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Factory data dampen global ‘soft landing’ hopes

Global factory growth stalled in June as higher prices and a darker economic outlook left consumers wary of making purchases, while China’s strict COVID-19 lockdowns and Russia’s invasion of Ukraine added to supply chain disruptions, surveys showed. They were the latest signs pointing to the risk of all-out recession in the global economy, coming after the world’s top chipmakers said they were facing waning demand and as central bankers warned of painful interest rate hikes ahead. “Between central banks digging their heels in to counter inflation and growing fears there ...

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We’ll be with you on ‘long road’ to membership, EU tells Ukraine

Ukraine now has a “very clear European perspective” but the road to EU membership will take time and require hard work, the president of the EU executive told the country’s parliament on Friday. EU leaders last week granted Ukraine candidate status to join the bloc, formally opening a process that is expected to take years before it becomes a member of the union that now comprises 27 countries. In a speech by video-link to the Ukrainian assembly, Ursula von der Leyen underlined the progress made by the country in its ...

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Sovereign Sector Outlook Revised to Neutral on Ukraine War Impact

The deterioration in global sovereign credit conditions this year relative to our expectations at end-2021 has caused Fitch Ratings to change its global sovereign sector outlook to neutral from improving. The impact of the Ukraine war and consequent sanctions on geopolitical risk, trade and capital flows, and economic growth and inflation will not be resolved in 2H22. Policy responses are driving the fiscal effects of inflation, making post-Covid-19 pandemic consolidation that was evident last year less certain. Meanwhile the Federal Reserve and most other major central banks will tighten policy ...

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Any ECB rate hike above zero will depend on data, Panetta says

The European Central Bank is on course to lift its interest rates out of negative territory but any hike beyond that will depend on incoming data as the outlook is uncertain, ECB board member Fabio Panetta said on Friday. The ECB is due to raise rates for the first time in over a decade this month in the face of record-high inflation and unveil a new bond-buying scheme designed to cap borrowing costs for the most indebted members, such as Italy. Panetta, Italy’s appointee to the ECB’s board, backed the ...

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Drop in demand weighs on German manufacturing, outlook darkens -PMI

A sharp fall in new orders weighed on German manufacturing activity in June, darkening the outlook for Europe’s largest economy, a survey showed on Friday. S&P Global’s final Purchasing Managers’ Index (PMI) for manufacturing, which accounts for about a fifth of Germany’s economy, fell to 52.0 in June from May’s final reading of 54.8, in line with analysts’ expectations and with a flash estimate. An index on new orders came in a 43.3, falling from 47.0 in May to hit the lowest level since May 2020 and dropping further below ...

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Japan Inc. disagrees with BOJ’s view cost-push inflation will be temporary

Japanese companies expect inflation to stay around the central bank’s 2% target for years to come, a survey showed on Friday, disagreeing with Bank of Japan Governor Haruhiko Kuroda’s view that the recent cost-driven price rise will prove temporary. The BOJ’s “tankan” quarterly survey showed firms expect inflation to hit 2.4% this year, up from 1.8% projected in the previous poll. They see inflation at 2.0% three years from now, also up from the March forecast of 1.6%. Corporate inflation expectations five years ahead stood at 1.9%, the June tankan ...

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China-proposed BRI brings tangible benefits

China welcomes more countries and institutions to participate in the high-quality growth of the Belt and Road Initiative, injecting fresh momentum into global economic development and people’s well-being, said the Ministry of Commerce on Thursday. There is broad space for cooperation in the field of global infrastructure development. China takes an open attitude toward all cooperation initiatives that are truly conducive in promoting connectivity, economic growth, people’s living standards and social progress of all countries, Shu Jueting, the ministry’s spokeswoman, told a news conference. Shu made the remark after being ...

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U.S. factory activity slows to two-year low in June

U.S. manufacturing activity slowed more than expected in June, with a measure of new orders contracting for the first time in two years, signs that the economy was cooling amid aggressive monetary policy tightening by the Federal Reserve. The survey from the Institute for Supply Management (ISM) on Friday also showed a gauge of factory employment contracting for a second straight month, though an “overwhelming majority” of companies indicated they were hiring. The slowdown in manufacturing followed on the heels of moderate consumer spending growth in May as well as ...

