GLOBAL NEWS:-
China’s economy is expected to cool further this year as domestic demand weakens and exports are hit by U.S. tariffs, a Reuters poll showed on Thursday, reinforcing views Beijing will need to roll out more stimulus measures.China’s economic growth is expected to slow to 6.3 percent this year, which would be the weakest in 29 years, from an expected 6.6 percent in 2018, according to median forecast of 85 economists Reuters polled. The economy expanded 6.9 percent in 2017.
The world’s second-largest economy got off to a strong start in 2018, but pressure soon built as a crackdown on riskier lending pushed up borrowing costs and made it harder for smaller companies to get funding, spurring record bond defaults.At the same time, the escalating dispute with the United States saw both sides slap tariffs on each other’s goods, disrupting China’s trade sector and weighing on Chinese business and consumer confidence. Slowing demand global is heightening those export pressures.
Chinese Vice Premier Liu He will visit the United States on Jan. 30 and 31 for the next round of trade negotiations with Washington, China’s commerce ministry said on Thursday, confirming earlier reports of the planned talks.Liu’s scheduled visit follows lower-level negotiations held in Beijing last week aimed at resolving a bitter trade dispute between the world’s two largest economies ahead of a scheduled March 2 escalation of U.S. tariffs on $200 billion worth of Chinese goods.
Bank of Japan Governor Haruhiko Kuroda said on Thursday central banks must carefully evaluate the effects of unconventional monetary policy steps, as their benefits and side-effects could differ from those brought about by conventional policy.Kuroda also said demographic changes in major economies could affect how financial institutions behave, thereby affecting central banks’ policy decisions.
“As a low interest rate environment persists and credit demands become stagnant amid a declining population, banks might accelerate their search-for-yield activities such as expanding their exposure to overseas assets and increasing loans and investments to firms with higher credit risks,” he said.“If that were the case, the entire financial system could become less stable,” Kuroda said in a seminar that Japan hosted as chair of this year’s G20 meetings.
?The rupee on Thursday opened stronger but soon erased all gains and was trading little changed against the US dollar amid speculation that the ruling party may favour an expansionary fiscal policy.The 10-year government bond yield was at 7.26%, below Wednesday’s close of 7.273%. Bond yields and prices move in opposite directions.Prime Minister Narendra Modi’s Bharatiya Janata Party favours an expansionary fiscal policy and does not view the government’s 3.3% deficit target for the year ending in March as “sacrosanct”.
The benchmark Sensex index rose 0.25% to 36,413.60 points. Year to date, it has risen 0.7%.So far this year, the rupee has declined 1.2%, while foreign investors have sold $398.50 million and $172.40 million in the equity and debt markets, respectively.Asian currencies were trading lower amid concern the investigation into Huawei for allegedly stealing trade secrets may undermine a recent improvement in US-China ties.
The dollar took a breather on Thursday following its recent strong gains against key rivals, while sterling steadied after British Prime Minister Theresa May’s government won a no-confidence vote in parliament. The dollar index .DXY, which measures the greenback against six major peers, was a shade higher at 96.133 after gaining about 1 percent over the previous five sessions.On Jan. 10, the dollar almost fell below its 200-day moving average as the index touched a three-month low of 95.029. But then it bounced up, and stayed above that average.
The U.S. currency held onto its gains against the euro EUR= as persistent worries about the euro zone economy weighed on the single currency.Data this week showed Germany barely avoided slipping into recession in 2018’s second half, and European Central Bank chief Mario Draghi warned on Tuesday that economic developments in the euro zone have been weaker than expected.The dollar was trading basically flat against the euro at $1.1388 after rising five straight sessions against the single currency, during which it gained about 1.5 percent.
Asian share markets faltered on Thursday as unease over China’s economic outlook eroded early gains, though an anti-climactic end to the latest chapter in the Brexit saga did offer sterling a moment’s peace.MSCI’s broadest index of Asia-Pacific shares outside Japan edged down 0.1 percent in thin trade, while E-Mini futures for the S&P 500 slipped 0.3 percent.Japan’s Nikkei reversed course and dropped 0.3 percent.China’s blue chip index eased 0.3 percent, led by a fall in the country’s second largest home appliances maker, Gree Electric, after it warned of slower profit growth as the economy loses steam.
Business leaders in Britain and beyond warned on Wednesday of catastrophic job losses and chaos at ports if the country does not agree a European Union withdrawal, turning up the heat on politicians to deliver clarity. A Brexit agreement that would have secured tariff-free trade and safeguarded just-in-time cross-border supply chains was rejected by lawmakers on Tuesday, leaving Britain at risk of leaving the bloc on March 29 without a framework.
From Channel Tunnel operator Eurotunnel to Scottish whisky distillers, firms called for urgent and decisive government action and warned of the consequences of a no-deal Brexit.“Ford continues to view a no-deal exit as the least likely outcome given how damaging it would be, but we recognize the situation is highly uncertain after yesterday’s vote,” the U.S. carmaker’s Chief Financial Officer Bob Shanks said.
Palladium rose to a record high on Thursday on lower supply and increasing demand for the metal used in auto catalysts, while a firmer dollar offset expectations of a pause in the U.S. Federal Reserve’s rate-hiking cycle, keeping gold steady.The price of palladium, used mainly in emissions-reducing catalysts for vehicles, is up over 60 percent since marking a trough in mid-August. Prices for the metal overtook gold for the first time in 16 years early in December 2018.
Spot palladium was up 0.1 percent at $1,360, as of 0350 GMT, after earlier hitting a record high of $1,366.50.“For now palladium is gripped by a serious supply shortage and so until that lifts, we may very well see even higher prices from here,” INTL FC Stone analyst Edward Meir said.Spot gold was steady at $1,292.76 per ounce, while U.S. gold futures dipped 0.1 percent to $1,292.30 per ounce.
Oil prices dipped on Thursday as U.S. crude production quickly approached an unprecedented 12 million barrels per day (bpd) just as worries about weakening demand emerge.U.S. West Texas Intermediate (WTI) crude futures were at $52 per barrel at 0140 GMT, down 31 cents, or 0.6 percent, from their last settlement.International Brent crude oil futures were down 34 cents, or 0.6 percent, at $60.98 per barrel. American crude oil production reached a record 11.9 million bpd in the week ending Jan. 11, the Energy Information Administration (EIA) said on Wednesday, up from 11.7 million bpd last week, which was already the highest national output in the world.U.S. output has soared by 2.4 million bpd since January 2018, stoking fears of a supply glut.