Overseas Headlines-January 3, 2020

Date: January 3, 2020

United States:

Nine States Face Economic Contraction, Most Since 2009 Crisis

“Nine U.S. states’ economies are expected to slide into contraction within six months — the most since the financial crisis ended more than a decade ago, according to the latest projections from the Federal Reserve Bank of Philadelphia. West Virginia’s economy is forecast to shrink the most, while a decline in neighboring Pennsylvania is anticipated to be the most severe since May 2009 during the tail-end of the Great Recession, figures released this week show. A faltering economic outlook in coming months would likely cast a shadow over President Donald Trump’s re-election bid. Delaware, Montana and Oklahoma are still expected to face shrinking economies in the next six months, as predicted in the analysis for the prior month. But the list of states was expanded to include contractions on the horizon for Vermont, New Jersey, Kentucky and Connecticut. The bank no longer expects Alaska to post negative growth.”



U.K. Construction in Longest Slump Since Financial Crisis

“U.K. construction contracted for an eighth month in December, the longest period since the financial crisis, as political uncertainty and the general election subdued client demand. IHS Markit’s index of activity fell to 44.4, falling short of the 45.9 level predicted by economists in a Bloomberg survey and remaining below the 50 level that indicates expansion. Civil engineering shrank at its fastest pace since March 2009, while commercial work and homebuilding also dropped. Even so, companies’ year-ahead business outlook rebounded as firms suggested that greater clarity on Brexit could boost orders in 2020.”



Hong Kong Dollar Surges to Strongest Since 2017 as Shorts Unwind

“The Hong Kong dollar advanced to its strongest level since April 2017, as traders unwound short positions on expectations that borrowing costs will rise amid seasonal demand for cash and potential new stock listings. The currency, which is pegged to the greenback, rallied as much as 0.16% to 7.7770 per U.S. dollar on Friday. It has been driven by bets that funding costs will increase, given seasonal cash demand ahead of the Lunar New Year holiday later this month. Continued mainland capital inflows into Hong Kong stocks and the local exchange’s discussion of potential secondary listings by Chinese technology firms have also offered support.”


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