“Investors are pricing in a 100% chance the Fed cuts rates at its next meeting in September after Monday’s market carnage, joining central banks around the globe that are providing more stimulus to their respective economies…
“Initially seen as a cautionary pause, the world’s central banks have clearly returned to a path of lower interest rates that has not been seen since the global financial crisis.
“More than half of the world’s central banks are expected to cut interest rates in the third quarter, while 0% of central banks are expected to raise rates in the third or fourth quarters, data compiled by Goldman Sachs shows.”
“After the Dow shed almost 1,000 points on Monday, stock market futures point to a slight recovery on Wall Street this morning. Tuesday’s bounce, however, is tainted by the Treasury’s recession indicator which plunged to a level not seen since before the 2008 financial crisis. As the trade war between China and the US escalates, the recession alarm is screaming.”
“Investors shouldn’t take much solace from Tuesday morning’s rebound, says Nomura.
“The firm is warning the next sell-off could resemble a crisis-level plunge like the one that followed Lehman Brothers’ collapse.”
“The escalating trade war between the U.S. and China is potentially creating “the most dangerous financial moment” since the global crash at the end of the last decade, former Treasury Secretary Larry Summers said.”
“To most people, Aug. 9, 2007, was an ordinary enough summer day. The stock market fell about 3 percent, sufficiently notable to lead the major newspapers, but hardly anything that would generate panic in the streets.
“Yet to many people who work in economic policy or financial markets, that day was the beginning of what would eventually be called the global financial crisis… Monday felt eerily similar…”
“The world knows that China’s GDP growth rate has recently fallen (although some are more worried about it than others). But what the world may not know is that while the U.S. capital markets have steadily grown for the past decade (see chart below), the Chinese markets have been essentially flat.”
“Investor anxiety is visible just about everywhere in Hong Kong’s markets as recession warnings and escalating protests strain sentiment to breaking point.
“While most of the world recovered Tuesday from a yuan-induced meltdown, Hong Kong saw the biggest spike in interbank rates in more than a decade, the longest stretch of equity declines since 1984 and the wildest stock swings in four years.”
“Slumping sales of cars and motorcycles are triggering massive job cuts in the auto sector in India, with many companies forced to shut down factories for days and axe shifts, multiple sources said…
“The downturn – regarded by industry executives as the worst suffered by the Indian auto industry – is posing a big challenge for the government of Prime Minister Narendra Modi as it begins its second term at a time when India’s jobless numbers are climbing.”
“A key measure of Japan’s economy fell to a level not seen since the wake of the financial crisis, adding to concerns about the economy ahead of an October sales-tax hike.
“The leading coincident index dropped to 93.3 in June, the lowest since February 2010, the Cabinet Office said Tuesday.”
“The recessionary conditions in construction have deepened, with the industry experiencing the sharpest decline in activity in six years…
“The Australian Industry Group/Housing Industry Association Australian Performance of Construction Index (PCI) fell by 3.9 points to 39.1 in July — readings below 50 indicate a contraction in activity…”
“More than five million people in Zimbabwe – about a third of the population – need food aid, with many coming close to starving, the UN says.
“The World Food Programme (WFP) has launched a $331m (£270m) appeal as the country battles the effects of drought, a cyclone and an economic crisis. David Beasley, head of the WFP, said many were “in crisis emergency mode… marching towards starvation”.”
“South Africa’s public finances are in a perilous state. There are four main reasons for this. First, economic growth is low or non-existent. Second, tax revenue collection is repeatedly below forecasts.
“Third, debt levels have risen rapidly and are now at their highest levels in the post-apartheid era. Fourth, the poor performance of state-owned enterprises is necessitating large-scale government support.”
“The data highlighting the structural weaknesses of the Nigerian economy are depressingly familiar – despite decades of attempts to diversify, Nigeria remains dependent on oil for 90% of its export earnings…
“Nigeria’s biggest economic problem, though – and the issue that requires real political acceptance from Buhari’s new government – is the country’s growing public debt.”
“Crisis-struck Argentine currency, which shed more than 102.50 percent last year and roughly 18 percent so far this year, tumbled 1.8 percent further on Monday, the 5th of August 2019, to 45.49 per US dollar in context of a swath of uncertainties circulating around the Latin American country’s presidential election alongside a flurry of intensified slowdown concerns.”
“Russia’s economy may face a technical recession as early as this year due to the hard-line fiscal and monetary policy, according to a research note released by the Stolypin Growth Economic Institute, whose Supervisory Board is headed by business ombudsman Boris Titov.”
“German industrial output fell more than expected in June, driven by weaker production of intermediate and capital goods, data showed on Wednesday, adding to signs that Europe’s biggest economy contracted in the second quarter.
“Industrial output dropped by 1.5% on the month – a far steeper decline than the 0.4% fall that had been forecast, figures released by the Statistics Office showed.”
“A disorderly no-deal Brexit would block British police from accessing European data on serious criminals, damaging safety and security from October 31, the country’s head of counter-terrorism said.
“Neil Basu told the Guardian newspaper that were Britain to leave the European Union without a deal, police would lose access to data through the Schengen Information System, passenger name records and the ability to use European arrest warrants.”