Overseas Headlines – September 18, 2020

United States:

Economic Expectations of U.S. Consumers Climb to Six-Month High

“U.S. consumers’ economic expectations reached a six-month high in September, with the increased optimism largely concentrated among Republican voters and highlighting a partisan divide about the recovery’s prospects. The Bloomberg Consumer Comfort monthly gauge advanced 3.5 percentage points to 41.5, according to the Sept. 1-14 survey released Thursday. Even with the gain, the expectations index is still 16 percentage points below the pre-pandemic level as millions of Americans continue to collect unemployment benefits. At 29%, the share of respondents this month who said the economy was getting better rose 6 percentage points to the highest level since February. Still, 46% said conditions are getting worse.”



No-Deal Brexit May Be the Trigger for BOE to Use Negative Rates

“The Bank of England’s preparations for the aftermath of a potentially messy Brexit could include a new weapon by the end of the year. Policy makers on Thursday gave the strongest signal yet that they’re considering using negative interest rates, saying they’ll work with bank regulators in the fourth quarter on how they might implement such a policy for the first time in the central bank’s history.”



Japan Inflation Goes Negative on Government Travel Discounts

“Japan’s key inflation gauge went negative again last month, driven down by government discounts meant to boost consumer spending and help the pandemic-hit travel industry. Consumer prices excluding fresh food fell 0.4% in August from a year earlier, falling back into negative territory again after two flat months, the ministry of internal affairs reported Friday in a result matching the median private sector forecast. A 32% drop in the cost of hotel accommodations accounted for most of the overall drop.”



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