Japan’s economy sees consumption-led rebound in tailwind for BOJ
==========

Japan's economy rebounded in Q2 with a 3.1% annualized growth, driven by an increase in private consumption; The rebound in personal spending is attributed to wage increases and a tax rebate; The Bank of Japan (BOJ) is looking for evidence that wage gains will spur personal spending and generate stable demand-led inflation; BOJ governor Kazuo Ueda stated that the board would continue hiking rates if economic data were in line with forecasts; The data create a supportive background for the government as the ruling Liberal Democratic Party (LDP) prepares to select a new prime minister; Private spending is expected to gain momentum with recent wage growth; Recent strengthening of the yen may soothe shoppers' concerns about price hikes; Japan's exports have increased for seven months through June, supported by demand for chip-making gear; Japan continues to benefit from inbound tourism; A record 17.8 million foreign visitors came to Japan in H1 2024, spending ¥2.1 trillion in Q2 2024; The yen has recently gained amid expectations of a narrowing US-Japan interest rate gap; The International Monetary Fund warns of a potential risk to global growth from interest rates staying higher for longer.

#Japan #Economy #BankOfJapan #Consumption #WageGains #Inflation #Government #LiberalDemocraticParty #Exports #Tourism #Yen #InterestRates #GlobalGrowth

https://theedgemalaysia.com/node/722854 

 US junk debt investors cautious of leveraged loans as economy slows
==========

Leveraged loan deals are expected to pick back up after a stabilization in markets over the past week; Borrowers pulled back on leveraged loan deals last week, following disappointing jobs data on Aug. 1 and Aug. 2; A total of six leveraged loans worth $3.3 billion sold last week, which falls well short of the $10 billion weekly average this year; One junk-rated loan deal sold on Monday, airline JetBlue Airways' five-year term loan; Leveraged loan funds reported $3.1 billion in outflows last week, which is the most since March 2020; The Morningstar LSTA US Leveraged Loan Index fell 0.55% on Aug. 5, the worst daily performance for the index since the collapse of Silicon Valley Bank in March 2023; A gap between net loan supply and investor demand since the Fed began hiking rates in 2022 should sustain demand for new loan deals through the end of this year; Further signs of an economic slowdown and aggressive Fed rate cuts could prove detrimental to certain leveraged borrowers' refinancing or new loan plans.



https://theedgemalaysia.com/node/722840 

 US producer prices rise less than forecast, dragged by services
==========

US producer prices rose 0.1% in July, less than the forecasted 0.2% gain; The producer price index for final demand rose 2.2% compared to a year ago; The PPI excluding food and energy categories was unchanged in July; The core PPI rose 2.4% from a year ago; Services costs decreased 0.2%, while prices of goods climbed 0.6%; Traders pushed up odds of a half-point rate cut in September; The weakness in final demand services reflected a reversal in margins during the month after a large increase in June

#UsProducerPrices #Inflation #ServicesCosts

https://theedgemalaysia.com/node/722678 

 Most Asian shares jump ahead of key US, regional economic data
==========

Shares in major Asian emerging economies gained on Monday; Taiwan's benchmark stock index led regional gains and was up 1.4%; South Korean shares jumped 1.2%; MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.4%; Malaysian ringgit and South Korean won depreciated 0.5% and 0.6% respectively against the US dollar; China is set to issue retail sales and industrial production figures on Thursday; Chinese yuan and Shanghai stocks were down about 0.2%; Philippine central bank's key policy rate decision on Thursday; Malaysia's second-quarter gross domestic product (GDP) data on Friday; Bank of America analysts expect Malaysia's second-quarter final GDP to be revised upwards by 30 basis points (bps) to 6.1% on a year-on-year basis; Philippine peso weakened 0.1%; Indian rupee was flat; Indonesian rupiah edged 0.3% lower; US consumer prices and retail sales for July due later in the week; Markets are pricing in a 53.5% chance of a 25 bps cut and a 46.5% probability of a 50 bps interest rate cut at the Fed's September meeting; Data on US industrial output, regional manufacturing, and consumer sentiment expected later this week.

