Australian consumers shaken as virus lockdowns return: survey By Reuters



© Reuters. Shoppers and workers cast shadows as they cross an intersection in the central business district of Sydney

SYDNEY (Reuters) – A measure of Australian consumer sentiment showed a setback in July as renewed coronavirus lockdowns in the country’s second-largest city darkened the mood after two months of gain.

The Westpac-Melbourne Institute index of consumer sentiment fell 6.1% in July from June, when it had bounced 6.3%. The index had taken a nosedive in April as lockdowns gripped the country, but jumped by a record in May as restrictions eased.

The July fall left the index down 8.9% on the same period last year at 87.9, meaning pessimists outnumbered optimists by some margin.

“Sentiment has been rocked by the resurgence in Coronavirus cases over the last month,” said Westpac Chief Economist Bill Evans. “After averaging about 10 a day through late May and early June, new cases have lifted significantly, running at close to 200 a day in the July survey week.”

The spike forced the lockdown of much of Melbourne, the capital of the state of Victoria, and threatened to derail economic recovery.

Victoria’s sentiment index alone dived 10.4% in July from June, though the rest of the nation excluding Victoria fell a more modest 4.5%.

Westpac Banking Corp (AX:) and the Melbourne Institute surveyed 1,200 people from across the county.

The survey showed a sharp reversal on the economy with the index measuring the outlook for the economy over the next 12 months down 14%, and the index for the next five years easing 10.3%.

The measure of family finances compared to a year earlier stayed firm at 2.5%, but the outlook for the next 12 months slid 6.7%.

In a blow for hard-hit retailers, the measure of whether consumers felt it was a good time to buy a major household item dropped 2.1%.

There was better news on housing where the time to buy a new dwelling index bounced 4.1% in July, returning to its level in February before the pandemic took hold.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



British Columbia province forecasts C$12.5 billion operating deficit in 2020/21 By Reuters



© Reuters. Parq Casino in Vancouver

(Reuters) – The Canadian province of British Columbia is forecasting a C$12.5 billion ($9.2 billion) operating deficit in 2020/21, the province’s finance minister, Carole James, said on Tuesday.

James attributed the estimated deficit to the government’s emergency spending to support the businesses and individuals suffering from COVID-19 lockdowns and a significant drop in revenues due to the pandemic.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



U.S. consumer prices rebound in June By Reuters



© Reuters. FILE PHOTO: Retail shops in Brooklyn as phase one reopening continues during outbreak of the coronavirus disease (COVID-19) in New York

WASHINGTON (Reuters) – U.S. consumer prices rebounded in June after three straight monthly declines as businesses reopened, but the underlying trend suggested inflation would remain muted and allow the Federal Reserve to keep injecting money into the ailing economy.

The Labor Department said on Tuesday its consumer price index increased 0.6% last month after easing 0.1% in May. In the 12 months through June, the CPI climbed 0.6% after gaining 0.1% in May, which was the smallest year-on-year rise since September 2015.

Economists polled by Reuters had forecast the CPI increasing 0.5% in June and advancing 0.6% year-on-year.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



China Reports Positive June Customs Data, But Trade Surplus with U.S. Widens Over Tensions By Investing.com



© Reuters.

By Gina Lee

Investing.com – China reported positive customs data on Tuesday, an encouraging sign that the world’s second largest economy is recovering from the COVID-19 virus.

rose 0.5% year-on-year in June, higher than analyst expectations of a 1.5% drop and last month’s 3.3% drop. rose 2.7% year-on-year during the same month, also beating expectations of a 10% drop and a 16.7% slide in May.

Chinese exports and imports benefitted from some countries loosening lockdown measures, and the resultant uptick in economic activity. But trade volumes for the first half of the year remain well below previous years’ levels and fresh outbreaks of the virus prompted the re-implementation of lockdown measures in cities such as Melbourne and Hong Kong,

Meanwhile, the decreased to $46.42 billion, much smaller than the forecasted $58.60 billion and May’s $62.93 billion. Simmering U.S.-China tensions over trade and Hong Kong’s national security law enacted on July 1 led to a wider trade surplus with the U.S.

An increase in the trade balance “could be the major support for the second quarter’s GDP growth, but it could only help to a certain extent,” Iris Pang, chief economist for greater China at ING Bank NV, told Bloomberg ahead of the data’s release.

