Market Archives - Page 17 of 43

13Aug

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Asia, Market, World

Asset Management: Monthly Macro Insights – August 2024

Weakening business confidence indices continue to cast doubts on the global economy’s resilience. Although core inflation remains above central banks’ targets, the cooling of labour markets has not gone unnoticed, prompting a major shift in policy rates projections. China’s economy disappoints Chinese GDP grew a mere 0.7 per cent q/q in Q2-2024, the weakest since early 2022, showing activity is struggling to maintain a tepid recovery. What’s more, weak July PMIs signalled a poor start to Q3 — a worrying development given the undershoot in the previous quarter. Manufacturing confidence edged down to 49.4 and remained in contraction territory for a third month straight. The non-manufacturing gauge inchedlower to 50.2, marginally above the 50-threshold, thanks solely to the constructio...

9Aug

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Market, USA

US jobless claims fall, easing market fears and other economics stories to read

1. US jobless claims fall, easing market fears The number of new unemployment benefit claims in the US has fallen more than expected, easing concerns about labour market stability. Initial claims dropped by 17,000 to a seasonally-adjusted 233,000 for the week ending 3 August, marking the largest decline in about 11 months, and coming in below the 240,000 forecast by Reuters' economists. The news follows last week's worse-than-expected US job data, which saw global stock markets fall. The jump in jobless claims was attributed to factors including people being unable to work because of Hurricane Beryl, Deutsche Bank's Jim Reid told The Guardian. Another positive indicator this week is that, despite an increase in total US household debt during Q2 2024, delinquency...

6Aug

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China, Market

The Actual Economic Crisis in China

The Chinese economy is stuck. Following Beijing’s decision, in late 2022, to abruptly end its draconian “zero COVID” policy, many observers assumed that China’s growth engine would rapidly reignite. After years of pandemic lockdowns that brought some economic sectors to a virtual halt, reopening the country was supposed to spark a major comeback. Instead, the recovery has faltered, with sluggish GDP performance, sagging consumer confidence, growing clashes with the West, and a collapse in property prices that has caused some of China’s largest companies to default. In July 2024, Chinese official data revealed that GDP growth was falling behind

6Aug

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China, Market

China’s Real Economic Crisis

Zongyuan Zoe Liu is Maurice R. Greenberg Fellow for China Studies at the Council on Foreign Relations and the author of Sovereign Funds: How the Communist Party of China Finances Its Global Ambitions. The Chinese economy is stuck. Following Beijing’s decision, in late 2022, to abruptly end its draconian “zero COVID” policy, many observers assumed that China’s growth engine would rapidly reignite. After years of pandemic lockdowns that brought some economic sectors to a virtual halt, reopening the country was supposed to spark a major comeback. Instead, the recovery has faltered, with sluggish GDP performance, sagging consumer confidence, growing clashes with the West, and a collapse in property prices that has caused some of China’s largest companies to default. In July 2024, Chinese o...

2Aug

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Asia, China, Market

How Chinese loans trapped Pakistan’s economy

After cash-strapped Pakistan secured a new $7 billion (€6.5 billion) bailout package from the International Monetary Fund (IMF) in July, Islamabad has started talks with Beijing on reprofiling billions in Chinese debt as it seeks to enact economic reforms. On the table are proposals to delay at least $16 billion in energy sector debt to China, along with extending the term of a $4 billion cash loan facility due to depleting foreign exchange reserves. Last week, Pakistani Finance Minister Muhammad Aurangzeb was in Beijing to present proposals on extending the maturity of debt for nine power plants built by Chinese companies under the multibillion-dollar Pakistan China Economic Corridor (CPEC). On Friday, Prime Minister Shehbaz Sharif told a feder...

2Aug

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Asia, China, Market

China’s Service Sector Is an Underutilized Driver of Economic Growth

China’s economic development over the last several decades has been remarkable amid rapid growth. We project growth will remain resilient at around 5 percent in 2024, despite the continued property sector adjustment. At the same time, China has relied too much on investment as opposed to consumption. Diminishing productivity and an aging population risk restricting growth, which we expect to slow significantly in coming years, to around 3.3 percent in 2029. Addressing these challenges requires a comprehensive and balanced policy approach. Given these circumstances, the country’s service sector is an underexploited driver of growth—which was also recognized at the Third Plenum. Reallocating resources to services has helped boost productivity over the past two decades. And i...

31Jul

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Asia, Market

Why protest by ethnic Baloch has put Pakistan’s key port of Gwadar on edge

Islamabad, Pakistan — Tensions are high in Pakistan’s port city of Gwadar in the southwestern Balochistan province where an ethnic Baloch group has been protesting for days, following the arrests of some of their members and deadly clashes with security forces. Gwadar is Pakistan’s only deep-sea port on the Arabian Sea, and is a key route of the $60bn China-Pakistan Economic Corridor (CPEC). The latest tensions in the port city began on Friday after the Baloch Yakjehti Committee (BYC) gave a call to demonstrate against alleged human rights violations, enforced disappearances and extrajudicial killings of people in Balochistan, Pakistan’s largest and poorest province. Home to approximately 15 million of Pakistan’s estimated 240 million people, according to...

31Jul

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Asia, China, Market

China’s PMI data softened slightly in July

Manufacturing and non-manufacturing PMIs both edged slightly lower in July dragged down by weak domestic demand Manufacturing PMI remained in contraction China's July official manufacturing PMI slowed slightly to 49.4, down from 49.5 in June. This marked the third consecutive month the PMI has been below 50 - the threshold between expansion and contraction - and also marked a 5-month low. By subcategory, we saw some mixed performances but generally, the more important subcategories trended a little weaker. The biggest decline was in production, which fell from 50.6 to 50.1. New orders also fell further into contraction from 49.5 to 49.3, as domestic demand remains sluggish. In contrast, we saw slightly smaller contractions in new export orders (48.5) and imports (47.0)...

25Jul

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Asia, China, Market

Xi tackles slow growth as economy ‘hits the brakes’

China's economy stumbled in the second quarter, official data shows, just as the country's top leaders gathered for a key meeting to address its sluggish growth. It grew 4.7% in the three months to June, falling short of expectations after a stronger start in the first three months of 2024. The government's annual growth target is around 5%. "China’s economy hit the brakes in the June quarter," said Heron Lim at Moody's Analytics, adding that analysts are hoping for solutions from the meeting under way in Beijing, also called the Third Plenum. The world's second-largest economy is facing a prolonged property crisis, steep local government debt, weak consumption and high unemployment. Past outcomes of the Plenum have changed the course of history in China - in 1978, then l...

25Jul

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Asia, China, Market, World

China’s updated playbook for reviving growth risks more tensions with the world

China’s most senior leadership concluded a major political meeting in July with a communiqué correctly identifying a “grave and complex international environment” and “arduous tasks” at home. But as expected, there was limited indication of new policy approaches to revive its slowing economy and recover from a real estate crisis. Nor did the meeting portend a serious effort to defuse growing backlash in the United States, the European Union, Indonesia, Brazil, and others against China’s economic playbook, which emphasizes increased investments in manufacturing for exports to boost its sluggish growth. The closely watched Third Plenum of the Communist Party’s Central Committee, which occurs approximately every five years, set goals of “innova...

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