Japan's July Trade Report Unveils Global Weakness In Third Quarter Japan's July trade report evidenced that the country's economic recovery was dampened by global economic slowdown. While the headline deficit figure was largely inline with market expectations, the steep decline in exports, due both to global economic slowdown and strength in Japanese yen) generated much concern, not only due to the free fall in shipment to Europe, but also because of the accelerated pace of the decline to Asia, especially China. The report suggested that Japan's economic growth would increasingly be reliant on domestic demand which would unlikely be sufficient to boost the country GDP growth to a meaningful extent. The report signaled that dismal exports would continue to trim Japan's growth in 3Q12. Read more... PBOC Ought To Accelerate Easing Steps, As Recent Data Shows The PBOC's injection of a total of RMB 220B through reverse repos to the public (RMB 150B using 7-day contracts at 3.4% and a further RMB70B billion using 14-day contracts at 3.6%) has led many to push back their forecasts of rate cut or RRR reduction by the government. Yet, recent data suggested the world's second largest economy has not benefited much from previous easing implemented by the government. Since out last China Watch, both the FDI and the PMI data missed expectations, suggesting the government should step measures to stimulate the economic growth, ensuring it would meet the target of +7.5% this year. Read more... Dovish August Minutes, Fed Signaled Additional Monetary Easing Soon The Fed released another dovish minutes for the FOMC meeting in August. As the minutes indicated that many members believed that more monetary easing measures should be implemented soon unless upcoming economic data showed 'a substantial and sustainable strengthening' in economic recovery. Further monetary easing has now become a matter of 'when', instead a matter of 'if'. Policymakers considered discussed a variety of easing measures, ranging from language guidance to balance sheet expansion. As the meeting was held before release of the July employment report, we believe the next trigger point would be the September report, together with the Beige book and Fed Chairman Ben Bernanke’s Jackson Hole address on August 31. Read more... |
No comments:
Post a Comment