Investor will now be looking to a second bath of Chinese data, including GDP, due on Thursday.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Canadian firms warn over Mexico energy policy at dawn of trade deal By Reuters



© Reuters. FILE PHOTO: Trucks wait in a long queue for border customs control to cross into the U.S., at the World Trade Bridge in Nuevo Laredo

By Dave Graham (NYSE:) and David Ljunggren

MEXICO CITY/OTTAWA (Reuters) – As Mexico celebrated a new trade deal with the United States and Canada on July 1, a group of Canadian energy investors warned their government that Mexico could already be violating the agreement for failing to respect contracts.

In a letter to Canada’s Deputy Prime Minister Chrystia Freeland, Finance Minister Bill Morneau, Foreign Minister Francois-Philippe Champagne and other officials, four companies voiced concern their Mexican investments were under threat and urged the government to press Mexico on the matter.

The letter, seen by Reuters, adds to evidence of frustration among investors over energy policy under the administration of President Andres Manuel Lopez Obrador just as Mexico is trying to revive its battered economy from the impact of coronavirus.

Canada, a longstanding ally of Mexico and one of the country’s main sources of foreign direct investment (FDI), has already raised concerns about Lopez Obrador’s energy policy.

Arguing that Mexico must carve out a bigger role for the state on energy policy and become more self-sufficient, Lopez Obrador says previous Mexican governments skewed the market in favor of private investors, pushing up prices for the public.

The president has sought to renegotiate billions of dollars worth of contracts to get better terms for taxpayers.

Foreign companies, which were granted more scope to invest in Mexico under a 2013-14 energy reform enacted by Lopez Obrador’s predecessor, deny they have raised costs for the public. They say the government is not honoring existing deals.

In the letter, Canadian Solar (NASDAQ:) Inc, Atco Ltd, Northland Power (OTC:) Inc and JCM Power cited decisions to suspend testing of new renewable energy plants and to limit development and operation of power stations as steps that could put their projects in Mexico in jeopardy.

Mexican tribunals have temporarily suspended some of the measures, pending a Supreme Court decision. However, disputes over a range of policy decisions on energy extend back well into last year and have fanned uncertainty among investors.

Northland Power spokesman David Timm confirmed the company signed the letter but declined further comment, saying discussions are ongoing with both governments.

Ryan Nearing, spokesman for International Trade Minister Mary Ng, who was also sent the letter, said Canadian companies have indicated they are concerned with recent measures taken by the Mexican government which affect their energy investments.

“Canada shares these concerns, as Canadian companies have invested close to $9 billion in the energy sector, including over $3.1 billion in renewable energy,” Nearing said.

Ng raised this issue on May 29 with Mexican Economy Minister Graciela Marquez and two agreed to keep up dialogue on it, Nearing added. Canada’s embassy in Mexico has also been actively engaged with Mexico’s government on the matter, he said.

The other companies did not immediately respond to requests for comment, nor did Mexico’s energy ministry.

The four companies have various investments in Mexico, including solar and hydroelectric power projects.

The letter, which was also addressed to Natural Resources Minister Seamus O’Regan and Environment Minister Jonathan Wilkinson, was dated July 1, the same day on which the trade accord known as the United States-Mexico-Canada Agreement (USMCA) came into force.

Mexico’s actions risked breaching commitments under USMCA and other trade deals it had signed, the firms argued.

Six weeks previously, Canada and the European Union sent letters to the Mexican government to warn that its changes on energy policy could negatively affect billions of dollars in renewable power generation projects.

In their missive, the energy companies proposed discussing what diplomatic channels could be opened to ensure that the Mexican government upheld commitments to Canadian investors.

Over the past two decades, Canada has been the third-biggest source of foreign investment in Mexico, after the United States and Spain, according to Mexican government data.

Last year, total Canadian investment was worth more than $2.9 billion, or some 8.7% of the total, the figures show.



Australia’s Effective Unemployment Rate 13.3%, Frydenberg Says By Bloomberg



© Reuters. Australia’s Effective Unemployment Rate 13.3%, Frydenberg Says

(Bloomberg) — Australia’s effective unemployment rate that also includes people who have opted against searching for work as the economy contracts is almost double the official jobless level, Treasurer Josh Frydenberg said.

“That is around 13.3% right now,” Frydenberg said of the effective rate, in contrast to the official unemployment rate of 7.1%, in Melbourne Thursday. “That is a large number of people reflecting the economic challenges that we see right now.”

Australia’s economy tumbled into recession in the first half of the year — ending an almost three-decade expansion — and Treasury, the department that provides economic analysis and develops policy for Frydenberg, reckons official unemployment will climb to 8% this quarter.

