“Trade tensions have re-emerged at a critical moment in the global cycle. Global growth is currently tracking at a subpar rate of 3.2%Y in 1H19 (vs a peak of 4%Y in 1Q18). One expects global growth to stagnate for 2H2019. With trade tensions already having an impact on corporate confidence, the risks to this outlook are skewed to the downside and recession risks are rising.
“Against this backdrop, the meeting between the US and China at the G20 summit assumes a heightened level of importance. The outcome is highly uncertain, but the window for resolving trade tensions and avoiding damage to the global cycle is narrowing.”
“The Bank of England will probably need to raise interest rates sooner than financial markets expect, policymaker Michael Saunders said on Monday, adding his voice to an unexpectedly hawkish message from the central bank’s chief economist on Saturday.”
[Hopefully this is just bluster to bolster the £, as an interest rate rise is the absolute last thing the UK economy needs right now].
“European banks have transferred 21.4 billion euros ($24.2 billion) in revenues to the European Central Bank (ECB) in the five years since negative interest rates were introduced…
“The negative rates were intended to discourage banks from parking cash with the ECB rather than lending it out or investing it.”
“The next time a recession harkens, the Fed might consider being more democratic — not just lend money cheaply to banks but rather give it away to ordinary working folks.
“As the Fed would have to account for that money on its balance sheet, that would require the Treasury to place on deposit securities of equal value.”
“The Reserve Bank of Australia is approaching the limits of interest rate cuts, so financial market attention is turning to the possibility of it resorting to an unconventional stimulus known as quantitative easing.
“Undoubtedly, this would be an extraordinary step for the RBA. It probably wouldn’t do so lightly, unless the economy was in trouble.”
“Pakistan Prime Minister Imran Khan on Monday asked all citizens to declare their assets by June 30 through the Asset Declaration Scheme.
““I am appealing to all of you to take part in the Asset Declaration Scheme that we have brought, because if we don’t pay taxes, we will not be able to raise our country up,” Khan said in a televised address, Dawn reported.
“The prime minister’s remarks come at a time of economic crisis in Pakistan…”
“The “fastest growing major economy” tag India boasted of till recently may have been based on spurious numbers.
“The country’s GDP growth between the financial years 2012 and 2017 was overestimated by around 2.5 percentage points, according to Arvind Subramanian, former chief economic advisor (CEA) to prime minister Narendra Modi.”
https://qz.com/india/1640510/india-gdp-growth-overestimated-says-ex-cea-arvind-subramanian/
“[India’s] top automakers — Maruti Suzuki, Honda Cars, Mahindra, Hyundai, and Nissan among others have applied brakes on their production for some days in order to clear the piling inventory. “There has been demand by the dealers across brands in the country to reduce the production as the sales are not happening,” an industry source told DH.
“Even as many of the auto majors officially declined any plans to curb production, yet a regulatory filing by the country’s largest automaker — Maruti Suzuki — revealed a drop of 18.9% in its production during the month of May.”
“Japan is producing fewer babies than in the 19th century, according to figures that confirm the extreme demographic crisis threatening the country’s economy, industries and welfare system.
“According to the health, labour and welfare ministry, the population fell to 124.22 million last year, a drop of 444,000 people. Barely 918,000 babies were born, 28,000 fewer than in 2017, and the smallest number since records began in 1899.”
https://www.thetimes.co.uk/article/falling-population-leaves-japan-fearing-economic-crisis-cx59tcf2r
“It’s all part of the game and China has seemingly decided that its currency falling to 7.00 per dollar isn’t a critical threshold that would see capital outflows just yet.
“The way I see it is that local authorities have played their cards well with this regard by helping to “ease” and “comfort” markets as we approach the key level.”
“China’s imports of crude oil stumbled in May, and while the loss of Iranian cargoes offers a convenient explanation, there are other reasons to be cautious over the strength of demand in the world’s biggest oil importer.”
“Oil prices stabilized on Tuesday on expectations that producer group OPEC and its allies will keep withholding supply to prevent prices from tumbling amid a broad economic slowdown which has started eating away at fuel demand growth.”
https://www.cnbc.com/2019/06/11/oil-market-opec-supply-cuts-economic-slowdown-in-focus.html
“U.S. frackers haven’t turned a profit in 10 years, and investors have not only been putting pressure on them to show them a return on their investments, but have largely shut off the flow of new investment capital until they do. Last year oil companies raised about $22 billion from both equity and debt financing, less than half what they raised in 2017 and less than a third of what they raised just five years ago.
“More than 170 small fracking companies weren’t able to survive and declared bankruptcy last year. Another eight small fracking companies have cratered so far this year. And if oil prices continue to slide — crude oil hit $66 a barrel less than two months ago but now trades at $54 a barrel — lack of investors’ funds will be the least of their worries. Survival will be their top priority. Those companies going bankrupt last year left investors holding the bag on nearly $100 billion, and new investors aren’t interested in repeating the experience.”
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