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China’s summer consumption booms, as strong momentum expected to remain a major economic booster: experts

As the days get hotter and the sun sets later, the vibrant summer season has been injecting more vitality into China’s economic revival, spurred by diversified seasonal consumption demand, from ways to cool down to shopping at bustling night markets. Observers said that the consumption patterns that have emerged in the summer, such as the surging sales of air conditioners and related products, as well as busy night markets and tourism, all vividly demonstrate China’s steady economic recovery in the consumption sector. The continuous revitalizing domestic demand will also shore ...

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Bank of Japan to trim bond buying, keeps rates steady

The Bank of Japan said on Friday it would start trimming its huge bond purchases and announce a detailed plan next month on reducing its nearly $5 trillion balance sheet, taking another step toward unwinding its massive monetary stimulus. Governor Kazuo Ueda also said he would not rule out raising interest rates in July as weakness in the yen pushes up import costs, suggesting the BOJ was retaining a hawkish stance despite recent signs of weakness in consumption and the broader economy. “Depending on economic and price data that become ...

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Japan core inflation set to accelerate, keeping BOJ on track for more rate hikes

Japan’s nationwide core consumer inflation likely accelerated to 2.6% year-on-year in May from 2.2% in the previous month, a Reuters poll of 18 economists showed on Friday, keeping the central bank on track to raise interest rates further in coming months. While the core consumer price index (CPI), which excludes fresh food, is set have received a boost from an increase in renewable energy levy, some analysts expect a slight slowdown in the so-called narrower core-core inflation excluding fresh food and energy. The core inflation has not fallen below the ...

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Inflation expected to average 4.5% for current fiscal year: CRISIL

Leading ratings and economic research firm CRISIL is of the view that inflation is expected to average 4.5 per cent for the current financial year. “Assuming a normal monsoon, we expect food inflation to soften, while non-food inflation could see an uptick but is expected to remain soft on the back of benign commodity prices,” CRISIL said. The rating firm said that consumer price index (CPI) inflation moderated marginally to 4.75 per cent in May from 4.8 per cent in April 2024. “Non-food categories pulled down the headline inflation, but ...

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French debt’s risk premium hits 7-year high as election fears rock markets

The risk premium investors are demandingto hold French government bonds rose to its highest level since early 2017 on Friday, as PresidentEmmanuel Macron’s grip on power weakened after left-wing parties united against him. The spread between French and German borrowing costs was on track for its biggest weekly rise since the euro zone debt crisis in 2011, at more than 25 basis points (bps). The difference between French and German 10-year borrowing costs DE10FR10=RR rose to 77 basis points (bps) on Friday, as German yields fell, while French yields held ...

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Premier Li says China’s economic upgrade to bring new opportunities for global development

Premier Li Qiang said here Friday that the upgrading of China’s economic structure will bring new opportunities for global development. Li, who is on an official visit to New Zealand, made the remarks when meeting with representatives from industrial and commercial circles of the country. China is pursuing modernization through high-quality development and various upgrades will bring new opportunities for global development, he noted. Firstly, he said, consumption upgrading will unleash new market demands, and there will be an increasing need for high-quality goods such as dairy and health products ...

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UK public inflation views cool and more see value in rate cuts, BoE survey shows

The British public’s expectations for inflation cooled last month and the highest proportion since the global financial crisis thought it would be best for the economy if interest rates fell, a Bank of England survey showed on Friday. Inflation expectations for a year from now stood at 2.8%, down from 3.0% in February, the survey showed. The highest share of Britons since November 2008 – 42% – said it would be best for the economy if interest rates fell, up from 41% in February. Source: Reuters (Reporting by Andy Bruce; ...

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India’s May wholesale prices rose 2.61% Y/Y, most in over a year

India’s wholesale prices rose 2.61% in May, the most in more than a year, mainly driven by food items, government data showed on Friday. May inflation was higher than the 2.5% expected by economists polled by Reuters and up from 1.26% in April. Food prices rose 7.4% on year compared with an increase of 5.52% in April, while prices of vegetables were up 32.42% on year against a 27.94% rise in the previous month. Manufactured product prices rose 0.78% year-on-year against a 0.42% drop in the previous month. Fuel and ...