“We have seen a big reduction in hours worked in the months since the Covid pandemic first hit in Australia. Globally, they are seeing the same,” the treasurer said. “That just reflects the enormous economic challenge that we face and the impact it’s having on the unemployment rate.”

The official unemployment rate has been held down by people giving up looking for employment — captured with sharp fall in the participation rate — and by the government’s JobKeeper program that pays a wage subsidy to keep workers tied to employers.

The jobless rate probably edged up to 7.2% in June as those previously discouraged from job searching return, offsetting the 100,000 positions added in the month, economists predicted ahead of Thursday’s employment data. The expected surge in hiring reflects the removal of restrictions and reopening of the economy during the month.

The southern state of Victoria, the second largest contributor to gross domestic product, has since had to reimpose lockdown orders as a second wave of Covid-19 sweeps the state capital, Melbourne.

Frydenberg is due to deliver a fiscal and economic statement on July 23 that will outline the government’s plans for ongoing stimulus as programs like JobKeeper and JobSeeker, a temporarily higher welfare payment for the unemployed, are due to expire in September.

There will be a “second phase of income support. It will be governed by the same principles that have defined our economic measures to date, namely that our support will be targeted, it will be temporary, it will be designed based on existing systems and it will also be demand driven,” Frydenberg said.

“So it is fair to say in Victoria, with the lockdown, which is going to be harsh on businesses and households, that our announcements on the 23rd will take into account the Victorian circumstances,” he said.

©2020 Bloomberg L.P.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



China’s export slump to ease in June as economies reopen, imports fall less: Reuters poll By Reuters



© Reuters. Cranes and containers are seen at the Yantian port in Shenzhen, following the novel coronavirus disease (COVID-19) outbreak

BEIJING (Reuters) – The slump in China’s exports likely eased in June as some countries reopened their economies, while imports contracted less sharply on higher and commodities purchases, a Reuters poll showed on Monday.

June exports from the world’s second-largest economy are expected to have contracted 1.5% from a year earlier, according to a median estimate from the survey of 32 economists, easing from a decline of 3.3% in May.

Imports likely fell 10.0% on year, the poll showed, compared with a steep drop of 16.7% the previous month, due to higher purchases of crude oil and orders for infrastructure materials.

Official and private factory surveys for June have shown the manufacturing sector recovery gathering more momentum.

Factories have ramped up production on an expansion in new orders, fuelling expectations of an economic rebound faster than analysts previously forecasted. Factory-gate prices, for example, turned positive on a monthly basis last month.

Since mid-May, European countries and the United States have gradually eased their lockdowns, leading to increased shipments of some cargo backlogs previously stuck at Chinese ports and driving a relatively fast rebound in port throughput, said China Ports & Harbours Association in June.

In the last 10 days of June, container throughput at major Chinese ports rose 4.3% from the same period a year earlier, latest data from the association showed.

Moreover, the recurrent waves of coronavirus cases in major economies overseas, especially in the United States since mid-June, may have continued to support China’s exports of personal protective equipment (PPE) in June, analysts at Nomura said in a note.

China’s export performance has not been as severely affected by the global slowdown as some analysts had feared, but weak overseas orders are set to weigh on its manufacturers in the coming quarters.

Chinese officials have repeatedly vowed to stabilize foreign trade, a sector that provides about 200 million urban jobs, and help as many firms to survive the downturn. One of the ways they have advocated is for manufacturers to sell to domestic markets but a lack of sales channels and price-cutting have hindered their efforts. The domestic recovery is also being restrained worries about a second wave of infections.

The coronavirus pandemic is causing wider and deeper damage to economic activity than first thought, the International Monetary Fund said in June, prompting the institution to slash its 2020 global output forecasts to -4.9% from a contraction of 3.0% predicted in April.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Irish central bank governor sceptical about VAT cut By Reuters




DUBLIN (Reuters) – Ireland’s central bank governor is sceptical about a cut to VAT under consideration by government to help boost the economy, saying on Sunday that it should not be the main measure of a stimulus plan due later this month.

“I’m always a bit sceptical about the value of a reduction in VAT, it may have it’s place but it can’t be the main measure,” Gabriel Makhlouf told Irish national broadcaster RTE in an interview.

“I tend to be sceptical about using tax as a measure to provide support from government. I think it’s much better to provide direct support because it allows you to target that support but more effectively and efficiently.”

