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| HKECIC Weekly Market News |
| 16 December 2019 |
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| Market Snapshots |
| Asia and Australasia |
China: Inflation rose to 7-year high
Data from the National Bureau of Statistics (NBS) showed that China’s consumer price index (CPI) rose 4.5% yr/yr in November, accelerating from 3.8% in October. This also marks the highest level in more than seven years. By commodity, prices were up in seven of the eight categories, including food, tobacco & liquor, health care, clothing, among other things, while price was down in transportation and communication. In particular, pork prices rose 110.2% in November, contributing 2.64 percentage points to the 4.5% CPI growth. From January to November, on average, the overall consumer prices were up by 2.8% from the same period last year, still within the around 3% annual target set by the government. |
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| Europe |
UK: Conservatives won majority in parliament election
Last week, UK Prime Minister Boris Johnson’s Conservative Party won a landslide victory in the snap general election. The Conservative Party won a decisive 365-seat majority in the House of Commons, while major rival Labour Party won 203 seats only. The Scottish National Party and Liberal Democrats followed with 48 and 11 seats respectively. This represents the best results for the Conservatives since 1987. The election result gives Johnson a strong mandate to drive through this Brexit deal and take out of the European Union set for 31 January 2020. Johnson tweeted this thanks to everyone who voted and supported the Conservatives, adding that they live in the greatest democracy in the world. Reacting to the biggest defeat in recent history, Labour leader Jeremy Corybn announced that he would not lead the party into any future election. |
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| North America |
US: US and China reached phase-one trade deal
Last week, the US and China announced that they agreed to a first phase trade agreement. The US has suspended the new round of additional tariffs that was planned to take effect on 15 December and lower the additional tariff rate on approximately US$120 billion worth of Chinese products to 7.5% from 15% which will take effect 30 days after the agreement is signed. At the same time, 25% of additional tariffs will remain on approximately US$250 billion of Chinese imports. In exchange, China will purchase more products from American farmers and other exports such as soybeans and pork as well as adhere to new commitments on intellectual property, forced technology transfer and currency markets. Separately, the Federal Reserve made no change to its target interest rate range between 1.5% to 1.75% at its December meeting, citing the current stance of monetary policy is appropriate to support sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2% objective. |
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| Latin America |
Argentina: Alberto Fernandez sworn in as president
Alberto Fernandez has been sworn in as Argentina’s new president amid the challenge of economic recession and looming sovereign debt crisis. In his first speech as president, Fernandez promised to fight hunger and poverty as well as revive the struggling economy after a period of austerity measures under the former president Mauricio Macri. Fernandez added the country needs to grow in order to sustain debt payments, indicating the new government would implement growth-focused policies following Macri’s unpopular fiscal tightening. He would seek a “constructive and cooperative” relationship with the IMF. The head of IMF Kristalina Georgieva congratulated Fernandez and said they shared his objectives of pursuing policies to cut poverty and spur growth. |
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Jessops, a UK-based camera retailer with 46 outlets, has gone into administration, putting 500 jobs at risk. The company was reportedly looking to cut costs by renegotiating rents and closing loss-making stores. The retailer’s holding company, Jessops Europe, is not affected by the administration process. |
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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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