last 16 months.
“Experts are now linking this to demonetisation, GST and the jobs crisis, thus raising the possibility of an economic slowdown.”
“Turks are holding more foreign currency deposits than at any time since a financial crisis ripped through the country’s economy in 2001, the Financial Times said citing a report by Renaissance Capital.
“Turkish deposit holders were keeping 1 trillion liras in foreign currency at the end of March, exceeding the 993 billion liras they held in the country’s own currency, Renaissance said, according to the FT.”
“The currency crisis has been fuelled by longer term and more complex economic problems, not least a loss of foreign currency since Sudan lost three-quarters of its oil output when the south of the country seceded in 2011…
“Now after five long months the shortage of cash is biting hard.”
“…many local economies throughout Europe are in a state of prolonged stagnation, rendering them an ideal hunting ground for populists, according to a report from ING senior economists Bert Colijn and Joanna Konings.
“Employment levels within the European Union are now 2% above where they were in 2008, but some regions have not seen this recovery, and have yet to show signs of bottoming out.”
“Germany faces a budget shortfall of €100bn (£86bn) over the next four years as its economy slows, according to leaked government figures.
“Economic growth has been much slower than forecast in recent months and tax revenues are expected to fall well short of projections. That will leave Angela Merkel’s government with a gap of €11.1bn (£9.5bn) to fill in its budget for this year alone.”
“To illustrate how a peg could work [in combating the next financial crisis], suppose that the overnight interest rate were at zero and the two-year Treasury rate were at 2 percent.
“The Fed could announce that it intends to hold the two-year rate at one percent or less and enforce this ceiling by standing ready to buy any Treasury security maturing up to two years at a price that corresponds to a return of one percent.
“Since the price of a bond is inversely related to its yield, the Fed would effectively be offering to pay more than the initial market value.
“Think of it as price support for two-year government debt.”
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