More Central Banks Cut Interest Rates, Persistent Trade Tensions, and Lower Inflation
August 8, 2019
Central bank interest rates were cut by 25 basis points today in the Philippines and Serbia. Earlier this week, rates had been reduced by central banks in India (35 bps), Thailand (25 bps), and New Zealand (50 bps). The common thread in these moves is the trade war unleashed by U.S. President Trump, the weaker global growth such has caused, and the lower outlook for inflation and monetary policy interest rates in major advanced economies.
The dollar today is little changed. Of note, however, is a slide of the yuan to 7.0472 per dollar at present despite a stronger fixing by the Peoples Bank of China.
Bond yields and share prices are mostly higher. Gold retreated 1% but is still above $1500 per ounce.
WTI oil rebounded 2.5% but remains soft at $52.34 per barrel.
Brazilian CPI inflation slid further to a 13-month low of 3.22% last month from 3.37% in June, 4.66% in April and 4.94% in April.
Mexican CPI inflation of 3.78% in July was at a 31-month low compared to a high of 6.77% at end-2016.
Japan’s economy watchers index fell sharply in July by 2.8 index points to a 37-month low of 41.2.
China reported another robust trade surplus in July of $45.06 billion, bringing the year-to-date total to 225 billion dollars versus $163 billion in January-July of 2018. Imports were 5.6% lower in July than a year earlier.
Japan’s current account surplus of JPY 1.211 trillion in June was similar to JPY 1.211 billion in June 2018. Exports and imports were each 7.5% smaller than a year earlier.
U.S. new jobless insurance claims averaged 212.25k in the last four weeks, down from 219.25k in the previous four-week period.
Spanish industrial production fell 0.2% on month in June but was 1.8% greater than a year earlier. the average on-year gain last quarter was 1.7%.
Copyright 2019, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Bangko Sentral Ng Pilipinas, Central Bank of Thailand, China trade balance, Japan current account, Mexican and Brazilian CPI, National Bank of Serbia, Reserve Bank of India, Reserve Bank of New Zealand, Spanish industrial production