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| HKECIC Weekly Market News |
| 9 July 2018 |
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| Market Snapshots |
| Europe |
Eurozone: Retail trade unchanged in May
Eurozone’s volume of retail trade in May remained unchanged compared with April, according to estimates from Eurostat. This was due to a rise of 1.1% in food, drinks and tobacco, while non-food products fell by 1.0%, and the volume of automotive fuels did not change. Among Member States for which data are available, the highest increases in the total retail trade volume were registered in Portugal (+4.7%), Latvia (+3.4%) and Slovenia (+3.1%). Decreases were observed in Germany (-2.1%), Austria (-0.7%) and Spain (-0.1%). Separately, in response to US President Donald Trump’s threat to slap a 20% tariff on European Union cars on national security grounds, the EU officials are exploring the idea of a tariff-cutting deal ahead of a meeting between Jean-Claude Juncker, president of the European Commission, and President Donald Trump in Washington in July.
Turkey: Inflation hits 14-year high
Turkish Statistical Institute reported that Turkey’s consumer price index (CPI) rose 15.39% yr/yr in June, which was the highest level in 14 years, putting pressure on Erdogan’s new cabinet. Prices rose faster for a variety of expenditure groups, including food and non-alcoholic beverages, transportation, housing and utility, among others. Higher price levels continued to drive the Turkish lira down, which has depreciated by about 20% against the US dollar year to date. A steady rise in inflation increased the likelihood for a further uplift of interest rate at the central bank meeting on 24 July. |
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| North America |
US: Tariffs on US$34 billion of Chinese goods took effect
On 6 July 2018, the Trump administration began collecting an additional 25% tariff on 818 lines of goods worth US$34 billion from China, which would be followed by another US$16 billion which is subject to further review and public hearings. The US Trade Representative (USTR) on the same day announced a process for US companies to obtain product exclusions from the additional tariffs. In making its determination on each request, USTR may consider whether a product is available from a source outside of China, whether the additional tariff would cause severe economic harm to the requestor or other US interests and whether the particular product is strategically important or related to Chinese industrial programs, including “Made in China 2025”. In response, China retaliated with an additional 25% tariff on the same amount of US$34 billion involving 545 lines of US goods. Earlier, a Chinese Commerce Ministry spokesman said foreign companies accounted for about US$20 billion, or 59%, of the US$34 billion of exports from China subject to the new tariffs, with US companies accounting for a significant part of that 59%. |
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| Latin America |
Brazil: Truckers' strike curbs trade surplus in H1
According to the Ministry of Industry, Foreign Trade and Services, Brazil posted a trade surplus of US$5.88 billion in June, down 18% from a year ago. For the first half of the year, the trade surplus was US$30.06 billion, down 17% over the same period in 2017. The drop in trade surplus was caused by the nationwide truckers strikes that paralyzed the country’s trade and supply for about 10 days in May. Truckers protesting high diesel prices blocked major highways and forced farmers to dump milk and cull poultry. The central bank in June slashed its 2018 GDP growth forecast from 2.6% to 1.6% in the wake of the strike. |
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WIS Holding Company, Inc., a US-based inventory management firm, has filed for Chapter 11 bankruptcy protection for an orderly liquidation of the company’s assets. The company has no ongoing operations or employees. According to court filing, the company listed assets in the range of US$0 to US$50,000 and liabilities in the range of US$100 million to US$500 million. |
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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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