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India’s May exports up 9.1% y/y as outlook improves

India’s merchandise exports rose 9.1% to$38.13 billion in May from a year earlier, helped by an increase in shipments of engineering goods, commercial vehicles and smartphones, government data showed on Friday. Merchandise imports in the same monthrose 7.7% year-on-year to$61.91 billion – widening the trade deficit to $23.78 billion.Economists had expected a deficit of $19.5 billion, according to a Reuters poll. In April, trade deficit was of$19.1 billion. Analysts say merchandise exports – which contracted 3.1% to $437 billion in the previous fiscal year – are likely to pick up ...

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THINK Ahead: Central banks take one for the team

Hat-tricks and own goals Euro 2024 kicks off today, so brace yourself. Expect tortured football analogies aplenty for the next month. Remember, economists like me don’t get out much. I don’t even know much about football, so this could be painful. Anyway, some good news at last: both US consumer and producer price inflation came in lower than expected this week. One month doesn’t make a trend, so it’s not exactly a half-time equaliser (am I doing this right?). Fed gaffer Jay Powell was understandably reluctant to sound the all-clear ...

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ECB’s Lagarde dodges question about French market turmoil

European Central Bank President Christine Lagarde largely dodged a question about turmoil in French financial markets on Friday, merely saying the ECB would deliver on its inflation target. French markets endured another brutal sell-off on Friday as investors cut their positions ahead of a snap election that might give a majority to the far right. Lagarde was asked if the ECB would consider using an emergency bond-buying scheme to support France, after the risk premium on French bonds jumped by the most since 2011. “I’m not going to comment on ...

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G7 steps up pressure on Russia, tackles China’s business practices

Leaders of the Group of Seven major democracies held their second and final day of talks on Friday at their annual summit. Here are some of the key things that emerged from a draft of the statement to be released at the end of the meetings. RUSSIA The leaders agreed on an outline deal on Thursday to provide $50 billion of loans for Ukraine using interest from Russian sovereign assets frozen after Moscow invaded its neighbour in 2022. The summit’s communique includes a pledge to continue applying significant pressure on ...

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Europe prepares for China retaliation after EU imposes EV tariffs

As retaliation for the EU’s tariffs on Chinese electric vehicles, China could potentially slap duties on things like European pork and dairy products, as well as brandy and luxury goods. The European Union (EU) has recently revealed that it has provisionally concluded that it would be applying tariffs to Chinese electric vehicles (EVs) of up to 38.1%. This is in order to curb the flood of much cheaper Chinese electric vehicles that are being imported into the EU, which in turn is posing a competition threat to European-made EVs. The ...

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US import prices post first drop in five months in May

U.S. import prices unexpectedly fell in May amid lower prices for energy products, providing another boost to the domestic inflation outlook. The report from the Labor Department on Friday combined with data this week showing tame inflation readings last month to keep a September interest rate cut from the Federal Reserve on the table. U.S. central bank officials on Wednesday pushed out the start of rate cuts to perhaps as late as December, with policymakers projecting only a single quarter-percentage-point reduction for this year. “Fed officials did not see what ...

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US consumer sentiment ebbs in June; inflation worries linger

U.S. consumer sentiment deteriorated in June as households worried about inflation and incomes, a survey showed on Friday. The University of Michigan’s preliminary reading on the overall index of consumer sentiment came in at 65.6 this month, compared to a final reading of 69.1in May. Economists polled by Reuters had forecast a preliminary reading of 72.0. “Assessments of personal finances dipped, due to modestly rising concerns over high prices as well as weakening incomes,” said Surveys of Consumers Director Joanne Hsu. “Overall, consumers perceive few changes in the economy from ...

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