Overseas Headlines – May 22, 2017



Germany’s healthy growth remains on track: Bundesbank

German’s relatively robust growth will continue throughout the spring, supported by strong demand for industrial goods, high construction activity and buoyant private consumption, the Bundesbank said on Monday. Europe’s largest economy grew by 0.6 percent in the first quarter, faster than the United States and most European peers. “The strong growth of the German economy will probably continue in the spring of 2017,” the German central bank said in its monthly report. Demand for industrial products should come from abroad, the Bundesbank said, supported by an economic upturn in most parts of the world, with firms likely investing more in equipment and machinery. “The construction sector is likely to continue to flourish, and the service sectors are likely to continue their expansion,” the central bank added. Altogether, this should have a positive effect on household income and the labour market, leading to a strong rise in private consumption, which could remain an important cornerstone of the upturn.






China’s second quarter GDP growth seen at around 6.8 percent: official think tank

China’s economy will likely expand around 6.8 percent in the second quarter of 2017, the State Information Centre said in an article published in the state-owned China Securities Journal on Saturday. The State Information Centre is an official think tank affiliated with the National Development and Reform Commission, the country’s top economic planning agency. It forecast consumer inflation in the world’s second largest economy of around 1.4 percent and expected an increase of about 6.5 percent in producer price inflation in the second quarter from the same period a year earlier. “Overall, China’s economy will remain stable but with a slightly slowing trend,” the think tank said in the paper. China’s economy grew 6.9 percent in the first quarter from a year earlier, slightly faster than expected, supported by a government infrastructure spending spree and a housing market that has shown signs of overheating. The think tank said it had seen contradictions between government policies to fend off financial risks and reduce corporate finance costs.






US STOCKS-Wall St set to open higher as oil prices, defense stocks rise

Wall Street looked set to open slightly higher on Monday, helped by higher oil prices and as defense stocks rose after a $110 billion arms deal between the United States and Saudi Arabia. Oil prices were up about 1 percent, bolstered by confidence that top exporters will this week agree to extend supply curbs, with suggestions that the cuts could even be deepened. Both benchmarks, Brent crude and U.S. light crude, have climbed more than 10 percent from lows hit earlier this month. President Donald Trump visited Saudi Arabia over the weekend, on his first foreign trip since taking office and one that the White House hopes will shift the focus away from domestic controversies such as his firing of a former FBI head last week and reports of his administration’s links to Russia. The central achievement of Trump’s visit was nearly $110 billion in deals sealed on Saturday in which Riyadh will buy U.S. arms to help it counter Iran, with options running as high as $350 billion over 10 years. Shares of defense firms such as General Dynamics, Raytheon, Boeing and Lockheed Martin were up between 1.1 percent and 3 percent in premarket trading and were among the top S&P 500 movers before the bell.