Archives of “May 18, 2020” day

rss

Japan GDP for Q1, preliminary: GDP -0.9% sa q/q (vs. expected -1.1%)

  
Analysis, Economy
#  #  #  #  #  #  #  #  #  #

Japanese economic growth in the January to March quarter of 2020 – this the preliminary release

GDP -0.9% sa q/q
  • expected -1.1%, prior -1.8%

GDP -3.4% annualised sa q/q

  • expected -4.5%, prior -7.1%
GDP -0.8% nominal q/q
  • expected -1.3%, prior -1.5%

GDP deflator (an inflation indication) %

  • expected 0.7%, prior 1.2%

Private consumption -0.7%

  • expected -1.6% q/q, prior -2.8%

Business spending -0.5% (capex)

  • expected -1.5%, prior -4.6%
More:
  • 2 consecutive quarters of contraction for the Japanese economy, the economy moves into recession for the first time since H2 of 2015
  • Q1 exports had their biggest drop q/q since the 2nd quarter of 2011, down 6%
January and February were stable to slowly picking up for Japan but the outbreak in  March hit economic growth. The April to June quarter is likely to be even worse, with a more prolonged impact. Restrictions were imposed by the April 7 national emergency declaration shutting many restaurants, large retail outlets, hotels and more. The restrictions were partially lifted on May 14, but are still in place for Tokyo and Osaka, the two largest cities in Japan.
Yen doing little.

Huawei update – Trump wants to block the firms access to chips, China’s commerce ministry will do what it takes

  
  Analysis
#  #  #  #  #  #

The US Commerce Department said it would restrict the ability of Huawei to develop semiconductors abroad with US technology.

A late on Friday afternoon US time (into the evening) WSJ report (may be gated):
  • Trump administration said it would impose export restrictions
  • These are designed to cut Huawei’s access to overseas suppliers
  • to stop foreign semiconductor manufacturers whose operations use US software and technology from shipping products to Huawei without first getting a license from US officials
Over the weekend China’s Commerce Dept (CNBC link) said
  • it is firmly opposed
  • it will take all necessary measures to safeguard Chinese firms’ rights and interests
  • it urges the US to immediately stop the policy
The US Commerce Department said it would restrict the ability of Huawei to develop semiconductors abroad with US technology.
The moves threaten to ignite a new round of US-China economic tensions.

Trump from the golf – says coronavirus destruction could have been stopped by China

  
  Analysis
#  #  #  #  #  #  #

President Trump speaking on a TV golf telecast (NBC) – Trump phoning in the comments.

Various remarks, but once again on his bungling of the crisis (latest update has US deaths above 88,000) seeks to blame others: 
  • Says COVID-19 destruction could have been stopped by China
  • says US needs sports back to boost the country’s psyche
  • we want big, big stadiums loaded with people
President Trump speaking on a TV golf telecast (NBC) - Trump phoning in the comments. 

China’s Global Times editor calls on China to step up its nuclear warheads, deterrence

  
Analysis, Politics

Says that the US is very powerful, & unfriendly to China and therefore calls on China to expand its number of nuclear warheads & enhance nuclear deterrence

A tweet from Hu Xijin, Editor-in-chief of Chinese and English editions of the Global Times
Says that the US is very powerful, & unfriendly to China and therefore calls on China to expand its number of nuclear warheads & enhance nuclear deterrence
The GT editor is often outspoken well beyond the bounds of everyday diplomatic language. Pretty strong stuff here from him over the weekend.

Fed’s Powell says economy will recover ‘steadily’ through 2nd half of 2020

  
  Analysis

Powell on CBC’s ‘Face the Nation’

Powell on CBC's 'Face the Nation'
  • It’s going to take ‘a while’ to get back all GDP lost
  • Economic recovery needs people to fell confident about virus and safety
  • Full confidence may have to await arrival of a vaccine
  • US recovery may stretch through the end of next year
An improvement in the second half is inevitable, if only because of the crippling extent of the contraction in Q2 but that’s the wrong way to think about it. The real question — and that’s what Powell is touching on here — is that when we get back all the growth that was lost in the pandemic.
He’s talking about it taking until the end of 2021 but that’s optimistic. Firstly, no one knows how long a vaccine is going to take. If we never get one, the impairment is going to be severe; like a Great Depression.
However if we get one in a year, I still think it takes well beyond 2021. The virus is going to do so much damage to corporate, household and government budgets that you really can’t get on track until you’ve returned to full output and then had time to pay it back. On top of that, many governments will be forced to raise taxes (or cut spending) to get climb out of the coronavirus hole. That will restrain future output.
Go to top