2024-09-10 05:44
Export grows at fastest in 17 months, supports economy Imports fail to impress, underlines weak domestic demand Exports maybe boosted by shippers rushing to avoid tariffs Trade barriers could undercut efforts to lift growth BEIJING, Sept 10 (Reuters) - China's exports grew at their fastest pace in nearly 1-1/2 years in August, suggesting manufacturers are rushing out orders ahead of tariffs expected from a growing number of trade partners, while imports disappointed amid weak domestic demand. The mixed trade data highlights the challenge facing Beijing as policymakers try to bolster overall growth without becoming too reliant on exports, especially given the tightening of consumers' purse strings. China's economy has failed to fire over the past year amid a prolonged property sector downturn, and a survey last week showed exports in the doldrums and factory gate prices at their worst in 14 months, pointing to producers slashing prices to find buyers. Outbound shipments from the world's second-largest economy grew 8.7% year-on-year in value last month, the quickest since March 2023, customs data showed on Tuesday, beating a forecast 6.5% increase in a Reuters poll of economists and a 7% rise in July. But imports increased by just 0.5%, missing expectations for a 2% boost and down from the 7.2% growth a month prior. "The strong export performance and trade surplus are favourable to economic growth in the third quarter and whole year," said Zhou Maohua, a macroeconomic researcher at China Everbright Bank. "However, the global economic and geopolitical environment is complicated and China's exports face a lot of headwinds." Economists have warned that Beijing risks undershooting its growth target if it becomes too reliant on exports, following a series of lacklustre data, raising pressure on policymakers for more stimulus to revive China's economy. "The continued strong run of exports may actually delay near-term policy support, and we continue to expect bolder measures to be released in Q4," Nomura analysts said in a note. Outbound shipments to the European Union grew 13.4% in August year-on-year, which represented the biggest increase out of China's major export markets, followed by an 8.8% lift in sales to the Southeast Asian economies. Chinese exports to the U.S. rose by just an annual 4.9% last month but imports grew 12.2% over the same period, the most of any major import market. TRADE BARRIERS Mounting trade barriers are emerging as another significant obstacle, threatening China's price-driven export momentum. China's trade surplus with the United States widened to $33.81 billion in August from $30.84 billion in July. Washington has repeatedly highlighted the surplus as evidence of the one-sided trade favouring the Chinese economy. Brussels' trade policy has turned more protective too, and Beijing's efforts to negotiate with the EU to ease tariffs on Chinese electric vehicles (EVs) have made little headway. Last month Canada announced a 100% tariff on Chinese EVs, along with a 25% tariff on Chinese steel and aluminium. As China attempts to direct more exports towards Southeast Asia and South Asia, it is also facing pushback there. India is planning to raise tariffs on Chinese steel, Indonesia is eyeing heavy duties on textile imports, and Malaysia opened anti-dumping investigations into plastic imports from China and Indonesia. Still, some analysts expect outbound shipments to ride out the storm, given the relative inexpensiveness of China's yuan and the relative ease with which exporters can re-route their wares to avoid tariffs. "Outbound shipments are likely to remain strong in the coming months. Admittedly, more barriers are being erected," said Zichun Huang, China Economist at Capital Economics. "We doubt the tariffs announced so far will prevent real effective exchange rate declines from fuelling further gains in China's global export market share," she added. SLOW IMPORTS The lower-than-expected imports might not bode well for exports in the coming months, as just under a third of China's purchases are parts for re-export, particularly in the electronics sector. China's commodities purchases also pointed to a bleak domestic picture, with iron ore imports down 4.73% last month from a year earlier, as weak demand in the country's construction sector pinched steelmakers. Furthermore, while China bought in a record 12.14 million metric tons of soybeans in August, there were ominous signs for the production powerhouse's future export performance. Analysts say the buying spree was motivated by traders taking advantage of lower prices to stock up amid concerns that trade tensions with the U.S. could intensify if Donald Trump returns to the White House next year. On the whole, while August exports were positive for growth, "it is still uncertain if this momentum can last," said Lynn Song, ING's chief economist for China. "Aside from incoming tariffs and the sluggish export orders data of the last few months, if global growth momentum begins to slow too, this could also drag export momentum." Sign up here. https://www.reuters.com/world/china/chinas-exports-top-forecasts-imports-disappoint-amid-depressed-domestic-demand-2024-09-10/
2024-09-10 05:41
