German inflation fell to its lowest level since February 2021 this month, preliminary data showed on Monday, helping European Central Bank doves build their case for another interest rate cut next month. German inflation eased slightly more than forecast to 1.8% in September,data from the federal statistics office showed. Analysts polled by Reuters had forecast a reading of 1.9% in September, after a year-on-year increase in consumer prices of 2.0% in August, based on data harmonised to compare with other European Union countries. The ECB, which has a 2% inflation ...

Japan’s factory output tumbled last month driven by typhoon-led disruptions in motor vehicle production and weak U.S. sales, with the government and analysts cautioning about a subdued outlook that raises the hurdle for a solid economic recovery. Industrial output fell 3.3% in August from the previous month, data released by the Ministry of Economy, Trade and Industry (METI) on Monday showed, worse than a median market forecast for a 0.9% drop. “Taking into account overseas factors, it is difficult to expect a significant increase in production in the near future, ...

A mistake by the U.S. central bank in setting interest rates during the last phase of its inflation battle is the main risk that could undercut the economy over the next year, according to a new survey of economists released as Federal Reserve Chair Jerome Powell was set to speak on Monday. Among 32 professional forecasters surveyed recently by the National Association for Business Economics, 39% cited a “monetary policy mistake” as the “greatest downside risk to the U.S. economy over the next 12 months.” By contrast, 23% regarded the ...

Britain’s economy grew more slowly than previously thought in the second quarter, but there were positive signs from household finances and business investment that could encourage finance minister Rachel Reeves as she prepares next month’s budget. Economic output expanded by 0.5% in the April-to-June period, the Office for National Statistics said on Monday. The reading was slightly weaker than a preliminary estimate for 0.6% growth in gross domestic product. Economists polled by Reuters had expected the 0.6% rise to be confirmed. The household saving ratio increased to 10.0% from 8.9% ...

Demand for a 10% stake sale in Greece’s National Bank (NBG) NBGr.AT by the country’s bank bailout fund was oversubscribed by six times on Monday, in the first day of a book-building process which ends later this week, two sources told Reuters. With the sale, Greece will conclude the re-privatisation of its banks, 12 years after stepping in to bail them out during a debt crisis that nearly drove the country out of the euro zone. “There is strong demand from investors,” an official with knowledge of the matter told ...

A large drop for IP Japan’s industrial production fell more than expected in August, by -3.3% month-on-month (vs. 3.1% in July, -0.5% market consensus). We believe that the monthly fluctuation is related to the auto production disruptions caused by the safety scandal. We also think that the government’s alert on mega-earthquake warnings and typhoon-related factory closures also probably exaggerated the fall in production activity in August. However, Toyota resumed production in early September, and there have been no major earthquakes since the alert – so we expect activity to return ...

India’s current account deficit widened on-year in the April-June quarter, largely due to a higher merchandise trade deficit, the central bank said on Monday. The current account deficit stood at $9.7 billion, or 1.1% of the GDP, in the fiscal first quarter, compared with a deficit of $8.9 billion or 1% of GDP in the same quarter a year ago, the Reserve Bank of India (RBI) said in a release. The current account had logged a revisedsurplus of $4.6 billion or 0.5% of the GDP in the preceding quarter. “The ...

The Bank of Japan on Monday announced further reductions to its monthly Japanese government bond (JGB) purchases for the fourth quarter, as the central bank pushes ahead with plans to slim down its massive bond holdings. The BOJ willcut monthly Japanese government bond (JGB) purchases by another 400 billion yen ($2.81 billion), bringing the total to about 4.9 trillion yen per month in October-December, according to its latest quarterly purchase schedule. Reductions were seen for purchase amounts of 1-3 year, 3-5 year, and 5-10 year JGBs, while the rest were ...

The European Central Bank is increasingly confident that inflation will fall back to its 2% target and this should be reflected in its October policy decision, ECB President Christine Lagarde said. The ECB cut interest rates from record highs in June, and cut again earlier this month, but Lagarde gave few hints at the time about the bank’s next move, leaving markets guessing. Her comments on Monday will bolster already abundant bets on a further cut in October given a rapid deterioration of the growth outlook and falling energy costs. ...

China’s factory activity shrank for a fifth straight month and the services sector slowed sharply in September, suggesting Beijing will need even more stimulus to hit its 2024 growth target with only three months left in the year. The National Bureau of Statistics (NBS) purchasing managers’ index (PMI) released on Monday nudged up to 49.8 in September from 49.1 in August, still below the 50-mark separating growth from contraction but beating a median forecast of 49.5 in a Reuters poll. The reading was the highest in five months. However, paired ...

A trend of decreased taxes on businesses and individuals during the pandemic and the subsequent inflationary period is now showing signs of deceleration and reversal, according to a new OECD report. Tax Policy Reforms 2024 describes the tax reforms implemented in 2023 across 90 jurisdictions, including all OECD countries. It also identifies longer-term reform trends, highlighting how governments have used tax policy to respond to consecutive crises, high levels of inflation, and long-term structural challenges. The report outlines the evolving tax policy landscape as governments strive to balance the need ...

The People’s Bank of China (PBOC) will focus on expanding domestic demand, boosting confidence and promoting a sustained recovery in the world’s second-largest economy, the central bank said in a statement on Sunday. The PBOC must maintain “reasonable” liquidity levels and credit growth, the bank said after a quarterly meeting of its monetary policy committee. The yuan exchange rate must also be “basically” stable, the PBOC said. Source: Reuters (Reporting by Ryan Woo, Editing by David Goodman)

China’s economy is grappling with the significant challenge of weak consumer demand. Data from second-quarter GDP growth show that gross capital formation, final consumption expenditure, and net exports contributed 1.9, 2.2, and 0.6 percentage points to economic growth, respectively. Notably, the role of consumption in driving economic growth has waned, declining by 1.7 percentage points from the first quarter. This slowdown first emerged in the second quarter of last year and has been falling since. From January to August of this year, total retail sales increased by only 3.4 percent ...

China’s central bank said on Sunday it would tell banks to lower mortgage rates for existing home loans before Oct. 31, as part of sweeping policies to support the country’s beleaguered property market as the economy slows. Commercial banks should, in batches, reduce interest rates on existing mortgages to no less than 30 basis points (bps) below the Loan Prime Rate (LPR), the central bank’s benchmark rate for mortgages, according to a statement released by the People’s Bank of China (PBOC). It is expected to cut existing mortgage rates by ...

The first interest rate cut by the Federal Reserve signals a U.S. recession is imminent and a dramatic drop in financial markets could once again force the U.S. central bank to come to the rescue by buying bonds, said tail-risk hedge fund Universa. The Fed said last week it started cutting rates to recalibrate monetary policy and to maintain strength in the labor market. With inflation declining, and the economy still on relatively solid footing, many see the beginning of the easing cycle as a precursor to a so-called economic ...