#AsianShares #UsEconomicData #RegionalEconomicData #StockMarket #Currencies #China #Philippines #Malaysia #UsConsumerPrices #RetailSales #FederalReserve

https://theedgemalaysia.com/node/722476 

 Small US inflation pickup won’t derail US Fed rate cut in September
==========

US inflation is expected to have risen 0.2% in July, but this is not enough to prevent the Federal Reserve from cutting interest rates next month. The recent easing of price pressures has given the Fed confidence to lower borrowing costs and focus on the slowing labor market. The July jobs report showed a decrease in hiring and an increase in the unemployment rate, triggering a recession indicator and a global stock market sell-off. Economists expect a slight pickup in inflation after June's low reading, particularly in core services excluding housing. However, the slowdown in shelter costs that began in June is expected to continue. Other upcoming data includes retail sales, inflation expectations, small business sentiment, industrial production, and new home construction. The Bank of Canada's rate cuts and key data from the UK, China, Norway, and New Zealand are also expected.

#UsInflation #FederalReserve #InterestRates

https://theedgemalaysia.com/node/722390 

 US yields dip after volatile week, traders eye inflation data
==========

US Treasury yields fell after a volatile week driven by concerns about the US economic outlook; Investors turned to key inflation data for clues about the potential size of an expected September rate cut; Yields have regained ground after a dramatic bond rally sent them to more than one-year lows on Monday; A bigger-than-expected drop in jobless claims on Thursday eased worries about an imminent US recession; Consumer price data on Wednesday is expected to show inflation continuing to edge down closer to the Fed's 2% annual target; Fed policymakers are increasingly confident that inflation is cooling enough to allow interest-rate cuts; The odds of the Fed cutting interest rates by 50 basis points in its next policy meeting is now seen at 55%; Yields on interest rate-sensitive two-year notes were last down 1.6 bps at 4.028%; Benchmark 10-year note yields fell 6.5 bps to 3.932%; The yield curve between two- and 10-year Treasury notes flattened 5 bps to -10 bps

#UsTreasuryYields #InflationData #InterestrateCuts

https://theedgemalaysia.com/node/722358 

 US Fed has cut rates amid stock swoons before. Not this time
==========

Speculation arises that the Federal Reserve may cut interest rates before its next scheduled meeting in September due to a slowdown in the US job market and global stock-market turmoil. However, analysts believe that the Fed is unlikely to move sooner and that the current economic data do not warrant an emergency intermeeting rate cut. Former New York Fed president Bill Dudley also considers an intermeeting cut to be very unlikely. Fed chair Jerome Powell is expected to provide further guidance on the potential rate cut at the September meeting based on upcoming data on jobs, inflation, consumer spending, and economic growth. In the past, the Fed has cut rates between policy-setting meetings in response to events such as the Russian financial crisis, the technology stock swoon, the September 11 attacks, the global financial crisis, and the Covid-19 pandemic.

#UsFederalReserve #InterestRates #StockMarket #Employment #PriceStability

https://theedgemalaysia.com/node/722240 

 Trump signals interest in influencing US Fed decisions if he regains White House
==========

Republican candidate Donald Trump stated that US presidents should have a say in decisions made by the Federal Reserve, indicating his interest in infringing on the central bank's independence if he becomes president again; Trump allies have drafted proposals to erode the Fed's independence; Trump believes he has a better instinct than those on the Federal Reserve or the chairman; Trump should be consulted on interest rate decisions and Fed banking regulation proposals should be subject to White House review if he becomes president; The Fed chair and board members are nominated by the president but enjoy operational independence; Economists worry that Trump's influence on the Fed could lead to policy missteps; Current Fed chair Jerome Powell's term expires in 2026; Trump has criticized Powell's interest rate hikes and threatened to fire him during his presidency.

#DonaldTrump #UsFederalReserve #InterestRates #CentralBank #Independence

https://theedgemalaysia.com/node/722219 

 Barkin Says Fed Has ‘time’ to assess economy, determine response
==========

Federal Reserve Bank of Richmond President Tom Barkin says the central bank has time to assess whether the US economy is normalizing or softening; Barkin is optimistic about inflation readings in the coming months; Fed officials are shifting focus to the labor market; Financial markets reassess the Fed's stance on interest-rate policy after July jobs report; Investors are pricing in about a percentage point of interest-rate cuts this year; Some economists expect a jumbo half-point rate reduction at the next gathering in September; The Fed's preferred price gauge rose 2.5% in June from a year earlier; Barkin believes inflation is settling down and will continue to do so.

