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| HKECIC Weekly Market News |
| 8 July 2019 |
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| Market Snapshots |
| Asia and Australasia |
Australia: Central bank cuts interest rates to record low
The Reserve Bank of Australia (RBA) has cut its benchmark interest rate by 25 basis points to a record low of 1.0%. The RBA has cut rates for the second straight month in an attempt to support employment growth and boost inflation. The RBA Governor Philip Lowe wrote in a post-meeting statement that the outlook for the global economy remains reasonable, while international economic risk, especially from the US-China trade war, also contributed to the decision to lower rates further. Lowe said that the lower interest rate could help advance RBA’s goal on lower unemployment rate, inflation targets and boost the economy. The RBA did not rule out further cuts.
South Korea: Government slashes 2019 growth forecast
The government of South Korea has lowered its economic growth and export forecast for this year as the economy continues to be clouded by external uncertainties including the global trade conflicts and the downturn in business cycle of the global semiconductor industry. The Ministry of Economy and Finance slashes the economic growth to a seven-year low at the range of 2.4% to 2.5% for 2019, lower than the 2.6% to 2.7% range it previously projected in December 2018. The ministry lowered the forecast as uncertainties over the trade war remain high amid the slowing global economy while a recovery in the semiconductor sector that accounts for 20% of total exports is being delayed. The government now expects total exports to shrink by 5% in 2019, giving up an earlier projection for 3.1% growth. |
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| Europe |
Eurozone: Retail trade volume down in May
Eurozone’s seasonally adjusted volume of retail trade decreased by 0.3% mth/mth in May, deepened from a 0.1% drop in April, according to estimates from Eurostat. Retail trade decreased in all retail sectors, including automotive fuel (-1.3%), for food, drinks and tobacco (-0.5%) and non-food products (-0.1%). Among Member States for which data are available, the largest decrease in the total retail trade volume was registered in Lithuania (-3.0%). The highest increases were observed in Portugal (+1.5%), Spain (+1.1%) and Belgium (+1.0%). |
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| North America |
US: Trade deficit reaches five-month high in May
US goods and services trade deficit widened by 8.4% to a five-month high of US$55.5 billion in May, data from the Department of Commerce showed. Trade deficit deepened as imports rose by 3.3% mth/mth to US$266.2 billion, the most increase since 2015, while exports increased 2.0% to US$210.6 billion. By commodities, exports gain reflected in passenger cars, soybeans, capital goods and consumer goods. Imports were boosted by crude oil, automotive, capital goods and consumer goods. In particular, both Chinese goods imports and exports increased in May, with the goods trade deficit with China rose by 12.2% mth/mth to US$30.2 billion, with imports rising 12.8%. This potentially reflects companies rushing shipments ahead of the US latest additional tariffs announced in May. US and China last week agreed to a trade truce and a return to talks. White House trade adviser Peter Navarro said the trade deal will take time, and talks were heading in the right direction. |
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Monitronics International Inc., a US-based home and business alarm systems provider, has filed for Chapter 11 bankruptcy protection. Under the terms of the proposed plan, Monitronics will eliminate approximately US$885 million in debt and emerge from Chapter 11 in approximately 75 days. Monitronics expects to continue to operate its business in the ordinary course throughout the restructuring. |
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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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