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| HKECIC Weekly Market News |
| 17 September 2018 |
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| Market Snapshots |
| Asia and Australasia |
India: Inflation hits 10-month low
India’s inflation rate moderated to 10-month low of 3.69% yr/yr in August from 4.17% in July, according to provisional figures from the Central Statistics Office. Although the Indian rupee has fallen more than 10% against the US dollar year-to-date and hit a historic low this month, the inflation rate was cooled in August on softer food inflation which fell to 0.85% yr/yr in August from 1.73% in July. In an effort to tame inflation, the central bank raised its benchmark interest rate twice by a total of 50 basis points in its past two meetings to 6.5%. An easing inflation reinforces the view that the central bank would keep interest rates on hold at the meeting on 3-4 October. |
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| Europe |
Eurozone: Central bank to scale down bond-buying program
The European Central Bank (ECB) reaffirmed that, starting from October, it would halve the monthly pace of bond purchases under its quantitative easing program from EUR 30 billion to EUR 15 billion until the end of December. Besides, the ECB kept its key interest rates unchanged at -0.4% and continued to expect them to remain at their present levels at least through the summer of 2019. Separately, eurozone’s industrial production fell by 0.8% mth/mth in July, at the same pace in June, according to estimates from Eurostat. The decrease was due to production of durable consumer goods falling by 1.9%, non-durable consumer goods by 1.3% and intermediate goods by 0.8%, while production of capital goods rose by 0.8% and energy by 0.7%.
Turkey: Central bank raises interest rate to 24%
Turkey’s central bank has sharply raised its benchmark interest rate from 17.75% to 24%. This is the second rate hike in less than two months to stem the currency collapse and to restore investor confidence in the country. Following the announcement, the Turkish lira rallied against the US dollar as the move calmed investors’ fear over the central bank’s independence. Recent data showed that the country’s GDP growth has slowed to 5.2% yr/yr in Q2 from 7.3% in Q1, with household final consumption and gross fixed capital formation expanded at a slower pace. |
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| North America |
US: To seek trade solution with China
Following US President Trump’s threat to impose steep tariffs on a huge range of Chinese goods, the White House officials has invited China to hold new talks on their escalating trade conflicts. A spokesman from the China’s Ministry of Commerce welcomed the invitation and said the two governments were discussing details for a new round of negotiations. The news came at a time when the latest Federal Reserve’s beige book showed that some US companies expressed concern over the impact of trade policies on their businesses. Separately, President Trump is ready to impose additional tariffs on US$ 200 billion worth of Chinese goods as early as this week, according to sources familiar with the matter. |
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Electro Distribution Srl, a Romania-based distributor of smartphones, tablets, gadgets and accessories, has filed for bankruptcy and would be liquidated. The company had a total debt of EUR 7.4 million at the end of 2017. |
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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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