Signs of Wage Growth Start to Appear in Euro Zone’s North
If Mario Draghi, the president of the European Central Bank, is looking for signs of wage growth, he might find comfort in Finland. After delivering the euro zone’s fastest pace of economic growth in the first quarter, Finnish workers have had enough belt-tightening and are now demanding pay rises they say are only fair given the rebound in exports. Finns have put in longer hours and given up bank holidays in response to government demands. Their efforts helped drag the Nordic region’s only euro member out of a three-year recession. Now, a sense of entitlement is spreading, setting the stage for what are likely to be the toughest wage negotiations the country has seen in years. Finnish industry is improving and exports are growing again, said Petri Vanhala, chairman of the Finnish Paper Workers’ Union, which represents 36,400 workers. That means there should be “something falling into the pocket of the worker,” he said in an interview in Helsinki.
Robust China economic growth shows signs of fading in July
China’s strong economic growth showed visible signs of fading in July as lending costs rose and the gravity-defying property market cooled, though activity levels generally remained solid, propped up by a year-long construction spree. Industrial output, investment, retail sales and trade all grew less than expected last month, after the world’s second-largest economy put in a surprisingly strong showing in the first half, adding fuel to a global recovery. But economists do not expect any hard landing, with the government keen to ensure stability ahead of a once-in-five-years Communist Party leadership reshuffle in the autumn. “The upshot is that both foreign and domestic demand appear to have softened at the start of the third quarter,” said Julian Evans-Pritchard, China economist at Capital Economics. “A few sectors, such as steel, seem to have defied this slowdown in economic activity. But the strength in these areas likely won’t last given that policy tightening is set to further weigh on infrastructure and property investment in coming months.”
China’s Economic Growth Dials Back
China’s economy showed further signs of entering a second-half slowdown, as curbs on property, excess borrowing and industrial overcapacity began to bite.
- Industrial output rose 6.4 percent from a year earlier in July, versus a median projection of 7.1 percent and June’s 7.6 percent
- Retail sales expanded 10.4 percent from a year earlier, compared with a projection of 10.8 percent and 11 percent in June
- Fixed-asset investment in urban areas rose 8.3 percent from a year earlier in the first seven months, versus a forecast 8.6 percent rise
TREASURIES-U.S. yields rise as U.S.-North Korea tensions ease
U.S. Treasury yields rose on Monday with benchmark yields bouncing from six-week lows as reduced tensions between the United States and North Korea led investors to pare back on their holdings of low-risk government debt. Last week, fears of a military showdown between the two nations over Pyongyang’s goal to target mainland U.S. with its nuclear weapons caused a rush into Treasuries, yen, Swiss franc and gold. Since the weekend, South Korean President Moon Jae-in urged for a peaceful solution to the situation, while U.S. National Security Adviser H.R. McMaster downplayed a military conflict. In the wake of these comments, some investors stepped back into the stock market and other risky assets. U.S. stock index futures pointed to Wall Street opening higher. At 8:59 a.m. (1256 GMT), the yield on benchmark 10-year Treasury notes was 2.222 percent, up over 3 basis points from late on Friday. On Friday, it hit a six-week trough at 2.182 percent.