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| HKECIC Weekly Market News |
| 21 January 2019 |
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| Market Snapshots |
| Asia and Australasia |
China: Trade surplus with US surges to record high in 2018
According to the General Administration of Customs (GAC), China’s overall trade surplus widened to US$57.06 billion in December 2018 from US$41.86 billion in the preceding month. Exports fell 4.4% yr/yr to US$221.25 billion in December, while imports dropped at a faster 7.6% to US$164.19 billion as soybean imports dropped significantly by 40.1% amid ongoing trade tension with the US. In particular, China’s trade surplus with the US grew 17% yr/yr in 2018 to a record high of US$323.32 billion. While the surplus with the US has risen, China’s overall trade surplus in 2018 was the lowest since 2013. Separately, China’s Premier Li Keqiang called for efforts to maintain the country's economic growth within a reasonable range through range-based, targeted and precise regulation, and resist downward pressure with market vitality unleashed by reform and opening-up. |
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| Europe |
Eurozone: Industrial production posts biggest decline in three years
Eurozone’s industrial production fell by 1.7% mth/mth in November, reversing a growth of 0.1% in October, according to estimates from Eurostat. This was the biggest decline in nearly three years, raising concerns over the region’s economic growth. Production fell across all sub-sectors, including capital goods (-2.3%), durable consumer goods (-1.7%), intermediate goods (-1.2%), non-durable consumer goods (-1.0%) and energy (-0.6%). Meanwhile, European Central Bank (ECB) President Mario Draghi said that Eurozone growth is slowing but not heading towards a recession. He repeated ECB’s line that the Eurozone still needs the significant amount of monetary policy stimulus being provided by the central bank through its negative policy rate and massive stock of bonds.
UK: May survived no-confidence vote after Brexit deal rejection
Last week, British members of Parliament (MPs) rejected Prime Minister Theresa May’s Brexit deal by a record margin of 230 votes, the worst defeat for a sitting government in modern history. The rejection has plunged the country into uncertainty and heightened the risk of a disorderly departure from the European Union (EU). Theresa May has narrowly survived a “no-confidence” vote in her government put forward by the Labour Party shortly after rejection of her Brexit deal. The House of Commons rejected the no-confidence motion with 325 votes against and 306 in favour. May called on MPs to put self-interest aside and come together to find a way forward. May is expected to present her alternative Brexit plan today. The deadline for the UK to leave the EU is 29 March 2019. If the parliament cannot agree to a deal or the deadline is not extended, the UK could leave the EU with "no deal," which most politicians and analysts agree would be disastrous. |
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| North America |
US: Beige Book shows concerns rising among US businesses
According to the latest Beige Book published by the US Federal Reserve Board, economic activity increased in most of the country. Non-auto retail sales grew modestly, while auto sales were flat. Manufacturing expanded in most districts, but the growth had slowed, tempered by a decline in optimism regarding short term interest rates, declining energy prices, financial market volatility, political uncertainty, and trade. Meanwhile, employment and wage growths were modest in most districts. It is widely expected that the Fed would likely keep the benchmark interest rate unchanged during its meeting on 29-30 January. |
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Shopko Stores Operating Co., LLC, a US-based general merchandise retailer that operates more than 360 stores in 26 states, has filed for Chapter 11 bankruptcy protection. The retailer is seeking to facilitate the financial restructuring as a result of excess debt and ongoing competitive pressures. During the restructuring process, Shopko will continue to operate and serve its customers, vendors, partners and employees. |
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Hong Kong Export Credit Insurance Corporation
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Copyright © 2019 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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