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| HKECIC Weekly Market News |
| 9 September 2019 |
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| Market Snapshots |
| Asia and Australasia |
Australia: GDP growth in Q2 remains weak
Australia's GDP grew by 0.5% qtr/qtr in Q2, following a 0.5% rise in Q1, according to figures released by the Australian Bureau of Statistics (ABS). The ABS said in a statement that the external sector drove GDP growth this quarter, while growth in the domestic economy remains steady. Exports contributed 0.3 percentage points to GDP growth driven by non-rural goods with continued external demand for mining commodities. Imports also contributed 0.3 percentage points to GDP growth, attributed by the fall in imports across the board with declines in all major categories. Remarkably, consumption goods had the largest decline (-2.9%) in imports. The Australian economy grew 1.4% year-over-year in Q2 2019, posting the lowest growth since Q3 2009. |
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| Europe |
UK: MPs to vote again on early election motion this week
Last week, UK Members of Parliament (MPs) passed a bill aimed at preventing a no-deal Brexit on 31 October by 327 votes to 299, forcing Prime Minister Boris Johnson to ask for an extension beyond the deadline if no deal can be agreed with the European Union (EU). Johnson then moved a motion for an early general election on 15 October, which is two days ahead of the EU summit. The motion has been rejected by MPs subsequently. Despite the defeat, Johnson’s government later announced that MPs would get another chance to vote for a snap election this week. Two-third majority is required to authorize an early poll. However, Labour MPs said they would not back an early election until a Brexit delay had been agreed with the EU.
Turkey: GDP shrank by 1.5% in Q2
Data from the Turkish Statistical Institute showed that Turkey’s GDP decreased by 1.5% yr/yr in Q2, following a 2.4% decline in Q1. The Turkish economy contracted for the third consecutive quarter, as gross fixed capital formation plunged 22.8% in Q2, deepened from a 12.4% fall in Q1. Meanwhile, exports of goods and services rose at a softer pace (+8.1%) compared with Q1 (+9.2%). The fall in GDP compare to Q1 was offset by a moderate decline in imports of goods and services, which fell 16.9% in Q2 (compared with -28.9% in Q1). In an attempt to revive the battered economy triggered by the currency crisis last year, the Turkey’s central bank slashed its benchmark interest rate from 24% to 19.75% during its July meeting, which was the first rate cut in more than four years. |
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| North America |
US: Trade deficit narrows in July
The US Department of Commerce reported that US’s goods and services deficit narrowed 2.7% from a month earlier to US$54.0 billion in July. The trade gap has shrunk for a second straight month as exports rose 0.6% mth/mth to US$207.4 billion, while imports went down 0.1% mth/mth to US$261.4 billion. By commodity group, exports of consumer goods, capital goods as well as automotive vehicles, parts, and engines increased, while imports of computers as well as industrial supplies and materials decreased. Remarkably, trade deficit with China increased 9.4% to a six-month high of US$32.8 billion. Goods exports to China fell 3.3%, while goods imports from China climbed 6.4%. Regarding US-China trade issues, both US and China’s officials have agreed to meet in early October for a new round of face-to-face negotiations amid the heightened trade tensions. |
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Target Corporation (NYSE: TGT), a US-based discount store retailer with more than 1,800 stores across the US, informed its suppliers of Chinese goods to absorb cost increases arising from the additional tariffs imposed by the Trump’s administration. The retailer’s chief merchandising officer said in a letter that it expects suppliers will develop the appropriate contingency plans and Target will not pass price increases along to its customers. |
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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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