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On the second anniversary of Washington unleashing its first trade war tariffs on Beijing, tensions continue to flare over issues ranging from Hong Kong to technology, with observers in both countries agreed that the superpower relationship between China and the United States is at its lowest ebb in decades.

“The motivation for US President Donald Trump was to close America’s trade deficit with China, and it has narrowed. China continues to purchase American farm goods, seen as crucial to Trump’s plans to win re-election in November, but these are widely viewed as sticking plasters on ties that otherwise appear on the verge of collapse.

““I don’t know that we would have thought we would have fallen this far,” said Clark Jennings, former White House trade adviser to former US president Barack Obama.”

https://www.scmp.com/economy/china-economy/article/3092534/us-china-trade-war-reaches-second-anniversary-superpower


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“China has been very obstructionist” in blocking requests for access to its audit records, Silvers said.

““There is a growing sense of frustration with China, and now with the trade wars and the Covid-19 outbreak there is a growing appetite to pick a fight with China. There is a change in the geopolitical climate.””

https://www.cnbc.com/2020/07/09/a-financial-war-with-china-could-be-brewing-on-top-of-the-trade-war.html


Chinese state lenders are revamping contingency plans in anticipation of U.S. legislation that could penalise banks for serving officials who implement the new national security law for Hong Kong, sources at five state financial institutions said.”

https://uk.reuters.com/article/uk-china-banks-usa-sanctions-exclusive/exclusive-chinese-banks-prepare-contingency-plans-over-threat-of-u-s-sanctions-sources-idUKKBN24A1IR


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It looks like China will not meet its Phase One trade deal promise to import more U.S. fuel products, including LNG, market watchers are now saying. Maybe that analysis is too easy to make at this point.

“China has as good excuse as any: the economy is climbing out of a pandemic sized hole…”

https://www.forbes.com/sites/kenrapoza/2020/07/09/china-unlikely-to-meet-phase-one-demand-for-us-oil-gas/#2beafb437152


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“China has imposed limits on businesses and individuals in the Hebei province for withdrawing large amounts of cash without prior approval… This two-year programme will be expanded to the provinces of Zhejiang and Shenzhen later this year. According to another report, 586 banks and financing firms were classified as “highly risky” by the authorities.

China’s banks are failing because the country has been fueling its growth with debt and years of borrowing has made the banks hollow.”

https://www.wionews.com/world/will-chinas-bad-loan-crisis-lead-to-the-collapse-of-its-economy-312044


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As new Covid-19 cases continue to surge in states throughout the US, another 1.3 million people filed for unemployment last week, highlighting the grim reality that any type of economic recovery may be far off…

“…even though some jobs have come back, millions more are still indefinitely out of work.”

https://www.theguardian.com/business/2020/jul/09/us-unemployment-weekly-numbers-coronavirus-reopenings


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Wells Fargo is considering cutting thousands of jobs as part of a broad strategic review to restore the bank’s profits from unsustainably low levels, according to a person familiar with the situation.

“America’s third-biggest bank, which employs 263,000 globally, has said it will cut dividends in the third quarter…”

https://www.ft.com/content/0eaf05af-d178-4849-b063-69bfd91c59c5


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U.S. companies are preparing to open their books on a quarter that is set to show the biggest earnings fall since the financial crisis, leaving investors looking for light at the end of the tunnel.

“The season unofficially begins on Tuesday with results from some of the biggest U.S. banks.”

https://uk.reuters.com/article/uk-usa-earnings-outlook/disaster-u-s-earnings-loom-but-investors-try-and-look-beyond-idUKKBN24A1BR


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“Hertz’s demise has drawn attention to the relentless build-up in corporate debt in the US, where companies now owe a record $10tn — equivalent to 49 per cent of economic output. When other forms of business debt are added in, including to partnerships and small businesses, that already extraordinary figure increases to $17tn.

Even before the pandemic, the level of corporate leverage was beginning to cause alarm.”

https://www.ft.com/content/c732fded-5252-4333-a3f8-80b767508bbc


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The cost of household staples, ranging from meat and cheese to school uniforms and drinking glasses, will substantially increase if there is no Brexit trade deal, British retailers have warned.

“With just six months to go before the UK leaves the EU entirely by exiting the single market and the European customs union, retailers fear further damage to a sector already reeling from the coronavirus crisis…”

https://www.theguardian.com/politics/2020/jul/10/no-deal-brexit-will-raise-cost-of-uk-household-staples-say-retailers


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““The worst is behind us” on Covid-19 disruption but the economic recovery will be gradual, the chief economist of the German Central Bank said on Thursday…

Deutsche Bundesbank chief economist Jens Ulbrich noted that the German economy “won’t return to pre-corona levels of activity any time soon”.”

https://www.irishtimes.com/business/economy/worst-is-behind-us-but-recovery-will-be-slow-bundesbank-economist-1.4300151


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Thousands of Greeks protest against a government bill setting new restrictions on street protests. Clashes erupted, with protesters hurling petrol bombs and police using tear gas to disperse them.”