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China’s June factory activity expands at fastest pace in 13 months – Caixin PMI

China’s manufacturing activity expanded at its fastest in 13 months in June, buoyed by a strong rebound in output, as the lifting of COVID lockdowns sent factories racing to meet recovering demand, a private sector poll showed on Friday. The Caixin/Markit manufacturing purchasing managers’ index (PMI) rose to 51.7 in June, also indicating the first expansion in four months, from 48.1 in the previous month. That was well above analysts’ expectations for an up-tick to 50.1. The 50-point index mark separates growth from contraction on a monthly basis. The recovery ...

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U.S. dollar share of FX reserves steady in Q1, euro share dips, IMF says

The U.S. dollar’s share of currency reserves reported to the International Monetary Fund was 58.8% in the first quarter, unchanged from that of the last three months of 2021, IMF data showed on Thursday. The greenback remains the largest-held currency reserve by global central banks. The euro’s share, however, slipped to 20% in the first quarter from 20.6% in the previous three months. In 2009, the euro hit its highest share at 28%. Global reserves, which are reported in U.S. dollars, are assets of central banks held in different currencies ...

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Global credit conditions more negative amid rising borrowing costs, slower economy growth: Moody’s

Moody’s Investors Service on Thursday said global credit conditions have turned more negative amid rising borrowing costs, protracted Russia-Ukraine conflict and slower economic growth. It said the surge in energy and food costs spurred by the conflict in Ukraine is weakening the purchasing power of households, raising input costs for companies and dampening investor sentiment. Among sovereign debt issuers, debt sustainability will be especially challenging for many frontier market sovereigns as their borrowing costs climb, while their economies still have not fully recovered from the COVID-19 pandemic crisis, it said.”Global ...

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Recession fears creep into ECB thinking at summer conference

European Central Bank policymakers put on a brave face at their annual gathering in the hills above the Portuguese capital and forecast further economic expansion despite looming gas shortages, but in private conversations recession fears were increasingly dominant. Growth has slowed sharply this year amid the fallout from Russia’s war in Ukraine, negating the economic rebound from pandemic lockdowns and raising the risk that any further escalation in the conflict could choke off whatever growth is still left. That would complicate life for the ECB, which is preparing for its ...

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US spending breakdown fuels recession fears

Inflation slows, but spending downturn warrants the headlines The May personal income and spending report offers some good news in that the Federal Reserve’s favoured measure of inflation – the core PCE deflator – slowed from 4.9% to 4.7% year-on-year versus the consensus forecast of 4.8%, but the activity front is not pleasant viewing. Real consumer spending fell -0.4% month-on-month rather than -0.3% as the consensus predicted, while April’s reading was revised down sharply from 0.7%MoM growth to 0.3%MoM. Following the large downward revisions to first-quarter consumer spending data yesterday, ...

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U.S. recession “more likely than not”, same for Europe – PIMCO

A U.S. recession over the next 12 months is “probably more likely than not”, PIMCO’s global chief investment officer for fixed income Andrew Balls said. Balls, speaking at a media webinar, put the probability at close to 50% or slightly higher. “A recession is not the only important thing. You’re clearly going to see a significant growth slowdown,” Balls said. “The inflation profile in the short term is very important. Central banks are focused on inflation credibility”. The probability of a recession is similar in Europe, possibly a bit higher, ...

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Here’s who is boycotting in America

America’s big earners are its biggest boycotters, according to an April survey of 2,100 consumers by LendingTree 37% of six-figure earners in the U.S. boycott a product or company they spent money on in the past Ex-Aide Releases Melania Trump’s Revealing 1-Word Text Message From Jan. 6 1d ago Justice Neil Gorsuch fumes that the Supreme Court ‘failed’ to ‘honor this Nation’s promises’ as it rolled back tribal authority in Oklahoma 20h ago Next up is Gen Z at 32% and Millennials at 28% 31% of Democrats tend to boycott ...

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