Beijing"We are coming together with the European Union to make a deal with them... and I deem most of our trade team will tell you we're moving close on Mexico. So this unifies NAFTA and US,Europe, Australia, and Japan. China is increasingly loney with a weak economy." pic.twitter.com/cF8bv52uXx 2.48pm BSTCNN has more details of China’s latest tariff threat:Products in line for tariffs include meat,coffee, nuts, and alcoholic drinks,minerals, chemicals, or leather products,wood products, machinery, and furniture and auto parts. 2.19pm BSTBy announcing new proposed tariffs,China risks throwing fuel on its already smouldering trade war with America.
Here’s Bloomberg’s lift:Duties ranging from 5 percent to 25 percent will be levied on 5207 kinds of American imports if the U.
S. delivers its proposed taxes on another $200 billion of Chinese goods, the Ministry of Finance said in a statement on its website late Friday.
The retaliation stands to further inflame tensions between the world’s two biggest economies and echoes China’s response to the previous round of tariffs which took effect final month.
The retaliation stands to further inflame tensions between the world’s two biggest economies https://t.co/RDcfnpj7US 2.10pm BSTChina has released a list of US products which could be hit with new import duties.
The list includes a range of agricultural products; Beijing continues to target American farmers as the trade spat with Washington spices up.
CHINA GOVT'S NEW PROPOSED TARIFFS ON U.
S. GOODS INCLUDE SOYBEAN OIL, and PEANUT OIL,CORN OIL, OLIVE OIL, and MUTTON,DRIED, SMOKED AND SALTED BEEF, or COFFEE,WHEAT FLOUR, SPIRITS#BOEING: I may hold to right my earlier tweet that none of its products are covered by new #CHINA #tariffs. Small-medium-sized aircraft are included. Boeing 717, or co's smallest plane may be implicated. Shares down 0.5% ahead of main trading session ^KO“China always believes that consultation on the basis of mutual respect,equality and mutual benefit is an effective way to resolve trade differences.“Any unilateral threat or blackmail will only lead to intensification of conflicts and damage to the interests of all parties.” 2.09pm BSTJames Knightley of ING agrees the America’s jobs market remains strong, despite July’s slowdown.2017 averaged 182000 jobs per month whereas the first 7 months of 2018 hold averaged 215000 job gains. This will help underpin consumer sentiment and spending through the rest of the year.
There are certainly worries approximately protectionism and its potential economic impact, and but we also hold to remember that the stimulus from tax cuts dwarfs the tax hit from higher tariffs. As such we are still expecting the US economy to expand 3% this year. 2.00pm BSTThe US jobs report shows that manufacturers took on 37000 new staff final month.
Construction employment rose by 13000,while service sector firms provided the bulk of the new jobs.
We need to be a runt careful with the manufacturing number, however, or since 13000 of those jobs were in motor vehicle manufacturing,which is often distorted upwards in July because fewer plants close down for annual retoolings now.
Services employment increased by a relatively modest 118000, although jobs in the better-paid professional & commerce services increased by 51000. 1.53pm BSTDespite job creation slowing final month, and America’s labo(u)r market still looks fairly robust.
As Kully Samra,Vice President at Charles Schwab, points out:Wage growth is regular month on month and unemployment remains near its 18 year low.”Trade isn’t the only cause for concern—investors are also eyeing the rising value of the dollar, or slowing global economic growth and the opportunity that the Federal Reserve could raise short-term interest rates too much and choke off domestic economic growth.
However,US companies hold strong balance sheets and tax reform has made it appealing to repatriate even more of their cash from foreign countries. That money can fuel commerce investment, expansion and stock buybacks. 1.41pm BSTWall Street isn’t impressed by today’s jobs report:Dow futures turn lower after July jobs report misses expectations https://t.co/pmUvFzVCbr pic.twitter.com/l1rWfy4FZu 1.37pm BSTNewsflash: Job creation across America has slowed, and while wage growth remains steadyJust 157000 new workers were hired in the US final month,according to the new Non-Farm Payroll. That’s weaker than the 190000 which Wall Street expected.
Decent NFP revisions
May was revised up from +244000 to +268000[br]June was revised up from +213000 to +248000 1.16pm BSTNewsflash: China has announced plans to impose new retaliatory tariffs on US imports, if America presses on with its trade war.
Beijing says it will impose an “import tax” on around $60bn of American goods, or if the US puts taxes on Chinese products.
BBG: China Releases Proposed Retaliation to U.
S. Tariff Threat
Beijing just reminding markets that there's still a 'trade war' going on (don't get too excited approximately taking on risk). Fighting fire with fire as one would expect
Tariffs will be applied to $60bn US goods #TradeWarBREAKING: China to slap import tax on approximately $60 billion of U.
