New Zealand PM Ardern sees 2020 growth slowing to 2-2.5% due to coronavirus By Reuters



WELLINGTON (Reuters) – New Zealand Prime Minister Jacinda Ardern said on Monday that the country’s gross domestic product (GDP) is expected to slow to around 2% to 2.5% this year, due to the economic impact of the coronavirus epidemic.

Ardern said the forecasts were from the treasury which had previously predicted a GDP growth of 2.2% to 2.8%. She said the impact will be seen in the first two quarters of the year.

“Treasury expect things to return to normal in the second half of 2020,” she told a news conference.

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South Korea’s finance ministry sees economy recovering but coronavirus a risk By Reuters



SEOUL (Reuters) – South Korea’s finance ministry on Friday said the economy was recovering thanks to improvements in consumer confidence and some economic indicators, although it said the coronavirus may delay a further recovery.

“Fixed prices of DRAM chips and expectations of a global economic recovery were seen rising, but there is a possibility of global economic growth, including China, and the recovery trend in (South Korean) economy being constrained depending on the development of coronavirus outbreak,” the ministry said in its monthly assessment of the economy.

Recent economic indicators have shown signs of recovery in Asia’s fourth-largest economy.

The Bank of Korea’s composite consumer sentiment index in January rose to 104.2 from 100.5 a month earlier, marking the highest reading since June 2019.

The country’s annual inflation also accelerated in January to its fastest in 14 months, Statistics Korea data showed.

The ministry also said bullish sales in discount and online stores, and an increase in Chinese tourists would support January retail sales, although sluggish department store and auto sales weighed on overall data. The ministry did not say if it expected the coronavirus to affect Chinese tourism numbers after this period.

South Korea’s retail sales in December last year rose 4.6% from a year earlier, boosted by durable goods such as cars. The nation’s December factory output also surged on soaring chip production, marking the fastest jump in more than three years.

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Treasury’s Mnuchin sees U.S. GDP growth less than 3% in 2020 By Reuters



WASHINGTON (Reuters) – Treasury Secretary Steven Mnuchin said on Friday he expects 2020 U.S. GDP growth to be less than 3%, partly due to problems at Boeing Co (N:), which halted production of its 737 MAX planes over safety issues.

“I think our projections have been reduced because of Boeing and in other impacts, so it will be lower. I think we would have hit 3% but again, Boeing has had a big impact on our exports being the largest exporter,” Mnuchin said in an interview on Fox Business Network.

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Treasury’s Mnuchin sees U.S. GDP growth less than 3% in 2020


FILE PHOTO: U.S. Treasury Secretary Steven Mnuchin takes part in a Q&A session at Chatham House in London, Britain, January 25, 2020. REUTERS/Henry Nicholls

WASHINGTON (Reuters) – Treasury Secretary Steven Mnuchin said on Friday he expects 2020 U.S. GDP growth to be less than 3%, partly due to problems at Boeing Co (BA.N), which halted production of its 737 MAX planes over safety issues.

“I think our projections have been reduced because of Boeing and in other impacts, so it will be lower. I think we would have hit 3% but again, Boeing has had a big impact on our exports being the largest exporter,” Mnuchin said in an interview on Fox Business Network.

Reporting by Eric Beech and Mohammad Zargham; editing by Grant McCool



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China Jan FX reserves unexpectedly rise, regulator sees only temporary virus impact By Reuters



BEIJING (Reuters) – China’s foreign exchange reserves unexpectedly rose in January as the yuan firmed after Beijing and Washington signed an initial trade deal, defusing an 18-month row that weighed on global growth.

The country’s foreign exchange reserves — the world’s largest — rose $7.57 billion in January to $3.115 trillion, central bank data showed on Friday.

Economists polled by Reuters had expected reserves would fall by $7.92 billion to $3.100 trillion.

The increase in January was due to changes in currency exchange rates and the prices of global assets that China holds, the foreign exchange regulator said in a statement.

The State Administration of Foreign Exchange (SAFE) also said the impact of a coronavirus outbreak on China’s economy would be temporary.

Capital Economics estimated capital outflows last month picked up to $30 billion from $15 billion in December, with the increase likely coming in the last third of the month as public awareness of the outbreak jumped.

That amount would still be considered modest, but outflow pressures may have escalated this week as Chinese financial markets reopened after an extended holiday and reacted to the rapidly spreading epidemic.

Some $700 billion in capitalization was wiped off mainland stock markets on Monday alone, though they clawed back a bit of ground later in the week.

