México

Guyana

Trinidad
& Tobago

 




Very usefull links



PW
Bookstore





News links

AP

AFP

Aljazeera

Dow Jones

Oil price

Reuters

Bloomberg

Views and News
from
Norway

 

 

 

 

 

A synchronized slowdown is looming: World Economy this week

Daniel Acker / Bloomberg


The trade war is starting to hurt China's economy for good, with manufacturing output on the verge of contraction and export orders at a two-and-a-half low.

By Alessandro Speciale

FRANKFURT
Petroleumworld 11 02 2018

The risk of synchronized slowdown in global growth as Europe wobbles, China sputters and stock markets around the world keep crumbling dominated the world economy this week. Adding to the gloomy picture, emerging markets are under pressure and central banks face fresh challenges to their independence.

Check back later on Friday for U.S. nonfarm payrolls  data, that may show hiring improved amid data volatility due to Hurricane Michael in early October following Hurricane Florence in mid-September. 

Here's our weekly wrap of what's going on in the world economy.

Slowing Growth

The trade war is starting to hurt China's economy for good, with manufacturing output on the verge of contraction and export orders at a two-and-a-half low. The government in Beijing is prepared to respond with further stimulus but this may not be enough. Taiwan and Korea are also faltering, while U.S. President Donald Trump now wants to reach an agreement on trade with Chinese President Xi Jinping at the Group of 20 nations summit in Argentina later this month and has asked key U.S. officials to begin drafting potential terms. 

The chill is also hitting Europe, where the pace of growth halved in the third quarter even as inflation accelerated . For now the European Central Bank may put a brave face on the data but companies are unconvinced . With Italy stagnating and Germany set to do the same, only Spain remains as a bright spot . Emerging markets ended October in the red . This leaves the U.S. to drive global growth. Consumers haven't been this upbeat since the start of the millennium and the job market remains solid . To finance the tax cuts and spending hikes the Trump administration is planning to increase debt sales above the levels seen during the great financial crisis, and economists expect U.S. growth will moderate in 2019. For now, though, Trump is going into the midterms with the strongest economy since Lyndon Johnson over 50 years ago  even if only history will tell if this is real or just favorable optics.

 

Central-Bank Divergence

The Federal Reserve never had it so good on inflation but labor costs heating up  set the stage for more rate hikes. Ironically, the divergence between the U.S. and China is contributing to weakness of the yuan , which fell to the lowest level in a decade . The Bank of Japan stayed the course on monetary policy as inflation continues to slip out of reach, but there are changes in the way it buys bonds. The ECB is still on track to end bond-buying this year  yet it won't raise rates much above zero before the next recession and one of its newest policy makers wants to shake up the way it looks at its inflation target. In emerging markets, South Africa 's central bank sees higher rates, while Thailand may have to delay the first increase in borrowing costs since 2011.

Political Pressures

With a Brexit deal once again in sight, Bank of England Governor Mark Carney said the central bank is ready to respond , though his warning that a no-deal outcome would mean rate hikes isn't convincing economists. And as the world prepares to bid good bye to Angela Merkel, her economic record is impressive  at least when it comes to unemployment.

Elsewhere in the world, the tensions between populist politicians and central bankers over their independence continued. In India the government has tried to defuse tensions after threatening to use special powers . In Italy, the governor and the finance minister sparred over the populist government's spending plans  and even a Bundesbank economist weighed in with a radical plan to halve the country's debt. In the U.S., Fed Chairman Jerome Powell may find that Wall Street is his best insurance against Trump's barbs. In Brazil, the election of Jair Bolsonaro has sparked a market rally and his economic top aide promises business-friendly policies and a blunt style matching that of his boss. A new central bank chief could come as early as next week. And hear all about corporate behemoths changing banks  and China's plans for dominating global manufacturing , in our New Economy podcast.

 

Original article

_________________________

Story by Alessandro Speciale from Bloomberg

bloomberg.com 11 02 2018

_________________________

We invite all our readers to share with us
their views and comments about this article.
Write to editor@petroleumworld.com

By using this link, you agree to allow PW
to publish your comments on our letters page.

Any question or suggestions,
please write to: editor@petroleumworld.com

Best Viewed with IE 5.01+ Windows NT 4.0, '95, '98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels

Twitter: @petroleumworld1

November 13 - 15, 2018.

Gubkin University, Moscow
SPE Student Chapter

 

 

 

 

 

 

TOP

Contact: editor@petroleumworld.com,

Editor & Publisher:Elio Ohep/
Contact Email: editor@petroleumworld.com

CopyRight © 1999-2016, Paul Ohep F. - All Rights Reserved. Legal Information

PW in Top 100 Energy Sites

CopyRight©1999-2017, Petroleumworld   / Elio Ohep - All rights reservedThis site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission fromPetroleumworld or the copyright owner of the material.