Video:

https://www.msn.com/en-us/news/other/clashes-break-out-in-athens-over-tighter-demonstration-rules/vi-BB16yFZn


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Serbian authorities have banned gatherings of more than 10 people in the capital, Belgrade, after two nights of violent clashes between police and thousands of demonstrators protesting coronavirus lockdown measures.

“Thousands, however, defied the ban.”

https://www.aljazeera.com/news/2020/07/serbia-bans-mass-gatherings-virus-lockdown-protests-200709194114942.html


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Covid-19 threatens to push tens of millions of people in emerging markets back into poverty. It also risks exacerbating inequality and triggering a fresh wave of social unrest, giving a fresh boost to anti-incumbent populists… as virus-induced recessions hit emerging markets with full force, budget deficits will blow out, triggering a wave of downgrades by ratings agencies and scaring away investors.

“A stress test by Absolute Strategy, a London research firm, found that up to 37 per cent of the benchmark JP Morgan emerging market bond index could be at risk of default over the next year or so.”

https://www.ft.com/content/ddfe663e-c1df-11ea-9b66-39ae33ea12cb


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“…unemployment in the region [Latin America and the Caribbean] is expected to rise to 13.5% from 8.1% last year, affecting more than 44 million people, compared to over 18 million in 2019.

“The poverty rate is expected to rise to 37.2% from 30.2%, meaning 230 million people will be affected compared to 185 million last year, it said.”

https://www.washingtonpost.com/world/the_americas/un-says-latin-america-and-caribbean-are-covid-19-hot-spot/2020/07/09/77cf517c-c23c-11ea-8908-68a2b9eae9e0_story.html


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Philippine trade data for May showed both imports and exports cratering, down by 40.6% and 35.6% respectively.

“The narrowing of the trade deficit means should be supportive of the strong-peso for now, but it also highlights that the economy is headed for a protracted slump.”

https://think.ing.com/snaps/philippines-trade-data-continues-to-point-to-drawn-out-economic-slump/


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Turkey’s lira this week slipped to its weakest level since hitting a record low in early May after inflation for the month of June was reported at 12.6%, a figure that topped economists’ expectations.

“With rapidly shrinking foreign reserves to prop up the currency, inflation and currency devaluation are showing no signs of a turnaround, analysts say.”

https://www.cnbc.com/2020/07/08/turkey-faces-prospect-of-another-currency-crisis-as-inflation-jumps.html


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Syria could face severe bread shortages for the first time since the start of the war, another challenge for President Bashar al-Assad as he grapples with an economic meltdown and fresh U.S. sanctions, a U.N. official, activists and farmers said…

“…rampant inflation [is] driving up food prices.”

https://financialpost.com/pmn/business-pmn/severe-bread-shortages-loom-for-syria-as-fresh-u-s-sanctions-grip-2


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Nearly 14 million children in the United States went hungry in June, as the economic fallout from the pandemic continued to batter families.

“That’s an increase of more than 10 million since 2018, and nearly three times the number of children who went hungry during the Great Recession, according to an analysis of Census data released by the Hamilton Project on Thursday.”

https://www.huffingtonpost.co.uk/entry/14-million-us-children-are-going-hungry-due-to-the-covid-crisis_uk_5f081730c5b63a72c33fcb8f


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New shipbuilding orders in the first half declined 57% to the lowest levels seen this century, according to data from Clarkson Research Services.

“Just 269 ships – equivalent to 5.75m cgt – were contracted in the first six months around the world, putting many yards in jeopardy of running out of business in the coming year.”

https://splash247.com/ship-orders-plummet-to-lowest-level-seen-this-century/


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Gold prices ticked past $1,800 an ounce this week, and are now not far from the all-time highs reached in 2011, in the bleak aftermath of the financial crisis.

“New records could be ahead.”

https://www.wsj.com/articles/miserable-economic-outlook-could-yield-record-gold-prices-11594289030


Has the global economy seen the worst? It’s too early to tell.

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“Not only are investors mistaking the rebound in activity for a sustainable recovery, they are also conflating the easing of lockdowns with a greater willingness to consume and hire…

“…the sharp improvement in economic data has done little to reduce the uncertainty faced by companies and investors. While the benchmark S&P 500 index just had its best quarter since 1998, a staggering 80 per cent of the index’s members failed to provide guidance on their earnings last quarter, data from Bloomberg shows.

“Analysts’ own forecasts, moreover, are resoundingly bleak.”

https://www.scmp.com/comment/opinion/article/3092431/has-coronavirus-hit-global-economy-seen-worst-crisis-its-too-early


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A new “unknown pneumonia” that is potentially deadlier than the novel coronavirus has reportedly killed more than 1,700 people this year in the Central Asian country of Kazakhstan, according to a warning issued by Chinese officials Thursday.”

https://www.google.com/amp/s/amp.cnn.com/cnn/2020/07/10/asia/kazakhstan-pneumonia-intl-hnk-scli-scn/index.html


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