#FederalReserve #UsEconomy #Inflation #InterestRates #LaborMarket

https://theedgemalaysia.com/node/722215 

 S&P 500 notches biggest rally since November 2022
==========

The S&P 500 experienced its largest rally since November 2022 as US initial jobless claims tumbled the most in nearly a year, easing concerns about a slowdown in the US economy. All major groups in the S&P 500 advanced. Treasuries dropped across the curve, led by shorter maturities. The S&P 500 rose 2.3%, the Nasdaq 100 climbed 3.1%, and the Russell 2000 added 2.4%. Nvidia Corp. led gains in megacaps, and Eli Lilly & Co. soared on a bullish outlook driven by sales of its weight-loss drugs. Treasury 10-year yields rose four basis points to 3.99%. Swap traders trimmed bets on aggressive Federal Reserve easing in 2024. Cryptocurrencies surged. US stocks remain at risk of more severe declines if growth continues to decelerate and the Fed does not show urgency in easing monetary policy, according to Dubravko Lakos-Bujas at JPMorgan Chase & Co. UBS Group AG's Solita Marcelli remains confident US stocks will continue their upward trajectory in the coming months. Liz Young Thomas at SoFi believes there is more volatility to come and cooler economic and earnings data that will need to be digested for the remainder of the year. Neil Dutta at Renaissance Macro Research questions whether the Fed should be easing soon and whether a large upfront move is likely or not.

#S&p500 #UsLaborMarket #StockMarket #Bonds #JoblessClaims #FederalReserve

https://theedgemalaysia.com/node/722213 

 Treasuries gain before US data offers clues on growth outlook
==========

Treasuries gained as investors awaited data on the US labour market and remarks from a Federal Reserve official for more clarity on the path of monetary policy; Yields fell across the curve, with Fed rate-cut bets little changed on the day; Bond markets swung wildly in the past days as investors became more worried about the outlook for the US economy after a bleak jobs report last week; The market will be watching a US$25 billion auction of 30-year Treasuries at 1pm as 'the final test of investor appetite for US government bonds this week'; JPMorgan Chase & Co now sees a 35% chance that the US economy will tip into recession by the end of this year, up from 25% at the start of last month; Swaps are currently pricing 112 basis points (bps) of easing from the Fed this year, compared with about 65bps just over a week ago, with the chance of a half-point cut in September seen at 70%; For the ECB, expectations are for 72bps of additional easing this year, with a quarter-point cut fully priced in September, and for the BOE, traders expect another 48bps of cuts.



https://theedgemalaysia.com/node/722172 

 Malaysia's care economy potentially worth US$25.5b — deputy minister
==========

Malaysia's care economy has a potential worth of US$25.5 billion (RM114.2 billion), according to Deputy Economy Minister Datuk Hanifah Hajar Taib. The global market potential from the ageing population is projected to be US$4.56 trillion by 2025. Malaysia can leverage this trend to enhance societal well-being and productivity through new economic sectors such as the caregiver economy. Malaysia's industries could benefit from the growing demand for healthcare services, including opportunities in healthcare and long-term care tourism, medical equipment supplies, and advanced medical technologies employing artificial intelligence and robotics. Private companies are encouraged to develop products and solutions targeting the elderly and the caregiver economy.



https://theedgemalaysia.com/node/722130 

 Municipal bonds see biggest rout in nearly a year as economic views swing
==========

Municipal bonds experienced a significant sell-off as investors reduced their flight to quality bid; Yields on 15-year benchmark bonds surged 13 basis points, the largest increase in almost a year; The longest-dated securities saw yields rise by 10 basis points, erasing earlier gains; The volatility in the state and local government bond market is due to investors reassessing the rally in safer assets; Chicago delayed its $643 million bond sale due to the market swings; The sell-off is driven by a rapid change in investor expectations around the economy; Investors are now more optimistic about the macro economy and strong micro fundamentals.



https://theedgemalaysia.com/node/722083 

 JPMorgan boosts US recession chance to 35% by end of 2024
==========

JPMorgan Chase & Co now sees a 35% chance of a US recession by the end of 2024, up from 25% last month. The bank cites weakening labor demand and signs of labor shedding as reasons for the increased risk. However, JPMorgan economists still believe there is a 45% chance of a recession by the second half of 2025. The bank also predicts a 30% chance of the Federal Reserve and other central banks keeping interest rates high, down from a previous 50% assessment. JPMorgan expects the Fed to cut rates by half a percentage point in September and November. Goldman Sachs also recently increased its probability of a recession in the next year to 25%. If a recession were to occur, JPMorgan economists believe central banks would respond with immediate easing measures.



