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HKECIC Weekly Market News
4 June 2018
 
 
 
 
Market Snapshots
Asia and Australasia
Hong Kong: Exports up 8.1% yr/yr in April
The Census and Statistics Department reported that the values of Hong Kong's total exports of goods recorded year-on-year increase of 8.1% in April, after going up 8.0% in March. For the first four months of 2018 as whole, the value of Hong Kong's total exports of goods recorded year-on-year increase of 9.3% over the same period in 2017, and the increases were registered to most major destinations, in particular Taiwan (+15.9%), the Mainland (+12.7%), Germany (+11.3%), Singapore (+10.3%), the USA (+8.5%) and Japan (+5.3%). A Government spokesman commented that the prevailing momentum of the global economy is likely to continue and should be conducive to Hong Kong's export performance in the near term. However, the external environment is still subject to uncertainties, including those associated with the rise in trade protectionism, pace of US monetary normalisation and geopolitical tensions.
Europe
Eurozone: Economic confidence lowest since August 2017
Eurozone’s Economic Sentiment Indicator (ESI) in April fell to its lowest reading since August 2017, according to data from the European Commission. The ESI dropped slightly by 0.2 points to 112.5 resulted from decreases in three of five sectoral confidence indicators, including industry, services and consumer. By contrast, confidence in construction and retail trade improved. Amongst the largest Eurozone economies, the ESI rose in the Netherlands (+1.2) and to a lesser extent in Germany (+0.1), while it fell in France (-1.8), Spain (-1.2) and Italy (-1.0).
Italy: Conte sworn in as prime minister
Giuseppe Conte has been sworn in as Italy’s prime minister, where the new coalition government will face confidence votes in both houses of parliament this week. Italy was thrown into political turmoil after the president Sergio Mattarella rejected the choice of economy minister made by anti-establishment parties Five Star Movement and the League, the winners of March’s parliament election. Subsequently, the coalition-backed prime minister-designate Conte decided to name Giovanni Tria as replacement. However, the struggle between Eurosceptic populists and pro-EU establishment politicians has triggered a slide in global stock markets and a selloff in euro, with the euro dropping to its lowest level against the US dollar since July 2017.
North America
US: Move forward to impose tariffs on steel and aluminum against EU, Canada and Mexico
Following a breakdown in trade talk between the US’s economic team and European partners in Paris, and lengthen NAFTA talks with Canada and Mexico, the EU, Canada and Mexico were placed under the 25% tariff on steel and 10% on aluminum. The tariffs were first announced in March 2018 and the above countries secured temporary exceptions. The US expects retaliate but left open for continuing negotiations with the affected countries.
Latin America
Brazil: Economy grows 1.2% yr/yr in Q1
According to the Brazilian statistics agency, Brazil’s economy grew by 1.2% yr/yr in Q1, down from 2.1% in the previous period. This was the weakest growth since Q2 2017, with fixed investment expanded at a slower pace and government spending contracted further. In contrast, household consumption jumped 2.8%, posting the fourth consecutive quarter of advance compared with the same quarter a year ago thanks to the record-low interest rate and lower inflation. However, the growth prospect is weighed down by the depreciating Brazil real (losing over 10% of value against the US dollar for the year) and high unemployment rate, which stood at 12.9% in the quarter ended in April. Economists surveyed by the Brazilian central bank now see the country’s economy to grow by 2.37% this year, lower than the government’s 2.5% forecast.
      
 
 
  Corporate News  
  Carven, a French luxury fashion house, has filed for receivership. A spokesman for the Paris-based brand said the company suffered a substantial loss due to delays in production of their spring/summer 2018 collection. The company is currently looking for a buyer.
 
 
 
 
 
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