Strict capital controls have helped China keep outflows under control over the past year despite the trade war with the United States and weakening economic growth at home. Rising foreign investment in Chinese stocks and bonds have also seen growth in inflows.

China’s forex reserves climbed $35.2 billion in 2019, after a drop of $67.2 billion in 2018.

China burned through $1 trillion of reserves supporting the

yuan during the previous economic downturn which was marked by

rapid capital flight and a surprising yuan devaluation in 2015.

The yuan rose 0.38% against the dollar in January, but it fell 1% between Jan. 20 and Jan. 23 amid mounting worries about the impact from the outbreak that started in the central Chinese city of Wuhan.

The dollar rose about 1% in January against a basket of other major currencies ().

China held 62.64 million fine troy ounces of gold at the end of January, unchanged from 62.64 million ounces at the end of 2019.

The value of China’s gold reserves rose to $99.24 billion at the end of January, from $95.406 billion at the end of 2019.

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Barclays sees $2/bbl impact to oil prices as virus fears threaten demand By Reuters



(Reuters) – Barclays (LON:) said on Tuesday oil prices will be impacted by $2 per barrel on the potential economic fallout from the coronavirus outbreak in China.

More than 100 people have died and over 4,000 cases of the new virus have been confirmed in China, leading authorities to increase preventive measures, impose travel restrictions and also extend the Lunar New Year holidays to limit the spread of the virus.

The bank sees a $2 per barrel downside to their full-year Brent and WTI forecasts of $62 per barrel and $57 per barrel, respectively.

Compounding the effects of the spillover to economic growth from China and the region, Barclays expects transitory oil demand erosion of about 0.6-0.8 million barrels per day (mb/d) in the first quarter of this year, or 0.2 mb/d for the full year.

“If air passenger traffic in China declined by half in first quarter of 2020, it would likely lead to a 300,000 barrels per day year on year decline in jet-kerosene demand from China,” the bank said adding the fall in road transport would likely be less severe than in the past given reduced reliance on buses.

Barclays expects the Organisation of the Petroleum Exporting Countries and other allies to step in and take further measures to keep the markets tight, in case the fall in demand is more acute.

Oil prices have been down for the last six sessions, but the bank said that the market reaction was likely overdone.

Barclays said the actual economic fallout from the coronavirus could be less severe than the 2003 SARS outbreak, given that the new virus seems less lethal than SARS so far and the measures taken by Chinese authorities.

The bank said the geopolitical risks to global supplies remain high as U.S.-Iran tensions could continue to gradually escalate and oil production in Libya could fall further if the blockade of key infrastructure facilities continues.

Brent crude prices () are currently trading around $59 per barrel and U.S. WTI at around at $53 per barrel.

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Copper Sees Worst Losing Streak Since 2018 on Virus Fears By Bloomberg



(Bloomberg) — Copper saw its worst streak of losses since mid-2018 as more patients were infected by the deadly coronavirus in the U.S., spurring a sell-off in riskier assets while boosting gold’s haven appeal.

U.S. officials are monitoring more than 60 people as they attempt to catch new cases of coronavirus in travelers from China, the center of the outbreak. Mounting concerns that the spreading deadly disease could further crimp global growth sent equities and commodities declining.

China, the world’s largest consumer of commodities including industrial metals, locked down Wuhan and its surrounding areas to contain the coronavirus, the first large-scale quarantine in modern times.

“If you all of a sudden take China off the board because you’re looking at shutting down mills and shutting down transportation to the mills, it’s going to hurt,” said Peter Thomas, a senior vice president at Chicago-based broker Zaner Group, said by phone.

Copper, often a barometer of global growth, fell 1.5% to settle at $2.684 a pound at 1:02 p.m. on the Comex in New York. March futures are down 6.6% since mid-January, the biggest seven-session loss for a most-active contract since July 11, 2018.

“We suspect that even more demand destruction fear is justified because the virus will also undermine Chinese sentiment and dampen the biggest shopping period of the Chinese calendar,” Phil Streible, chief market strategist at Blue Line Futures, said on an emailed note.

The Bloomberg Industrial Metals Subindex Total Return, which tracks , aluminum, zinc and nickel, slipped 1.3%, poised for the steepest four-day decline since September 2018. The wider commodities gauge is set for the biggest weekly loss since December 2018.

