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HKECIC Weekly Market News
3 June 2019
 
 
 
 
Market Snapshots
Asia and Australasia
Hong Kong: Exports fall for six consecutive months
Hong Kong's exports declined for the sixth month in a row amid sluggish global demand. The Census and Statistics Department reported that the values of Hong Kong's total exports of goods recorded year-on-year decrease of 2.6% in April, after a decrease of 1.2% in March. For the first four months of 2019 as a whole, the value of Hong Kong’s total exports of goods dropped by 2.5% over the same period in 2018. The year-on-year decreases were registered to some major destinations, in particular India (-25.6%), Taiwan (-14.9%), the USA (-11.0%), Japan (-5.5%) and the Mainland China (-5.2%). A Government spokesman said that the value of merchandise exports was weighed down by the weaker performance of the global economy, US-Mainland China trade tensions and various external headwinds. The Government will remain vigilant as the near-term outlook for Hong Kong's exports is subject to a high level of uncertainty.
Europe
Eurozone: Economic sentiment rebounds after 10-month decline
Data from the European Commission showed that Eurozone’s Economic Sentiment Indicator (ESI) increased to 105.1 in May from 103.9 in April as optimism surrounding the bloc’s industry and services sectors picked up. This was the first month-on-month increase since last June, and ahead of the expectations. Amongst the largest Eurozone economies, the ESI increased in France (+4.0), Italy (+1.7), Spain (+1.3) and Germany (+0.4), while sentiment weakened in the Netherlands (-1.3). A separate sub-index linked to consumer confidence also improved, from -7.3 in April to -6.5 in May.
North America
US: Trump announced to impose new tariffs on all goods imported from Mexico
US President Donald Trump announced that he will begin imposing tariffs on all goods imported from Mexico beginning 10 June unless the country does more to help reduce illegal immigration from Central America. In a White House statement regarding the emergency measures to address the border crisis, starting on 10 June, the US will impose a 5% tariff on all goods imported from Mexico. If the illegal migration crisis is alleviated through effective actions taken by Mexico, the tariffs will be removed. If the crisis persists, however, the tariffs will be raised to 10% on 1 July, 15% on 1 August, 20% on 1 September and reach a permanent level of 25% on 1 October.
Canada: Central bank holds key interest rate steady 
Canada’s central bank The Bank of Canada has left its benchmark interest rate unchanged at 1.75%, the highest rate since December 2008. The central bank said in a press release that recent Canadian economic data are in line with the projections in the bank’s April Monetary Policy Report, with accumulating evidence that the slowdown in late 2018 and early 2019 is being followed by a pickup starting in the second quarter. The bank also noted both consumer spending and exports have shown signs of improving in the second quarter, adding it appears that overall growth in business investment has firmed. In taking future policy decisions, the central bank said it will remain data dependent and especially attentive to developments in household spending, oil markets and the global trade environment.
      
 
 
  Corporate News  
  Gap Inc. (NYSE:GPS), a US-based clothing and accessories retailer, announced its first quarter results ended 4 May 2019. For Q1 2019, net sales decreased 2% yr/yr to US$3.7 billion and comparable store sales decreased 4%. In particular, sales at established Gap brand stores fell 10% in Q1, steeper than the 4% decline last year. Lower operating expenses helped improving net income to US$227 million from US$164 million last year. At the same time, the company cut its 2019 adjusted profit forecast to US$2.05 to US$2.15 per share, from a previous range of US$2.40 to US$2.55.  
 
 

 
 
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