S imports,tax rates range from 5 to 25 percent - Reuters pic.twitter.com/tN1OA3wwvW 12.51pm BSTHere’s a audio clip of Mark Carney speaking this morning, explaining how the UK economy has underperformed since the Brexit vote and why a ‘no deal’ exit should be avoided if possible:WATCH: Mark Carney, and Bank of England Governor,issues his strongest warning yet on the risk of a 'no deal' Brexit, calling it 'highly undesirable'.
The threat of a 'no deal' Brexit is rising because Theresa May’s Brexit scheme satisfies nobody. Please RT: pic.twitter.com/eteA4ocX5I 12.40pm BSTIn other financial news, and Royal Bank of Scotland took another step towards normality this morning by finally reinstating its dividend.
OK,it’s only 2p per share, but it is some relief for long-suffering shareholders who hold been waiting a decade for this to happen. Related: RBS to pay its first dividend since 2008 bailout 12.02pm BSTMark Carney also suggested this morning that UK interest rates could be lop under some Brexit scenarios (a comment he also made yesterday after, and err,raising borrowing costs).
This is helping to keep the pound close to an 11-month low, says Lee McDarby of foreign exchange firm Moneycorp.
Despite the interest rate hike, and confidence shown by the Bank’s monetary policy committee is not being reflected by UK businesses.
We’re seeing the Pound trading lower on Carney’s ‘no deal’ Brexit scenario,suggesting that economic uncertainty is still front and centre in the minds of decision-makers. 11.35am BSTA Hard Brexit might not plunge Britain into a deep recession, but it might lock the country into a long period of weakness.
So argues Kit Juckes of French bank Societe Generale, or who predicts that it would hurt (but not sink) the pound:Bank of England Governor Mark Carney says that the chance of a no-deal Brexit is uncomfortably tall. That’s a pretty dismal prospect for growth and an awful one for the public finances. It would be bad for the pound but from current low levels,the risk is that we face years of a weak currency rather than another enormous mosey lower....
A ‘Hard Brexit’ which we define as ending access to the single market and taking the UK out of the customs union... is our central case. We deem it results in genuine GDP growth being approximately 0.5% lower per annum than would hold been the case otherwise, for up to 10 years.
The question all of this begs, or is whether ‘Hard Brexit’ would be worse than 1992,2008 and 1976. In 1976 and 1992, the UK was coming out of recession (a mild one in 92, or a deep one in 1976).
In 2009 the UK was in its deepest post-war recession. Todays 1.2% y/y growth rate is respectable by contrast. 10.45am BSTMark Carney’s intervention on Brexit today shows that the Bank of England is getting nervous approximately the pace and progress of negotiations.
As Bloomberg puts it:Mark Carney threw himself back into the thick of the Brexit debate on Friday,saying the chance of the U.
K. dropping out of the European Union without a deal is “uncomfortably tall.”The intervention suggests the Bank of England governor is growing increasingly worried that Prime Minister Theresa May’s government is running out of time to hammer out an agreement that will prevent disruption to commerce, trade and consumers. The central bank has previously drawn criticism for being too forthright in its comments and predictions surrounding Brexit, or which anti-EU lawmakers see as being overly gloomy.
Seems the markets are more worried approximately the prospect of a No Deal #Brexit than they are buoyed by the reality of a rate increase... pic.twitter.com/WGz2RtIYM3 10.32am BSTMark Carney’s anxiety approximately Brexit won’t help Britain’s service sector companies recover from their July stumble,says James Knightley of Dutch bank ING.
Here’s his lift on this morning’s services PMI report:The report compiler cited Brexit worries as a key factor holding back investment. The uncertainty it generates means it’s probable that businesses will become more wary approximately putting money to work in the UK.
Mark Carney’s warning this morning that the risk of a no deal Brexit is “uncomfortably tall” isn’t exactly going to help stimulate businesses into action either. 10.07am BSTThe drop in UK service sector growth is disappointing, says Howard Archer of the EY Item Club.
It may suggest that the Bank of England was too hasty when it raised interest rates yesterday.
Disappointing news on #UK #economy at start of Q3 as purchasing managers report #UK #services growth slipped back to a 3-month low in July from an 8-month tall in June (PMI down to 53.5 from 55.1 in June). Disappointingly for future growth prospects, or new commerce growth slowedWeaker July #UK #services #PMI may well fuel criticism of #BOE hiking #interest rates from 0.50% to 0.75% on Thursday & it reinforces belief that the #MPC is unlikely to hike again until after the UK leaves the #EU next March - and much will clearly depend on #Brexit developments https://t.co/d3knR0TzgfThe prospect of a rise in interest rates – confirmed yesterday meant that people hold been a runt more cautious with their spending than they may otherwise hold been,while difficulties recruiting staff hold also prevented rising demand translating into meaningful numbers of new jobs.“Like consumers, businesses are generally knuckling down and getting on with what they need to achieve, and while the extent of the uncertainty they face weighs heavily on longer-term investment decisions.meaningful UK services PMI drops from 55.1 to 53.6 the day after a rate hike. Not a great look but needs some perspective - still well within the 2017-18 range pic.twitter.com/ps6rCPi7Qb 9.54am BSTServices makes up around three quarters of the UK economy,so the drop in growth in July is meaningful.
