Overseas Headlines- August 29, 2019

Date: August 29, 2019

United States:

U.S. Second-Quarter Growth Revised Down to 2% Pace From 2.1%

“U.S. economic growth decelerated in the second quarter by more than initially reported, with stronger consumer spending offset by weaker readings across other categories that suggest President Donald Trump’s trade actions are weighing more heavily on the pace of expansion. Inflation-adjusted gross domestic product grew at a 2% annualized rate, according to Commerce Department data Thursday that matched analyst estimates and compared with an initially reported 2.1%. Consumer spending, which makes up about two-thirds of the economy, grew 4.7%, topping all forecasts with the biggest gain since 2014. The downward revision to GDP reflected lower estimates for exports, inventories, residential investment and state and local government spending. The report signals Trump’s 3% annual growth goal may be even more out of reach as the world’s largest economy faces complications from his tariffs on Chinese goods, which may further weigh on the outlook with levies set to increase Sept. 1. Investors have sent bond yields plummeting while economists project weaker growth in the second half and have boosted odds that the record-long expansion will end in the next 12 months.”

https://www.bloomberg.com/news/articles/2019-08-29/u-s-second-quarter-growth-revised-down-to-2-pace-from-2-1?srnd=premium

 

Europe:

There’s a Silver Lining to Johnson Brexit Move for Pound Pundits

“U.K. Prime Minister Boris Johnson’s move to suspend Parliament increased the risk of a no-deal Brexit and sent the pound plunging, but strategists see a silver lining for sterling. The closure of the debating chamber on Sept. 12 could focus the minds of both U.K. lawmakers and the European Union on stopping a crash exit on Oct. 31., according to Credit Agricole SA and Deutsche Bank SA. That could provide support in the near term to sterling for MUFG and ING Groep NV. “The latest developments may also increase pressure on officials to find alternative solutions to the Irish backstop issue,” said Manuel Oliveri, a strategist at Credit Agricole. “Speculative investors have been retaining excessive shorts and such conditions may still mean that better levels could be reached in coming weeks.” Sterling held its ground above $1.22 Thursday, after falling 0.5% this week. Morgan Stanley sees a strategic buying opportunity if sterling slides further to $1.15, an almost 6% drop.”

https://www.bloomberg.com/news/articles/2019-08-29/there-s-a-silver-lining-to-johnson-brexit-move-for-pound-pundits?srnd=premium-europe

Asia:

China Indicates It Won’t Retaliate Now on New U.S. Tariffs

“China indicated that it wouldn’t immediately retaliate against the latest U.S. tariff increase announced by President Donald Trump last week, emphasizing the need to discuss ways to deescalate the trade war between the world’s two largest economies. “China has ample means for retaliation, but thinks the question that should be discussed now is about removing the new tariffs to prevent escalation of the trade war,” Ministry of Commerce spokesman Gao Feng told reporters in Beijing on Thursday. “China is lodging solemn representations with the U.S. on the matter.” When asked if that meant China wouldn’t retaliate at all for the latest escalation by the U.S., Gao didn’t elaborate but repeated the same comments. China has hit back against each previous tariff increase by the U.S., so not responding in kind this time may signal a change in strategy. Stocks across Asia pared losses and European stocks turned higher with U.S. equity futures as investors interpreted the comments as an olive branch from Beijing aimed at getting talks back on track. Gao said that both sides are discussing the previously announced trip in September by Chinese negotiators to Washington. Gao’s remarks came amid signs China’s economy slowed further in August as weak domestic conditions. The downshifting is evident in a Bloomberg Economics gauge aggregating the earliest available indicators from financial markets and businesses. ”

https://www.bloomberg.com/news/articles/2019-08-29/china-indicates-it-won-t-retaliate-against-newest-u-s-tariffs?srnd=premium

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2019-08-29T20:23:41+00:00