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| HKECIC Weekly Market News |
| 4 Februrary 2019 |
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| Market Snapshots |
| Asia and Australasia |
Hong Kong: Business sentiment among SMEs fell to its lowest level in three years
A survey conducted by the Hong Kong Productivity Council (HKPC) showed that business sentiment among small and medium-sized enterprises (SMEs) in Hong Kong has weakened for the second straight quarter in Q1 2019. The index fell from 49.7 in Q3 2018 and 43.0 points in Q4 2018 to 40.4 in Q1 2019, reaching the lowest level in nearly three years. The lower index as compared to last quarter was mainly resulted from the decrease in manufacturing sub-index (-7.0) and retail sub-index (-9.2), while import/export trade and wholesale (+0.5) increased. Despite recent optimism in the financial markets that the US and China would strike a deal on trade, 81% of businesses surveyed said they were not hopeful about negotiations between the world’s two biggest economies, the HKPC said.
Japan: Retail sales rose more than expected in December 2018
Japan’s retail sales increased 1.3% yr/yr in December 2018, following a 1.4% gain in November, figures from the Ministry of Economy, Trade and Industry showed. The 1.3% was more than the median estimate for a 0.8% as consumers increased spending on clothes and home appliances. Further strength in spending would ease policymakers’ concerns about the impact on consumption from a sales tax increase scheduled for October 2019. Separately, chances that Japan will slide into a recession this year have grown over the past three months, a Reuters poll of economists found, pressured by a global economic slowdown and US- China trade friction. |
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| Europe |
UK: May seeks to renegotiate Brexit deal with EU
Last week, UK Members of Parliament (MPs) passed a proposal put forward by Sir Graham Brady to seek alternative arrangements to replace the Irish backstop in Prime Minister Theresa May’s Brexit plan. MPs also backed a non-binding amendment to rule out a no-deal Brexit. May said she would seek to reopen Brexit negotiations with the European Union (EU). However, the European Council President Donald Tusk reiterated the withdrawal agreement remains the best and only way to ensure an orderly withdrawal of the UK from the EU and will not be renegotiated. Nevertheless, Tusk said the EU would stand ready to consider any reasoned request for an extension to the leave date of 29 March 2019. At the same time, Labour leader Jeremy Corbyn said his party would back a three-month delay to Brexit if May’s government cannot get an exit deal approved by the parliament before 26 February 2019. |
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| North America |
US: Trump expressed optimism about reaching a trade deal with China
Senior officials from US and China held meetings in Washington last week to address their differences on outstanding economic and trade issues. The trade talk centered on US demands for structural reforms by China including ending the forced transfer of technology from US companies and reining in the use of industrial subsidies. US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin were reportedly going to Beijing in early February to continue negotiations. President Trump said trade negotiations with China were going well and that he and President Xi Jinping of China could meet in the near future to complete a final deal. Separately, the Federal Open Market Committee (FOMC) has held the target range for the federal funds rate at 2.25% to 2.5%. Fed Chairman Jerome Powell said officials were paying close attention to policy-related headwinds from trade disputes, Brexit and the potential for future US government shutdowns. |
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The German arm of UK-based fashion and accessories retailer Monsoon Accessorize Limited has filed for insolvency proceeding in a local court, putting 190 jobs across 30 stores in Germany at risk. The retailer first entered Germany in 2006 and insolvency comes after a drop in revenues due to changing consumer behaviour. The retailer’s operations at home in the UK are not affected by the proceedings. |
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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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