The outbreak has also boosted bullion’s appeal as haven. Over the past five days, investors poured more than $1 billion into SPDR Gold Shares (NYSE:), the largest exchange-traded fund backed by the metal.

On the Comex in New York, for April delivery rose, posting five straight weekly gains.

Story Link: BASE METALS: Copper Set for Worst Week Since 2018 on Virus Fears

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ILO sees end to falling global unemployment rate By Reuters



GENEVA (Reuters) – The global unemployment rate has stabilized after declining for nine years since the crisis, the International Labour Organization (ILO) said on Monday, and it could edge up next year as the world economy slows.

The rate stood unchanged at 5.4% in 2019, or 188 million people, and is expected to remain there in 2020 and rise to 5.5% in 2021, the ILO said in its annual report.

“This means that the gradual decline of the unemployment rate observed between 2009 and 2018 appears to have come to a halt,” it said, citing a world economic slowdown, especially in manufacturing.

Even for those with jobs, it is becoming harder for many to live better lives, or exit poverty, a trend Director-General Guy Ryder described as “extremely worrying” with “very profound and worrying implications for social cohesion”.

“Persisting and substantial work-related inequalities and exclusion have prevented them (millions of people) from finding decent work and better futures,” Ryder told journalists.

The ILO said that about 470 million people in total have insufficient paid work, a new data set which includes not only the unemployed but also the under-employed and those lacking access to the labor market.

The report noted the difficulties faced by young people in getting jobs, with 22% of those aged 15-24 not in employment, education or training.

It also noted the rate of female participation in the workforce remained at just 47%, 27 percentage points below the male rate. “We are not going where we want to go,” said Ryder, referring to a commitment by G20 leaders in 2014 to reduce the gender gap in the workforce.

The global working poverty is declining, the report said, but that masked limited progress in low-income countries, especially in sub-Saharan Africa, the report said.

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Argo Blockchain Sees Mining Revenue Rise Tenfold in 2019 By Cointelegraph



Publicly-listed mining company Argo Blockchain had a tenfold increase in revenue for 2019 over the previous year, ProactiveInvestors reports on Jan. 20. Its shares bounced as the company plans further expansion in the upcoming year.

Argo Blockchain PLC is a company operating mining rigs for profit, as well as providing Mining-as-a-Service (MaaS) to institutional investors who are “looking to hold specific coins but do not want to procure via exchanges.”

Continue Reading on Coin Telegraph

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UK business optimism sees record post-election rebound: Deloitte By Reuters



By David Milliken

LONDON (Reuters) – Optimism at major British companies has improved by the largest margin in at least 11 years after Prime Minister Boris Johnson won a sweeping election victory last month, according to a survey from accountants Deloitte.

Some 53% of chief financial officers at large businesses said their optimism about the financial outlook had improved compared with three months ago, versus 9% in the last survey conducted in October.

This was the highest proportion since the quarterly survey began 11 years ago, Deloitte said.

The figures are the strongest sign yet that a rebound in business sentiment may be underway, after more tentative evidence from a survey of purchasing managers on Monday.

Britain’s economy slowed to a crawl late last year, with the most recent official growth data showing the joint-weakest annual expansion since 2012.

“The fog of uncertainty that has lingered over the UK since the 2016 EU referendum is lifting. CFOs … are beginning 2020 with sentiment levels that would have been unimaginable at any time in the last three years,” Deloitte chief economist Ian Stewart said.

During the election campaign, Johnson said weak business investment in 2019 was due to parliament’s prevarication over approving a Brexit deal, and predicted a rebound if he gained a strong majority in parliament.

Many businesses were also concerned by the opposition Labour Party’s plans to nationalize rail operators, utilities and broadband infrastructure.

Just over half of chief financial officers said they expected revenues to rise over the next year, up from 18% three months ago, and 38% said they planned to invest more, the highest proportion in four years.

Deloitte conducted the survey between Dec. 16 and Jan. 6, and spoke to 119 chief financial officers of British listed companies, large private firms and British subsidiaries of big foreign companies. The 94 listed companies accounted for just over a quarter of the British stock market, by value.

Brexit has dropped to third in CFOs’ list of worries from the top spot three months ago, despite uncertainty over whether Johnson will be able to negotiate a post-Brexit trade deal in the narrow 11-month window he has set himself.

Some two thirds of CFOs said they expected Brexit to damage the business conditions, down from more than four fifths earlier in 2019.

Weak domestic demand was the biggest risk, according to CFOs, though it was less of a worry than three months earlier.

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