“Factory activity contracted in most Asian countries last month as an escalating trade war between Washington and Beijing raised fears of a global economic downturn and heaped pressure on policymakers in the region and beyond to roll out more stimulus.
“Such growth indicators are likely to deteriorate further in coming months as higher trade tariffs take their toll on global commerce and further dent business and consumer sentiment leading to job losses and delays in investment decisions.
“Some economists predict a world recession and a renewed race to the bottom on interest rates if trade tensions fail to ease at a Group of 20 summit in Osaka, Japan at the end of June, when presidents Donald Trump and Xi Jinping could meet.”
“Oil posted its worst May performance in seven years as global trade tensions escalated, undermining the outlook for energy demand growth…
“A key Chinese manufacturing gauge for May dropped more than forecast.
“The world’s second-largest economy is mobilizing its state-run energy industry to prepare for a long struggle with the U.S., and also has readied a plan to restrict exports of rare earths, according to people familiar with the matter.”
““China is now looking at its oil supply situation from the worst-case scenario, like what the U.S. has done to Iran,” Laban Yu, an analyst with Jefferies Group LLC in Hong Kong, told Bloomberg…
“China… appears to be filling in its strategic petroleum reserves in recent months, as it has been boosting oil imports by 10 percent while refining output has been growing at 5 percent, according to the analyst.”
“The China Banking and Insurance Regulatory Commission (CBIRC) took control of Baoshang on May 24, rattling Chinese markets and prompting the People’s Bank of China (PBOC) to inject cash into the banking system.
“In response to concerns that regulators planned more takeovers of financial institutions, the PBOC said on Sunday that Baoshang was a standalone case.
““Everyone, please don’t worry. At present we don’t yet have this plan,” it said in a statement on its website.”
“Bank of Jinzhou Co. said its auditors resigned, sending some of its debt securities plunging and reigniting investor concerns about the riskiness of China’s smaller lenders… Trading in bank’s Hong Kong shares suspended; AT1 debt plunges.”
“Markets slide again as China blasts US’s ‘intimidation and coercion.”
“The most recent GDP numbers are out, and they reveal that US consumer activity is weak.
“This is important, because consumer spending represents more than 2/3 of total GDP. Consumption weakness is most obvious in the declining spending on goods, where purchases are at their lowest percentage of GDP since the Great Recession.”
“US President Donald Trump has waded once again into UK’s Brexit debate, urging Theresa May’s successor to leave the EU with no deal.
“Trump said Britain should refuse to pay its 39 billion pound ($49bn) EU divorce bill and “walk away” from Brexit talks if Brussels does not give the UK what it wants, he told the UK’s Sunday Times newspaper.”
“Clock ticks louder as Netherlands’ pension crisis intensifies.”
“The leader of German Chancellor Angela Merkel’s junior coalition partner stepped down in a surprise move that puts into question the survival of the government itself.
“Andrea Nahles, head of the Social Democratic Party, said she will resign as chief and parliamentary caucus leader after losing the rank and file’s backing.
“The party suffered a devastating defeat in the European Parliament elections last week.”
“The Italian government is confident it can reach a compromise with Brussels and avoid sanctions over its deteriorating public finances, the economy minister said as talk of a looming government crisis grew…
“…the EU Commission had found Tria’s letter too vague and non-committal, and was likely to take the first steps toward a disciplinary procedure this week.”
“Millions of protesters have marched in cities across Algeria each Friday for months, calling for a complete political overhaul.
“However, the largest protest movement in 57 years has moved the country no closer to prosperity and stability, economists warned… Economists and political analysts worry that a worsening economic crisis could turn the largely peaceful protests violent, driving further instability.”
“There is now no denying that the second Modi government takes office [in India] amid a clear economic slowdown.
“The first macro data set released under the new Finance Minister, Nirmala Sitharaman’s watch, on Friday, showed an under-performing economy with GDP growth falling to 5.8% in the fourth quarter of 2018-19.”
“The [Australian interest rate] cut in June and 3Q 2019 would address current concerns regarding weak growth and low inflation, while the 3Q 2020 cut would likely be a response to the anticipated US recession,” Societe Generale told its clients last week.
“A US recession — and the associated global contagion — would be another level of worry…”