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French Industrial Production Rose in June

French industrial production rose in June on increases in energy and transportation materials, statistics showed Friday. Industrial production in the eurozone’s second-largest economy rose 0.6% in June from May, statistics agency Insee said. That was in line with the forecast from economists polled by The Wall Street Journal. The figures are an improvement from the 0.2% decline recorded in May. Source: Dow Jones

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China’s Upside-Down Money Market Tests the PBOC’s Role

It’s now cheaper for Chinese financial institutions to borrow from their peers than to seek funds from the central bank — a situation not seen in nearly three years. Amid ample central bank liquidity, funding costs in the money market have fallen below the interest rate of seven-day reverse repurchase agreements offered by the People’s Bank of China as eases policy in a bid to shore up the economy. The inversion is the first since September 2015, when the central bank injected large amount of liquidity to stamp out risks ...

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Japan’s economy rebounds on brisk spending but trade rifts cloud outlook

Japan’s economy grew more than expected in the second quarter, helped by strong household and business spending and recovering from an earlier contraction, but global trade tensions loom as major risks to the export and investment outlook. The rebound in consumer spending is a welcome development for the Bank of Japan but unlikely to be enough to change its stance that interest rates need to stay low for a very long time to end the country’s deflationary mindset. While analysts expect the economy to sustain a recovery, some expect escalating ...

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U.S. Consumer Comfort Rose to New 17-Year High on Economic Views

U.S. consumer sentiment advanced to a 17-year high, elevated by rosier views of the economy and personal finances, the Bloomberg Consumer Comfort Index showed Thursday. Highlights of Consumer Comfort (Week Ended Aug. 5) -Weekly index rose to 59.3, the highest since Feb. 2001, from 58.6 -Gauge of current views of the economy climbed to 17-year high of 61.9 from 60.3 -Measure of personal finances rose to 66, matching a post-2001 high, from 65.6 -Index tracking buying climate increased to 50.1 from 49.9 Key Takeaways Confidence continues to strengthen amid a ...

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China’s Regional Growth Divergence Adds to Debt Policy Dilemma

China is growing at a very steady pace — fluctuating between 6.7 percent and 6.9 percent for the past three years. But under the hood, there’s a wide divergence among its 31 regions in the first half of this year — from a 2.5 percent expansion for northeastern Jilin to a 10 percent boom for southwestern Guizhou. Such divergence makes it hard to crack down on debt across the nation with a one-size-fits-all policy, as the stimulus that may be needed in Inner Mongolia might cause too much lending in ...

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Euro zone banks punished for Turkish exposure

Euro zone bank shares tumbled on Friday on concerns about their exposure to Turkey as the lira fell to yet another record low with a defiant government showing few, if any signs, it is ready to take decisive steps to stabilise the currency. A widening rift with the United States, its main NATO ally, and President Tayyip Erdogan’s grip on monetary policy under a new powerful executive presidency have helped to drive the lira down by more than 35 percent this year, a particular worry for Turkish banks as over ...

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U.K. Economy Rebounds But Services End Quarter on a Weak Note

The U.K. economy bounced back from its turgid start to the year in the second quarter but the dominant services sector lost momentum toward the end of the period. Gross domestic product increased 0.4 percent between April and June, in line with the median forecast in a Bloomberg survey, figures from the Office for National Statistics Friday showed. In June alone, output gained just 0.1 percent, its weakest performance since March. While manufacturing and construction posted reasonable gains, services output was entirely unchanged with hotels and restaurants and business services ...

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U.S. curbs on Russian banks would be act of economic war – PM Medvedev

Russia would consider any U.S. move to curb the operations of Russian banks or their foreign currency dealings a declaration of economic war, Prime Minister Dmitry Medvedev said on Friday. The United States announced a new round of sanctions on Wednesday targeting Russia that pushed the rouble to two-year lows and sparked a wider sell-off over fears Russia was locked in a spiral of never-ending sanctions. Separate legislation introduced last week in draft form by Republican and Democratic senators proposes curbs on the operations of several state-owned Russian banks in ...

