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| HKECIC Weekly Market News |
| 19 June 2018 |
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| Market Snapshots |
| Asia and Australasia |
India: Inflation rises to highest since January
Data from the Central Statistics Office showed that India’s consumer price index climbed yr/yr from 4.58% in April to 4.87% in May, its highest level since January. Prices rose faster for a wide range of items including food and beverages, fuel and light, clothing and footwear, among other things. Higher price levels are putting pressures on the Indian rupee, which has plunged to the 18-month low against the US dollar in May. In an effort to curb inflation, the Reserve Bank of India (RBI) raised its benchmark interest rate by 25 basis points to 6.25% early June, the first rate hike in more than four years. The RBI increased its inflation projection to 4.8%-4.9% in the first half (April to September), and 4.7% in the second half (October to March) of 2018-19. |
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| Europe |
Eurozone: Industrial production down 0.9% mth/mth in April
Eurozone’s industrial production fell by 0.9% mth/mth in April, reversing a 0.6% rise in March, according to estimates from Eurostat. The decrease was due to production of energy falling by 5.0%, durable consumer goods by 2.2%, non-durable consumer goods by 1.2% and intermediate goods by 0.8%, while production of capital goods rose by 1.9%. Among Member States for which data are available, the largest decreases in industrial production were registered in Lithuania (-7.9%), the Netherlands (-4.4%) and Greece (-3.3%), and the highest increases in Ireland (+9.1%). Separately, the European Central Bank announced that its interest rates would not rise until at least the summer of 2019 and the stimulus program's bond purchases would be reduced to EUR 15 billion a month from the current EUR 30 billion from October, and end completely after December.
UK: Trade deficit widens most since September 2016
The Office for National Statistics (ONS) reported that UK’s trade deficit stood at GBP 5.28 billion in May, widening from GBP 3.22 billion in April. It was the largest trade deficit since September 2016. Imports rose slightly by 0.7% mth/mth to GBP 55.27 billion while exports dropped 3.2% mth/mth to GBP 49.99 billion. A separate report from the ONS showed that UK’s inflation held steady, with consumer price index increased 2.4% yr/yr in May, same as April and above the Bank of England’s 2% target. |
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| North America |
US: Trump administration announces 25% additional tariff on US$50 billion of Chinese exports
The Trump administration announced the imposition of an additional 25% tariff on up to US$50 billion goods from China, accusing China of stealing intellectual property and as part of measures to reduce the US-China trade deficit. According to the US Trade Representative, the said tariff would be applied in two batches. The first batch of 818 lines of goods worth US$34 billion of Chinese imports, containing goods from industries like aerospace, information and communications technology, robotics, industrial machinery, new materials, and automobiles will be effective on 6 July 2018. The second batch of 284 lines of goods covering US$16 billion worth of imports will go into effect after undergoing further review. In response, China announced to implement an additional 25% tariff on 659 US goods worth of US$50 billion, with the first batch of US$34 billion of US goods including agricultural, automobile and aquatic products to be effective on 6 July 2018. The effective date of the second batch of US$16 billion of US goods will be announced later. Separately, the Federal Reserve has raised its benchmark short-term interest rate by 25 basis points. The move pushes the funds rate target to 1.75%-2% as widely expected, and projected two more increases by the end of this year. |
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Poundworld Retail Ltd, operating a chain of discount stores in UK, has entered into administration after rescue talks failed, putting more than 5,000 jobs at risk. The chain has suffered with lower footfall on many high streets where its stores are based, as well as with rising costs and exchange-rate volatility.
Fabb Projects Limited, a UK-based furniture retailer, has entered into administration after failing to find a buyer, putting 185 jobs at risk. Administrator PricewaterhouseCoopers said the company’s nine stores and associated warehouses will cease to trade. |
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Hong Kong Export Credit Insurance Corporation
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Copyright © 2018 Hong Kong Export Credit Insurance Corporation |
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Disclaimer
The information contained in the ‘Weekly Market News’ (WMN) is compiled by the Hong Kong Export Credit Insurance Corporation ("HKECIC") for general information only. Whilst HKECIC endeavours to ensure the accuracy of this general information, no statement, representation, warranty or guarantee, express or implied, is given as to its accuracy or appropriateness for use in any particular circumstances.
HKECIC is not responsible for any loss or damage whatsoever arising out of or in connection with any information including data or programmes on the WMN. HKECIC reserves the right to omit, suspend or edit all information compiled by HKECIC on the WMN at any time in its absolute discretion without giving any reason or prior notice. Users are responsible for making their own assessment of all information contained in this WMN and are advised to verify such information and obtain independent advice before acting upon it.
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