“China’s economy looked to have had its growth slow sharply in April, the last month before new US trade war tariffs take effect, with both industrial production and retail sales growth posting significant declines.
“The big picture to be gleaned from Wednesday’s data dump is that China’s economy is losing the momentum it gained in the first quarter, at a time when it is being sucked into an ever-intensifying trade war with the US.
“Over the past week, the world’s two largest economies have exchanged tit-for-tat tariffs, as it looked like chances of a near-term trade deal – which had appeared to be growing only two weeks ago – have dwindled.
“The weak data are also likely to rekindle the debate over whether the Chinese government needs to enact more fiscal and monetary stimulus to prop up the economy.”
“Regulators in Hong Kong are increasingly nervous about the accelerating pace of capital outflows from China after the collapse of trade talks, fearing a wave of financial turbulence that could jeopardize the hub’s longstanding dollar peg.
“The Hong Kong dollar has fallen to a 33-year low and is testing the limits of the enclave’s currency board regime.
“The Hong Kong Monetary Authority has been forced to intervene twice over the last week.”
“Indonesia posted its widest monthly trade deficit in history in April as exports slumped…
“April exports were down 13.10% on an annual basis at $12.60 billion, led by a drop in shipments of refined oil and natural gas products.
“The poll had estimated a 7.15% contraction. Exports of Indonesia’s main commodities, coal and palm oil, also sank.”
“Iran has officially stopped some commitments under a 2015 nuclear deal with world powers following an order from its national security council, ISNA news agency reported… An official in the country’s atomic energy body told ISNA that Iran has no limit from now for the production of enriched uranium and heavy water…
“Iran has warned that unless the world powers protect its economy from US sanctions within 60 days, it would start enriching uranium at a higher level.”
“President Michel Aoun urged the Lebanese on Tuesday to end protests and make sacrifices to rescue the country from financial crisis as ministers debate a draft state budget expected to include spending cuts.
“Fears that the budget would include wage or pension cuts have sparked protests by public sector workers, pointing to the minefield that Lebanon’s main parties face.”
“The embattled South African state power utility’s debt burden, described by Goldman Sachs Group Inc. as the biggest threat to the nation’s economy, has burgeoned, compounding the difficulty the government faces in formulating a turnaround plan…
“…its Chief Executive Officer Phakamani Hadebe last month put total debt at about 450 billion rand.”
“Brazil’s economic recovery stalled during the first few months of the year, which could result in a contraction in the gross domestic product (GDP) in the first quarter, the Central Bank of Brazil said Tuesday…
“During the first few months of the year, the cooling down of the economy which had been observed at the end of 2018 continued, said the central bank.”
“Argentina’s hope of fast-tracking production from its vast Vaca Muerta shale play, the world’s second largest by output, could be delayed as the country adapts to recession.
“Last year, Argentina was forced to seek a $57bn bailout package from the IMF — the largest-ever sum issued by the fund — after the peso lost over 60pc of its value and inflation surged.”
“Mexican President Andres Manuel Lopez Obrador took office in December vowing to revive state-owned energy company Pemex and put the brakes on foreign investment to give the public a bigger cut of the country’s oil wealth. The leftist oil nationalist’s ambitions include building a new $8 billion refinery, refurbishing existing refineries and reversing a steady decline in crude production.
“The problem is that such expensive plans – for the world’s most indebted oil company – have alarmed credit rating agencies, which are threatening to downgrade Pemex bonds to “junk” status. A downgrade could cripple the president’s bold energy agenda, along with his plans to use new oil revenue to help finance social welfare programs. It could also imperil Mexico’s sovereign creditworthiness.”
“Lenders extended less new credit for people to buy homes and cars in the first three months of the year, according to data that raises questions about how much U.S. consumers can contribute to economic growth this year.
“New mortgage and auto loan balances both declined from the fourth quarter of 2018, according to the Federal Reserve Bank of New York’s quarterly report on household debt and credit.”
“The current narrative is that the US economy is buzzing. No major indicator is flashing red. However, by looking at major indicators in aggregate a clear peak can be made out in October 2018 and we are on a downward trend.”
“The US economy began its expansion in June of 2009 and will mark its ten-year anniversary at the end of June 2019. At that point, it will be the longest expansion in US history…
The new unknown: The tax cuts aren’t built for downturns.”
“The economy could suffer as bank regulators forget lessons from the 2007-2009 financial crisis, the Government Accountability Office warned in a new report today… Bank regulators could be lulled into complacency and not uncover dangers masked by years of a strong economy, asserted the report from the agency, the investigative arm of Congress.”
“Anti-immigrant parties, often with roots in fascist and neo-Nazi organisations, have encroached on the mainstream in pretty much every European country.
“Ultra-nationalists are the main opposition in Germany; in Austria they are in coalition government.
“Democracy in Poland and Hungary has been twisted out of shape by authoritarian regimes that suffocate political opposition, vilify dissent and foment racism, Islamophobia, homophobia and antisemitism.”
“Deputy Prime Minister Matteo Salvini sent ripples through financial markets on Tuesday, saying Italy could be ready to break European Union fiscal rules, on the same day his coalition partner called on him to stop “fanning the flames” with critical comments about the government.
““If we need to break some limits, like the 3% or the 130-140%, we’ll go ahead,” League party chief Salvini told reporters in Verona…”
“William White, former chief economist of the Bank for International Settlements, presciently warned of financial risks before the 2007-09 financial crisis.
“Last year, he warned of another crisis, pointing to the continuing rise in non-financial sector debt, especially of governments in high-income countries…”