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The Leaders and Laggards Behind India’s World-Beating Growth

India’s economic activity is picking up, boosted by a long-awaited recovery in consumption that’s helped cut down slack in the economy and underpinned sales of everything from cars to housing. Almost 60 percent of gross domestic product comes from private spending, according to estimates from New York-based CEIC Data Co., with the pick-up helping to fuel growth of more than 7 percent this year, making India the world’s fastest-growing major economy. Yet the performance isn’t uniform across all industries, with the banking and power sectors facing distress and global trade ...

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Fed Dove Evans Veers in Hawkish Direction Over Rate Outlook

The Federal Reserve may need to raise interest rates to “somewhat restrictive” levels to combat the effects of recent fiscal stimulus on the U.S. economy, said Chicago Fed President Charles Evans in hawkish comments from one of the central bank’s most reliable doves. “If inflation continues to be on the order of 2, 2.2 (percent) — I’m not expecting it to get as high as 2.5 — that suggests only a modest amount of restrictiveness above our neutral rate might be called for in 2020,” Evans told reporters Thursday in ...

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Emerging market turmoil boosts safe-haven euro zone debt, Italy suffers

Most euro zone bond yields fell on Friday, with German borrowing costs at three-week lows as turmoil in major emerging markets Turkey and Russia boosted demand for safe-haven government debt. The exception was Italy. Its bond yields, already pushed up by concerns about upcoming budget talks, faced additional upward pressure as risk aversion gripped world markets. Turkey’s lira hit the latest in a string of record lows on Friday on the back of a deepening rift with the United States, worries about its own economy and lack of action from ...

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U.S. inflation pressures rise in July; Fed on track to lift rates

U.S. consumer prices rose in July and the underlying trend continued to strengthen, pointing to a steady increase in inflation pressures that keeps the Federal Reserve on track to gradually raise interest rates. The Labor Department said on Friday its Consumer Price Index advanced 0.2 percent, the bulk of which was due to a rise in the cost of shelter, driven by higher rents. The CPI rose 0.1 percent in June. In the 12 months through July, the CPI increased 2.9 percent, matching the increase in June. Excluding the volatile ...

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Turkey’s Erdogan dismisses lira fears, says ‘we have our God’

Turkish President Tayyip Erdogan has dismissed concerns over the tumbling lira, calling on Turks to “have no worries”, after the currency hit record lows in recent weeks on the back of a widening rift with the United States. Ankara and Washington, NATO allies, have been at loggerheads over the detention in Turkey of U.S. evangelical pastor Andrew Brunson on terrorism charges, prompting U.S. sanctions on two of Erdogan’s ministers and threats of trade restrictions. Early on Friday, the lira hit a new record low, plunging to as far as 6 ...

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China Has a Stealth $410 Billion Stash to Boost the Economy

Stashed away around China is a pile of cash larger than the annual economic output of Norway. Governments at all levels across the nation have a total of 2.8 trillion yuan ($410 billion) saved, according to researchers at Industrial Bank Co., and that money could be used to boost economic growth in the event of further escalation of the trade war. The money is from unspent revenues, profits from land sales, levies or profit from state firms, expected bond revenues and other sources. The hoard exceeds the targeted national budget ...

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Germany maintains large surplus with U.S. despite trade friction

Germany’s exports to the United States in the first half of this year were worth 24.4 billion euros (£22.19 billion) more than its imports of U.S. goods, data from the Federal Statistics Office showed on Friday. The trade surplus was 100 million euros less than last year, but still meant Germany has the largest trade surplus with the United States than any other country, something U.S. President Donald Trump has vowed to reverse. Germany’s trade surplus has also come under attack from the International Monetary Fund, which says it contributes ...

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