Floods hitting northern provinces Death toll rises to 65, with 39 missing Authorities ban, limit traffic on bridges over Red River Soldiers mobilised to evacuate, support flood victims in Bac Giang HANOI, Sept 10 (Reuters) - Severe floods are expected to inundate parts of Vietnam's north, including the capital Hanoi, government officials said, as the aftermath of typhoon Yagi, the most powerful storm to hit Asia so far this year, continues to extract a deadly toll. Landslides and floods triggered by the typhoon have killed at least 65 people and 39 others are missing in the north, the disaster management agency said on Tuesday in its latest update on the situation. Most of the victims were killed in landslides and flash floods, the agency said in a report, adding that 752 people have been injured. Other northern areas, including the industrial hubs of Bac Giang and Thai Nguyen which host factories of several export-oriented multinationals including Samsung Electronics and Apple supplier Foxconn are also facing severe flooding, state media reported. It was not immediately clear if the companies were affected. The typhoon made landfall on Saturday on Vietnam's northeastern coast, devastating a large swath of industrial and residential areas and bringing heavy rains that caused floods and landslides. It had previously hit the Philippines and the southern Chinese island of Hainan. Several rivers in northern Vietnam have risen to alarming levels, leaving villages and residential areas inundated, according to the disaster agency and state media. A 30-year-old bridge over the Red River in the northern province of Phu Tho collapsed on Monday, leaving eight missing, according to a statement from the provincial People's Committee. Authorities have subsequently banned or limited traffic on other bridges across the river, including Chuong Duong Bridge, one of the largest in Hanoi, according to state media reports. "Water levels on the Red River are rising rapidly," the government said on Tuesday in a post on its Facebook account. Using public loudspeakers commonly used to broadcast Communist propaganda in the past, officials warned residents of the capital's riverside Long Bien district to be on alert for possible flooding, and to be ready to evacuate the area. Flood waters have already inundated villages on the outskirts of Hanoi, state broadcaster VTV reported, and authorities were already evacuating residents from there. Evacuations were also taking place from flood-prone areas in Bac Giang province, the government said, where the typhoon and floods have caused damage estimated for now to be worth 300 billion dong ($12.1 million). More than 4,600 soldiers have been deployed in the province to support the evacuation and support flood victims. Lao Cai province has reported the highest casualties with 19 people killed and 11 missing, mostly in landslides, according to the disaster management agency. Floods have also inundated 148,600 hectares or almost 7% of rice fields in northern Vietnam and 26,100 hectares of cash crops and damaged nearly 50,000 houses in northern Vietnam, according to the agency. ($1 = 24,665 dong) Sign up here. https://www.reuters.com/world/asia-pacific/death-toll-vietnam-typhoon-yagi-rises-58-2024-09-10/
2024-09-10 05:41
Gold steady ahead of US CPI due on Wednesday Platinum market faces million-ounce deficit in 2024, WPIC says Sept 10 (Reuters) - Gold prices were little changed on Tuesday as investors exercised caution ahead of a key U.S. inflation reading on Wednesday that could influence the Federal Reserve's policy decision next week. Spot gold was steady at $2,506.59 per ounce by 1031 GMT. U.S. gold futures were little changed at $2,535.20. The U.S. consumer price index for August is expected to have risen 0.2% on a month-on-month basis, according to a Reuters poll, unchanged from the previous month. The Fed looks set to cut interest rates at its meeting next week, with further cuts likely to boost ETF (exchange-traded fund) inflows and drive gold to $2,600/oz by year-end, UBS analyst Giovanni Staunovo said. Markets are currently pricing in a 73% chance of a 25 basis point U.S. rate cut on Sept. 18, and a 27% chance of a 50 bps cut, the CME FedWatch tool showed. Zero-yield bullion tends to be a preferred investment amid lower interest rates. Gold will also enjoy tailwind from elevated geopolitical tensions as well as downside risks to the global economy, said Han Tan, chief market analyst at Exinity Group. "Physical bullion demand could also get a seasonal lift ahead of major festivities in India and China." [GOL/AS} Spot silver rose 0.2% to $28.39 per ounce. Platinum gained 0.5% to $942.75 and palladium was up by 1.2% to $958.25. A surge in sales of hybrid cars as electric vehicle take-up slows is set to provide an unexpected boost to demand for platinum group metals in the coming years. Meanwhile, the global platinum deficit in 2024 will be twice as high as previously expected due to inflows to ETFs and purchases of large bars in China, the World Platinum Investment Council said. Sign up here. https://www.reuters.com/markets/commodities/gold-prices-edge-lower-ahead-us-inflation-print-2024-09-10/
2024-09-10 05:21
TOKYO, Sept 10 (Reuters) - Japan's weather bureau said on Tuesday there was a 60% chance of a La Nina phenomenon occurring from now until winter in the Northern Hemisphere. A La Nina event is characterised by unusually cold ocean temperatures in the equatorial Pacific region and is linked to floods and drought. Sign up here. https://www.reuters.com/business/environment/japan-weather-bureau-says-60-chance-la-nina-occurring-now-until-winter-2024-09-10/
2024-09-10 05:21