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



China bank lending hits record $1.72 trillion in first half after solid June By Reuters



© Reuters. FILE PHOTO: Man wearing a mask walks past the headquarters of the People’s Bank of China, the central bank, in Beijing

By Judy Hua and Kevin Yao

BEIJING (Reuters) – New bank lending in China rose 22.3% in June as authorities continued to boost credit and ease policy to get the world’s second-largest economy humming again after a sharp coronavirus-induced contraction.

Chinese banks extended 1.81 trillion yuan (204 billion pounds)in new yuan loans in June, up from 1.48 trillion yuan in May and slightly exceeding analysts’ expectations, according to data released by the People’s Bank of China (PBOC) on Friday.

That pushed bank lending in the first half of this year to a record 12.09 trillion yuan ($1.72 trillion), beating a previous peak of 9.67 trillion yuan in the first half of 2019 and roughly equivalent to the gross domestic product (GDP) of Canada.

PBOC Governor Yi Gang said last month new loans could reach nearly 20 trillion yuan for the full year.

Analysts polled by Reuters had predicted 1.80 trillion yuan of new yuan loans in June.

The monthly tally was 9% higher than a year earlier. While lending in China typically picks up in June, analysts say policymakers want to maintain strong credit growth until the economy gets back on solid footing following a record 6.8% contraction in the first quarter.

Low interest rates, increased lending and a ramp-up in government bond issuance “should help keep the economic recovery on track and allow output to return to its pre-virus trend by the end of the year,” Julian Evans-Pritchard, senior China economist at Capital Economics, said in a note after the data.

“We anticipate a further acceleration (in credit growth) in the coming months.”

An increase in government bond issuance could help boost total social financing (TSF), a broader measure of credit and liquidity.

By the end of June, growth of outstanding TSF quickened to 12.8% year-on-year from May’s 12.5%. TSF includes off-balance sheet forms of financing that exist outside the conventional bank lending system, such as initial public offerings, loans from trust companies and bond sales.

In June, TSF rose to 3.43 trillion yuan from 3.19 trillion yuan in May. Analysts had expected 3.00 trillion yuan.

Yi also said China would keep financial system liquidity ample in the second half but would need to consider withdrawing support at some point, raising questions among investors over when it may start dialing down stimulus.

The PBOC has rolled out a raft of easing steps since early February, including cuts in lending rates and banks’ reserve requirements and extending targeted lending support for virus-hit firms. But it has not slashed interest rates to near zero or embarked on huge bond buying sprees as many other central banks have.

CREDIT-BACKED RECOVERY

China’s policy steps to support the economy have yielded results and it will step up financial support for firms and employment in the second half, Ruan Jianhong, head of the central bank’s statistics department, told a briefing.

China should allow phased rises in its macro leverage ratio to expand credit support for the economy, Ruan said, adding the debt level rose 14.5 percentage points in the first quarter and climbed further in the second quarter.

Guo Kai, vice head of the PBOC’s monetary policy department, told the same briefing that credit growth should not outpace economic recovery and arbitrage and resource mismatch may occur if interest rates are too low.

On Friday, Morgan Stanley (NYSE:) became the latest investment bank to upgrade its growth forecast for China, saying it now expected the economy to expand 2.2% in the second quarter from a year earlier, up from earlier expectations of 1.5%.

Household loans, mostly mortgages, rose to 978.8 billion yuan in June from 704.3 billion in May, while corporate loans rose to 927.8 billion yuan from 845.9 billion, according to Reuters calculations based on the central bank data.

Broad M2 money supply in June grew 11.1% from a year earlier, the data showed, in line with analysts’ forecasts in a Reuters poll and the same pace as in May.

Outstanding yuan loans grew 13.2% from a year earlier, also steady from May, as expected.

 



German states to borrow 95 billion euros to cushion virus fallout By Reuters



© Reuters. FILE PHOTO: A restaurant is pictured during the spread of the coronavirus disease (COVID-19) in downtown Wildeshausen

BERLIN (Reuters) – Germany’s 16 states are planning to take on 95 billion euros ($107 billion) in new debt as part of their spending efforts to cushion the economy from the worst of the coronavirus shock, Der Spiegel magazine reported on Saturday.

The borrowing comes on top of the 218.5 billion euros of debt the Federal Government plans to issue to help finance support to an economy that is expected to shrink more than 6% this year because of the crisis and lockdowns.

Der Spiegel calculated, after surveying regional finance ministries, that Germany’s states, which enjoy wide autonomy under the country’s highly devolved system of governance, were taking on an additional 95 billion euros in debt.

The states already have total debts of about 580 billion euros, the magazine said.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.