https://theedgemalaysia.com/node/722076 

 Walt Disney warns of 'moderation in demand' at parks, as profit slips
==========

Walt Disney predicts a 'moderation in demand' at its theme park business in the coming quarters; Operating income at the parks is expected to be down 'mid single-digits' in the fiscal fourth quarter; Ben Barringer, technology and media analyst at Quilter Cheviot, says the parks results pour fuel onto the fire of concern about a slowing US economy; April-June operating income nearly tripled at Disney's Entertainment unit, with the combined streaming businesses of Disney+, Hulu, and ESPN+ posting a profit for the first time; Disney's experiences segment, which includes parks and consumer products, recorded an operating income drop of 3%; Adjusted earnings-per-share reached US$1.39 for Disney's fiscal third quarter, topping analyst estimates; Chief executive Bob Iger touts success in the entertainment division, where Disney's combined streaming businesses turned a profit a quarter ahead of projections; The movie studio is showing signs of resurgence with the success of "Inside Out 2" and "Deadpool & Wolverine"; The Entertainment division reported operating income of US$1.2 billion in the quarter; The Disney+, Hulu, and ESPN+ streaming services produced operating profit of US$47 million; Demand slid at domestic parks, cruise ships, consumer products, and some international parks delivered improved results;

#WaltDisney #ThemeParks #Profit #Demand #Entertainment #Streaming #Revenue

https://theedgemalaysia.com/node/722044 

 Brace for choppy oil market in near-term, say analysts
==========

Analysts are advising caution as the oil market is expected to remain volatile in the near term; Oil prices dropped to as low as US$75 on July 5, the lowest since December 2023, before rebounding later in the day; Brent crude added 0.27% to US$76.69 per barrel, while West Texas Intermediate advanced 0.37% to US$73.47 per barrel; Prices plunged last week as fears of a recession in the United States gathered pace and previously bullish investors sold their petroleum positions; The possibility of supply disruptions in the Middle East is helping to keep prices from falling off a cliff; SPI Asset Management managing partner Stephen Innes said that despite tensions in the Middle East, there has not been a major disruption to oil production; The US presidential election on November 5 could impact the future of the US oil and gas industries; Recent escalations in the Middle East, including the killing of Hezbollah and Hamas leaders, have heightened fears of a broader regional conflict; Venezuelan President Nicolas Maduro's victory in the election could influence Venezuela's oil production and the global oil supply; Geopolitical risks in the Middle East and supply concerns from Venezuela could influence market dynamics; OPEC+ may reevaluate production cuts if Brent crude prices remain weak; BMI expects the current weaknesses in the oil market to persist due to weak market conditions for demand; BMI's near-term view is that oil prices are set to rebound from the current levels, closer to the US$80 per barrel level; There is a growing expectation of a supply surplus later this year and into 2025 if OPEC+ countries proceed with their plan to start unwinding some of their voluntary cuts; Recent increases in fuel and crude stocks indicate that demand is failing to keep pace with supply.

#OilMarket #Volatility #SupplyDisruptions #MiddleEast #UsPresidentialElection #Venezuela #Opec+

https://theedgemalaysia.com/node/721983 

 Penang CM leads investment and trade mission to US
==========

Chief Minister Chow Kon Yeow is leading Penang’s investment and trade mission to the United States (US) from Sunday until Aug 14; The mission aims to renew ties and forge relationships with the corporate headquarters of American investors in Penang; It also aims to encourage the expansion of Penang sites and attract new investments; The mission seeks to update American companies on the latest developments and opportunities available in Penang; Penang recorded RM71.9 billion in investment inflows in 2023, the highest in Malaysia



https://theedgemalaysia.com/node/721598 

 Flaring economic worries threaten US stocks rally
==========

Economic fears are roiling Wall Street as concerns grow over the Federal Reserve's interest rates; US job growth slowed in July, heightening fears of a recession; Tech stocks have tumbled, with the Nasdaq Composite down over 10% from its July high; Investors are worried that elevated borrowing costs may be hurting economic growth; Earnings reports from companies like Caterpillar and Walt Disney will provide more insight into the health of consumers and manufacturing; Futures markets suggest growing unease about the economy, with a 70% chance of a 50-basis-point rate cut in September; The Cboe Volatility index hit its highest level since March 2023; Investors are flocking to safe-haven bonds and defensive sectors like healthcare and utilities; Some investors believe the data is just a reason to lock in profits after a strong market rally.

