Archives for June 2020

In an interview with CNBC, Hendry said that quantitative easing programs, where central banks buy assets like government bonds to inject liquidity into the economy, are not working.

“Quantitative easing – we’re being missold something,” Hendry argued. “Simply publishing or expanding these inert central bank reserves and trying to scare us all to death that they’re actually printing real money is a fraud.”

He said that “America has decided over several decades to impose a global dollar standard, a monetary standard on the rest of the world. It’s one thing to be the king, [but] you have to behave regally, you have to behave like the king.”

“So, if you’re going to impose a dollar standard on the world, you have to stand by and provide sufficient liquidity. And that’s actually where they’ve been failing.”

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According to Hendry, the widespread sell-off in March, where global markets plunged amid the coronavirus pandemic, was partially due to investors having to sell assets in order to create dollars and repay debt.

Hendry then suggested an alternative approach to support the economy, saying: “In terms of stopping these periodic dramatic flares, would it not be better to target not bond prices, but instead to target the actual value of the dollar?”

Hendry explained: “When I look at the world of macro, I think it’s telling us that we need a lower print on the dollar itself. I think we need the Treasury, and not the Fed, to step up to the plate and tell the world ‘we’re going at target 70 or 60 on the dollar index.’ That would change the world.”

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Article source: https://www.rt.com/business/493358-us-dollar-devaluation-world/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Ministers discussed the country’s 5G rollout plans on Monday, the same day New Delhi announced its decision to block 59 Chinese-owned “malicious” mobile apps over alleged security and privacy concerns. According to the Times of India, the officials are unsure whether they should allow Chinese firms to participate in the development of the new technology inside the country.

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The possible ban would mark a U-turn for India’s stance on Huawei, which was given the green light to enter the local 5G market just six months ago. In December, the government announced that all network equipment makers could participate in 5G trials.

In May, the auction for the 5G spectrum was postponed in India until at least next year, due to the disruption caused by the coronavirus outbreak. That gives the government more time to decide on the use of Chinese equipment in its 5G rollout. Beijing has previously warned that it could retaliate and target Indian firms operating in China if New Delhi bars Huawei from doing business in the country.

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India’s possible change of heart on Huawei comes after a deadly clash between Chinese and Indian troops in a disputed area in the Himalayas. New Delhi lost 20 soldiers in the skirmish, while China is yet to officially announce its casualties.

Huawei has become one of the main US targets in its trade war with China, with Washington pressuring its allies to blacklist the tech company. While the US has managed to persuade some countries that Huawei poses a security threat, many nations are not excluding the firm from their markets.

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Article source: https://www.rt.com/business/493325-india-huawei-5g-ban/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

That’s the biggest decline since the third quarter of 1979. The ONS had previously estimated a two percent drop, but it revised the figure after data showed a record 6.9 percent slump in March.

According to recent ONS monthly figures, the economy nosedived by 20.4 percent in April, which is the largest drop in a single month since records began. The decline was three times greater than that seen during the whole of the 2008-9 economic downturn.

Earlier this month, the Bank of England warned the economy may have contracted by 20 percent in the first half of 2020.

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“Our more detailed picture of the economy in the first quarter showed GDP shrank a little more than first estimated,” said Jonathan Athow, deputy national statistician at the ONS. “All main sectors of the economy shrank significantly in March as the effects of the pandemic hit.”

Statistics showed the household savings ratio soared to 8.6 percent in the first quarter from 6.6 percent in the previous three months, reflecting the cutback in consumer spending. Athow said that “the sharp fall in consumer spending at the end of March led to a notable increase in households’ savings.”

UK Prime Minister Boris Johnson is expected to report on the economy on Tuesday and to set out plans to accelerate £5 billion (over $6 billion) of spending on infrastructure projects.

Britain’s current account deficit ballooned to £21.1 billion ($26 billion) during the quarter, from £9.2 billion ($11 billion) in the fourth quarter of 2019.

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Article source: https://www.rt.com/business/493321-uk-economy-worst-fall-coronavirus/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

The official manufacturing purchasing managers’ index (PMI) for the country’s manufacturing sector rose to 50.9 in June, up from 50.6 in May, the National Bureau of Statistics (NBS) said on Tuesday. A reading above 50 reflects growth in factory output, while a reading below signals contraction.

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This was slightly above economists’ forecasts, as analysts polled by Reuters expected the index to stand at 50.4, and those surveyed by Bloomberg predicted 50.5.

The statistics agency said that manufacturing growth was supported by stronger supply and demand, with the index for new orders rising for two consecutive months. In June, it hit 51.4, up 0.5 percent from May’s 50.9.

China vows to stick to trade deal with US despite rising conflict

Data released on Tuesday also shows that another indicator of economic health, the official non-manufacturing PMI, came in at 54.4 in June, gaining 0.8 percent in one month. The figure has been rising for four consecutive months, but in June it posted the fastest growth since last November.

“The latest survey data suggest that economic growth accelerated in June thanks to a faster recovery in manufacturing and services, alongside continued strength in construction activity,” Julian Evans-Pritchard of Capital Economics wrote, adding that the recovery should remain robust in the coming months.

Although both the import and export indices improved as countries are starting to reopen, external demand remained sluggish, the NBS noted. The index for new export orders rose by more than seven percentage points to 42.6 for the month of June, but remained below the critical point, according NBS senior official Zhao Qinghe.

He also stressed that some “uncertainties” continue to exist both inside and outside China. The external market is under pressure as countries are still battling with the deadly virus. Domestically, Chinese small firms are suffering more than larger businesses, while some industries, including textile and wood processing, are struggling to return to normal.

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Article source: https://www.rt.com/business/493313-china-economic-activity-coronavirus/?utm_source=rss&utm_medium=rss&utm_campaign=RSS