Analysts unanimously predict rate cut Estimates range from 100 bps to 200 bps KARACHI, Sept 10 (Reuters) - Pakistan's central bank is expected to cut its key interest rate further during its policy meeting on Thursday, analysts said, after inflation dropped to single digits in August for the first time in nearly three years. That would follow two consecutive cuts - of 150 basis points in June and 100 bps in July - that have taken rates from an all-time high of 22% to their current standing of 19.5%. All 14 analysts polled expected another cut, two of them of 100 bps, 10 of 150 bps, and another two of 200 bps. July's reduction came after a staff level agreement with the International Monetary Fund (IMF) and the introduction of a new state budget which set ambitiously high tax and revenue-raising targets for the government. In August, central bank chief Jameel Ahmed told Reuters the recent interest rate cuts had had the "desired effect". In his first interview since assuming the role in 2022, he said inflation continued to slow and the current account remained under control, despite the cuts. Pakistan's annual consumer price inflation rate slowed to 9.6% in August, the first single-digit reading in almost three years. Ahmed said the Monetary Policy Committee will review all these developments and that future rate decisions could not be pre-determined. Ammar Habib, an economist who predicted a 200 bps cut in the poll, said real interest rates of 10% are at the highest level in the last three decades. "Risks to inflation are also low given softening commodity prices and a fiscally prudent stance of the government for now. In view of this, it makes sense to do at least a 200-bps cut without hurting FX expectations too much," Habib said. Sign up here. https://www.reuters.com/world/asia-pacific/pakistans-central-bank-expected-cut-rates-2024-09-10/
2024-09-10 05:17
U.S. inflation likely moderated year-on-year in August Focus on U.S. presidential debate; Trump win means higher USD China misses import forecasts Yen, Swiss franc rise as bank shares, oil fall NEW YORK, Sept 10 (Reuters) - The dollar slid against some major currencies on Tuesday, consolidating Monday's gains ahead of key inflation data and a highly anticipated U.S. presidential debate, even though neither outcome is likely to affect overall monetary policy. Safe-haven currencies such as the yen and Swiss franc also gained amid a rout in bank shares, analysts said, after the Federal Reserve's regulatory chief on Tuesday outlined a plan to raise big banks' capital by 9%. That disappointed bank investors and some critics of the rule. The S&P 500 banks index (.SPXBK) , opens new tab fell 2.7% to 408.2, after earlier falling to a one-month low. The Federal Reserve is widely expected to cut interest rates next week for the first time in more than four years. What is still up for debate, though, is the size of the rate cut. Fed funds futures have priced in a 67% chance of a 25 basis point (bp) cut at the Sept. 17-18 policy meeting, and a 33% probability the Fed might do 50 bps, according to LSEG calculations. The odds on the 50-bp cut rose as high as 50% last Friday after a mixed U.S. labor report. "The general theme is consolidation. If you look at the one-month chart of the dollar index, we're basically in the middle of the range," said Eugene Epstein, head of structured products, North America at Moneycorp in New York. "So we have been grinding higher from the lows in late August and the driver of that has been mainly on the rates front. The market had pretty high expectations on the Fed cut next week ... but some of those expectations have been dialed back," he added. Investors will still be looking at the U.S. consumer price index report for August due for release on Wednesday. The Fed, however, has indicated that it is focused less on inflation and more on employment and remained confident that U.S. inflation is on a downward trajectory. The headline U.S. CPI is expected to have risen 0.2% on a month-on-month basis in August, according to a Reuters poll, unchanged from the previous month. However, on a year-on-year basis, it is seen to have gained just 2.6%, down from 2.9% in July. In afternoon trading, the dollar fell 0.5% against the yen to 142.35 yen , not far from the one-month low of 141.75 touched on Friday. The greenback fell 2.7% last week against the yen. Analysts do not expect the Bank of Japan to raise rates or to provide decisive guidance when it meets on Friday next week. Against the Swiss franc, the dollar slid 0.3% to 0.8466 franc . The drop in oil prices added to global jitters, pushing the yen and Swiss franc higher, analysts said. Global oil benchmark Brent crude futures settled at their lowest since December 2021 on Tuesday, after OPEC+ revised down its demand forecast for this year and 2025, offsetting supply concerns from Tropical Storm Francine. Meanwhile, the euro slipped 0.1% to $1.1024. Investors are watching Europe's political backdrop, citing the stalemate in France and heightened uncertainty across the EU after German regional elections. The spotlight though will be on the messaging from the European Central Bank on Thursday after its policy meeting. Traders are pricing in 63 bps of ECB easing this year. The dollar index, a gauge of the greenback's value against six major currencies, was flat to slightly lower at 101.63 . So far this year, the dollar index was up 0.1%. Investor focus will also be on the televised U.S. presidential debate between Republican nominee Donald Trump and his rival, Democratic Vice President Kamala Harris, later on Tuesday that could weigh heavily on the November election. Investors see the greenback rising in the event of a Trump victory, as tariffs might prop up the currency and higher fiscal spending could boost interest rates. The pound, meanwhile, rose after UK data showed robust employment growth. It was last up 0.1% at $1.3081 . In China, the country's imports missed forecasts and grew just 0.5%. That followed Monday's lower-than-expected inflation data, highlighting still weak domestic demand. China's yuan eased slightly versus the dollar, which rose 0.1% to 7.1193, with losses capped by better-than-expected export data. Sign up here. https://www.reuters.com/markets/currencies/currencies-tread-with-caution-ahead-us-inflation-test-2024-09-10/
