“Global manufacturers have reported falling export orders for eight months since September, according to the new export orders component of the JP Morgan global purchasing managers’ index.
“World trade volumes peaked in October and have since been contracting at the fastest rate since 2009, according to the Netherlands Bureau of Economic Policy Analysis.
“Every real-time measure of manufacturing and trade flows points to a very sharp slowdown over the last nine months.
“Container shipments are falling. Air cargo is down. Rail freight is shrinking. And shipping lines are cancelling voyages owing to lack of demand.”
“Provoking trade disputes is “naked economic terrorism“, a senior Chinese diplomat said on Thursday, ramping up the rhetoric against the US amid a bitter trade war that shows no signs of ending soon.
“Zhang Hanhui, China’s vice foreign minister told reporters in Beijing China opposed the use of “big sticks” such as trade sanctions, tariffs and protectionism.”
“A record wave of company defaults is forcing asset managers to spend more time doing due diligence on issuers, and account for those risks in bond-market pricing.
“As China’s pile of high-yield debt grows, it’s drawing a new breed of investors who had previously focused on other risky investments, such as non-performing loans.”
“China’s slowdown has likely tipped Japan’s economy into recession, though not by enough to justify delaying a sales tax hike, according to the head of a government committee that charts the economic cycle.
“The possibility is rising that the economy is already in a recessionary phase, said Hiroshi Yoshikawa, who is also president of Rissho University, in an interview Tuesday.”
“…what is the greatest cause for concern is the growing likelihood that the current trade spat will metastasize from a disagreement over economic policies to one front in a broader geopolitical battle between U.S. and China.”
“The European Central Bank has followed the Bank of England in warning that a vast corporate debt bubble poses a fundamental threat to financial stability.
“In its latest examination of the dangers facing the financial system, the ECB said that leveraged loans to businesses presented particularly high risks, especially if interest rates rise.”
“Growing uncertainty about global economic growth could lead to “bouts of high volatility” in financial markets, the European Central Bank (ECB) warned Wednesday.
“In its Financial Stability Review (FSR), which provides an appraisal of potential risks to stability in the euro area, the ECB cautioned that weaker-than-expected growth and a possible escalation of trade tensions could trigger further falls in asset prices.”
“Brexit has caused the number of cars built in the UK to plummet by 44.5 per cent in just one year, the Society of Motor Manufacturers and Traders has said…
“April’s ‘dismal’ performance, the 11th straight month of decline, worsened the underlying downward trend.
“This was due largely to slowing demand in key international markets – including the EU, China and the US, as well as at home.”
“Khan’s government came to office last year facing an imminent balance of payments crisis and a ballooning budget deficit that forced it to seek Pakistan’s 13th IMF bailout since the late 1980s.
“The IMF agreement reached earlier this month still requires approval from the Fund’s board in Washington but it has already stipulated that Pakistan must take painful measures to cut a fiscal deficit expected to top 7% of gross domestic product.”
“Banks in the Sudanese capital Khartoum were closed on Wednesday on the second day of strikes organised by protest and opposition groups to pressure military rulers to cede power to civilians.
“Several banks visited by a Reuters reporter were fully closed, and cash machines had not been restocked for several days. Employees at the central bank were also on strike.”
“Sluggish economic growth in South Africa is starting to increase risks arising from high levels of debt in the country, the central bank warned on Wednesday, with defaults growing in both consumer and corporate debts.
“In its semi-annual review of financial stability, the South African Reserve Bank said some areas of lending, including unsecured lending, car finance and lending to sectors like construction and manufacturing, were showing particular strain.”
“Outgoing Minister of Agriculture, Audu Ogbeh, has declared that Nigeria is in serious economic crisis and that super power economies are bent on under-developing the productive sectors due global economic protectionism and expansionist agenda.”
“Venezuela’s central bank on Tuesday reported a sharp contraction of third-quarter gross domestic product, its first release of economic data in nearly four years by a nation struggling under hyperinflation and migration exodus of millions of citizens…
“The economy contracted 22.5% percent in Q3 2018 with respect to the same period in 2017…
“…according to data posted on the bank’s website, which did not provide a full-year 2018 figure.”
“Make no mistake, the Treasury yield curve really is flashing recession angst — and the trade war is merely a sideshow.
“While a key slice of the curve has inverted this month for the first time since March, an “adjusted” curve that accounts for quantitative easing and tightening has been persistently inverted for the past six months, according to Morgan Stanley.”
“The trade war needs to fire its PR team.
“The tussle between the U.S. and China is being blamed for all manner of economic and financial developments. Some of these are only vaguely related to the tariff spat, or they reflect trends underway before U.S. President Donald Trump ever heard of his Chinese counterpart Xi Jinping. In other areas, like monetary policy, the conflict alters timing, not outcomes.”
Read the previous ‘Economy’ thread here and visit my Patreon page here.