U.K. Prime Minister Boris Johnson announced to the European Union that he is keen to look into different ways to “prevent a hard border on the island of Ireland”, according to Bloomberg.
In this first public attempt to renegotiation a Brexit deal, Johnson sent a letter to the European Council President Donald Tusk, stating that he wants to replace the backstop provision - which is one issue that Johnson said he will not consider in the negotiations in his pre-election debate – with a “legally binding commitment.
On Saturday, a drone attack on Saudi Arabia by Yemen’s Houthi rebels caused a fire to erupt in a Saudi oil and gas field. This morning we are seeing the results of this attack on crude oil prices, which have seen a rise.
According to Euronews “brent crude <LCOc1> was up 45 cents, or 0.8 percent, at $59.09 a barrel at 0035 GMT, and U.S crude <CLc1> was up 39 cents, or 0.7 percent, at $55.26 a barrel.
The National Bureau of Statistics (NBS) of China released the Consumer Price Index (CPI) for July this morning, showing that the index is up 2.8 percent – the highest reading since February last year.
The index, which is a key indicator to measure inflation and changes in purchasing trends, showed that food prices grew 9.1 percent year on year last month, which was an increase from 8.3 percent in June.
The bureau also released the Producer Price Index (PPI), which showed a fall to minus 0.3 percent in July compared to a year ago and a decrease from the flat reading in June.
As the trade war rages on between the two strongest economies in the world, China and the U.S, China’s strategy is to continue to weaken its currency.
The central bank of China set the midpoint of the renminbi’s (as known as the Yuan) daily trading above seven to the American Dollar for the first time in more than a decade yesterday, according to The New York Times. This decision suggests that the currency may weaken further, an act that may assist Chinese factories ‘offset the higher costs of Mr. Trump’s tariffs when selling their goods to the United States,’ the newspaper said.
The Reserve Bank of New Zeeland’s (RBZN) Monetary Policy Committee announced today that the Official Cash Rate will be reduced to 1.0 percent. This decision was made because the committee believes it is a necessity for future employment and inflation objectives to be met.
Zooming in on these two factors, the official report from the RBZN states that employment is around its maximum sustainable level at the moment, while inflation remains within the bank’s target range, but below the two percent mid-point.
In a meeting today, the Reserve Bank of Australia (RBA) Board decided to leave the cash rate stable at 1.00 percent.
In a statement announcing the fact, Philip Lowe, the Governor of RBA stated that “the increased uncertainty generated by the trade and technology disputes is affecting investment and means that the risks to the global economy remain tilted to the downside.”
Referring more specifically to Australia, the Governor said that growth has been lower than expected in the first half of the year, but it is expected to pick-up in the second half.
The big news at the end of last week was that U.S President Donald Trump announced that he would impose a ten percent tariff on a further $300 billion in Chinese imports. China has now hit back by allowing the Yuan to fall to the weakest level in more than a decade this morning and asking state-owned companies to suspend imports of U.S agricultural products, according to Bloomberg.
In an interview this morning, journalist for Bloomberg Anna Kitanaka said “this is a significant move in terms of how symbolic this is because China has already been decreasing its purchases of U.
U.S President Donald Trump surprised the world economy as a whole yesterday as he announced that he would impose a ten percent tariff on a further $300 billion in Chinese imports. This could only be the beginning as the new import taxes could go “well beyond 25 percent” Trump said.
The trade war was thought to be winding down a little lately as talks had started up again after President Trump and Chinese President Xi Jinping had spoken in Osaka a few weeks ago. Then the two leaders agreed they would leave tariffs as they were for as long as they were talking.
Yesterday Federal Reserve (Fed) Chairman Jerome Powell announced that the central bank will lower interest rates for the first time since the 2008 recession. This measure will be put in place to prevent the possibility of an economic slump, according to Powell but it is not the start of a lengthy easing cycle.
“We’re thinking of it as essentially in the nature of a mid-cycle adjustment to policy,” Powell said at a press conference following the announcement of the quarter-percentage-point reduction. “It’s not the beginning of a long series of rate cuts,” he said.
This morning the Australian Bureau of Statistics released the Consumer Price Index for the second quarter, showing that the Consumer Price Index (CPI) rose 0.6 percent, following no movement for the March quarter. The yearly CPI shows that over the twelve-month period to the June quarter 2019, it is up by 1.6 percent.
According to the report, the most significant price rises for the second quarter of 2019 were automotive fuel, which was up by 10.2 percent, medical and hospital services, that saw an increase of 2.6 percent and international holiday, travel and accommodation, up by 2.7 percent.