“Central banks in Asia and South Africa lowered their interest rates Thursday, joining a global easing bandwagon that started earlier this year in the Asia-Pacific region and is expected to include the U.S. and Europe within weeks.
“The latest moves, by central banks in South Korea, Indonesia and South Africa, underscore the global nature of the brewing rate-cutting cycle, as policy makers attempt to ward off signs of weaker economic growth. With economies and financial markets interconnected, expectations of lower interest rates by the Federal Reserve and European Central Bank have given central banks in emerging markets scope to lower rates and prop up their economies.
““I think this will provide further impetus for Asian central banks in their easing cycle ahead,” said Prakash Sakpal, an economist at ING Bank.
“Since April, New Zealand, India, Malaysia and the Philippines have lowered rates. China’s central bank has taken a number of measures to encourage lending to small businesses, and investors expect it to reduce benchmark rates if the Fed lowers its rates.
“The MSCI Emerging Markets Index of equities fell even though central banks in South Korea, Indonesia and South Africa all cut interest rates on Thursday.
“On top of that, their foreign-exchange rates all strengthened along with the broader market for currencies of countries with developing economies, which is not what one would expect in an easing cycle…
“The truth is, it’s getting harder to ignore the big-picture risks facing the global economy.”
“The UK may be slipping into “a full-blown recession”, according to the official body charged with analysing public finances and providing economic forecasts.
“The latest economic data and business surveys suggest the economy “flatlined at best” in the second quarter, the Office for Budget Responsibility said on Thursday.”
“Europe just endured one decade of economic stagnation. If it doesn’t act soon, it could face another.
“Ten years after the global financial crisis, Europe’s economy has achieved a recovery, but not a revival. Low inflation, low interest rates and low growth have become the new normal. Europe’s malaise could have dangerous ripple effects.”
“Sales have tumbled at Hashem Abul Fadel’s shopping centers in Sudan, where he and fellow business owners fear that months of political turmoil could bring on a full-scale economic collapse…
“…the country’s fragile economy has already been hard hit by months of mass protests which led to the military council’s toppling of longtime president Omar Al-Bashir in April.”
““Things have been turned upside down,” Badran said.
“As the economic crisis deepens in Lebanon, so has the public’s distrust in the ability of the old political class, widely viewed as corrupt and steeped in personal rivalries, to tackle major reform.”
“A cash crunch at one of China’s best known conglomerates is getting worse as the company said it will not be able to pay its upcoming dollar notes.
“China Minsheng Investment Group Corp.’s offshore unit said in a filing that it won’t be able to repay the principal, as well as the interest on the 3.8% $500 million bond due August, after considering its liquidity and performance.”
“Japanese exports fell for a seventh straight month in June as a slowdown in global growth and uncertainty over trade continued to buffet the world’s third-largest economy.
“The value of shipments abroad dropped 6.7 per cent last month from a year earlier, according to the Finance Ministry, with falling exports of semiconductor components and auto parts among the biggest drags.”
“Excluding Brazil and Japan, the global car market is in recession
“The number of new cars sold worldwide fell 6.6% in the first half.”
“Freight volumes are falling precipitously within the US and across much of the world as economic slowdown spreads, hitting levels that typically mark the onset of recession.
“The US rail transport group CSX Corp suffered its biggest share price drop since the Lehman crisis after slashing its outlook on Wednesday. The stock has fallen 12pc over the past two days.”
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