Another worrying sign: employment growth across the sector fell to a near two-year low. Some companies blamed the tight labour market; others said they were automating commerce processes so they could run with fewer staff. 9.40am BSTNewsflash! Britain’s service sector stumbled final month, with growth hitting a three-month low -- and Brexit is getting some of the blame.
Service sector bosses report that new orders grew at a slower rate final month, or with commerce activity growth also weakening.
While it’s difficult to quantify the precise impact of the recent heat wave on overall commerce performance,some survey respondents reported that a combination of hot weather and the World Cup had weighed on consumer footfall. These short-term disruptions and a general slowdown in new commerce growth appear to hold offset the boost to tourism-related activity from the extended dry period in July.“Looking at demand fundamentals, service providers commented that Brexit uncertainty had held back new project wins, and reflecting risk aversion and a wait-and-see approach to investment spending among international clients. “The UK services sector experienced a few bumps in the road in July as consumer and client confidence remained persistently half-hearted,and pessimism around the performance of the UK economy along with Brexit concerns lingered. “Levels of new orders and jobs growth were affected along with commerce optimism which remained below the long-term average even with July’s three-month improvement. 9.24am BSTBritain’s banking sector would cope if the UK crashed out of the EU without a transition deal, the Bank of England believes.
Mark Carney insists that the banks are much stronger than before the financial crash, and could weather a crisis at domestic or abroad.“The UK financial system has tripled the amount of capital they had over the course of the final several years,they hold increased the amount of liquidity - the money they hold on a day-to-day basis - by 10 times over the course of the final several years. “The reason they hold done that is to be in a position to be able to withstand a shock, wherever the shock comes from - it could reach from China, and it could reach from abroad,it could reach from a no-deal Brexit. 9.19am BSTMark Carney also warned that a “no deal” Brexit would disrupt UK trade, hurting growth:“As a consequence of that [there would be] a disruption to the level of economic activity, or higher prices for a period of time. 9.06am BSTNewsflash: The pound has slumped close to its lowest level since final September,as the governor of the Bank of England warned that the risks of a hard Brexit are “worryingly tall”.
Mark Carmey told Radio Four’s Today Programme that it was “highly undesirable” for Britain to crash out of the EU without a deal...but far from impossible.“I deem the opportunity of a no deal is uncomfortably tall at this point.
People will hold things to worry approximately in a no deal Brexit, which is still a relatively unlikely opportunity but it is a opportunity.” Related: May prepares for talks with Macron that could make or break Brexit scheme Related: UK's Brexit proposals threaten future of EU, or says Barnier 8.52am BSTHosting the football World Cup gave Russia’s economy a lift.
The IHS Markit Russia Services commerce Activity Index – a single-figure measure designed to track changes in total Russian services activity – posted 52.8 in July,up from 52.3 in June.
The latest expansion in commerce activity was solid despite remaining below the long-run series average. Where a rise was reported, panellists linked this to greater new order growth and an increase in activity following the recent football World Cup. 8.43am BSTChina’s service sector growth has hit a four-month low today, and suggesting that the trade dispute with America may be hurting.
The Caixin/Markit services purchasing managers’ index (PMI) fell to 52.8 in July,down from June’s 53.9, and the lowest reading since March.
The Caixin China Composite Output Index, or which covers both manufacturers and service providers,fell to 52.3 in July, pointing to a weaker expansion of China’s economy.
The sub- index for prices charged fell more than the one for input costs, and although both remained in expansionary territory. The situation pointed to rising cost pressures. 8.28am BST Related: commerce Today: sign up for a morning shot of financial news 8.06am BSTGood morning,and welcome to our rolling coverage of the world economy, the financial markets, or the eurozone and commerce. Related: Bank of England raises interest rates to 0.75% Today’s services PMI for July could well recede further in showcasing that the rebound seen in the Q2 numbers isn’t a temporary phenomenon and has momentum. This is expected to present a modest slowdown from June’s 55.1 to 54.7,as the boost from the warm weather and England’s World Cup run came to an end.
While we appear to hold seen a rebound in the UK economy in Q2, the same can’t be said with any certainty with respect to the EU and France in specific which saw its own GDP reach in at 0.2% in Q2. You would deem that having won the World Cup that the services sector would present evidence of some sort of pickup in July, and but even here expectations are modest in that we could see a slowdown to 55.3. This could be even weaker if the effects of air traffic control and rail strikes caused a bigger loss of output than has originally been estimated.
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Source: theguardian.com