#UsStocks #EconomicWorries #FederalReserve #InterestRates #JobGrowth #Recession #TechStocks #BorrowingCosts #EarningsReports #FuturesMarkets #CboeVolatilityIndex #SafehavenBonds #DefensiveSectors

https://theedgemalaysia.com/node/721561 

 US rejects Vietnam's request to lift 'non-market economy' tag
==========

The Biden administration rejected Vietnam's request to be classified officially as a "market economy". Vietnam has been pressing for the status change since President Joe Biden's visit in September last year. The "non-market" economy label affects Vietnam in anti-dumping complaints. The US Commerce Department cited extensive government involvement in Vietnam's economy as the reason for the rejection. Vietnam has signed numerous free trade agreements and wants greater access to the US market. Changing Vietnam's market status has faced bipartisan Congressional push-back. Vietnam was removed from the US monitoring list for currency manipulation in 2022. Contact information for The Edge Communications is provided.



https://theedgemalaysia.com/node/721547 

 US rejects Vietnam's request to lift 'non-market economy' tag
==========

The Biden administration rejected Vietnam's request to be classified officially as a "market economy". Vietnam has been pressing for the status change since President Joe Biden's visit in September last year. The "non-market" economy label affects Vietnam in anti-dumping complaints. The US Commerce Department cited extensive government involvement in Vietnam's economy as the reason for the rejection. Vietnam has signed numerous free trade agreements and wants greater access to the US market. Changing Vietnam's market status has faced bipartisan Congressional push-back. Vietnam was removed from the US monitoring list for currency manipulation in 2022. Contact information for The Edge Communications is provided.



https://theedgemalaysia.com/node/721547 

 US national debt breaches record US$35 tril
==========

The US national debt breached US$35 trillion for the first time in history on July 29, 2024, according to data from the Treasury Department. This comes after surpassing the US$34 trillion mark in January 2024 and the US$33 trillion mark in September 2023. The national debt was around US$907 billion four decades ago. The largest budget item was Medicare/Medicaid at US$1.79 trillion.



https://theedgemalaysia.com/node/720866 

 Shutdowns may cost Bangladesh US$10b, industry group says
==========

Bangladesh's worst political violence since Prime Minister Sheikh Hasina extended her grip in power in January elections could cost the economy US$10 billion (RM46.38 billion), a major setback for the nation looking to shore up its foreign exchange reserves. The curfews and internet shutdown to quell a student protest over a government jobs quota is estimated to have a US$10 billion impact on the economy and costs are expected to climb further, according to Zaved Akhtar, president of the Foreign Investors' Chamber of Commerce and Industry (FCCI). Bangladesh is in a precarious position with its dwindling foreign exchange reserves, which means negotiations for more money with creditors and the International Monetary Fund will take on renewed urgency. The reserves have fallen to US$21.8 billion last month and the garments sector, a key earner of dollars, struggles to fully reopen. Bangladesh unblocked the mobile internet Sunday after 11 days of near-complete blackout and the authorities eased the curfew with longer daytime breaks to help businesses. However, security forces have arrested about 10,000 people in the past 12 days, raising concerns the crackdown will widen after the protests died down. Hasina has blamed the opposition for capitalizing on the student protests and carrying out militant-like attacks after the top court ruled to abolish most of the government jobs quota system. Amnesty International said the violence has left 200 people dead, while the home ministry put the initial death count at 147.



https://theedgemalaysia.com/node/720753 

 US 30-year fixed-rate mortgage edges up to 6.78%, Freddie Mac says
==========

The average rate on the US 30-year fixed-rate mortgage increased to 6.78% for the week ending July 25, according to Freddie Mac. This is slightly higher than the previous week's rate of 6.77%. However, it is still about half a percentage point below its peak earlier this year. Chief Economist Sam Khater noted that despite the lower rates, buyers are hesitant to enter the market, as reflected in declining new and existing home sales. Existing home sales fell 5.4% in June, marking the fourth consecutive monthly drop. Housing inventory has increased to the highest level in nearly four years, indicating a shift from a seller's market to a buyer's market. Rising home owners insurance premiums are also impacting housing affordability. However, economists expect home borrowing costs to decrease later this year as the Federal Reserve plans to cut interest rates.

#Mortgage #HousingMarket #InterestRates #HomeSales #FreddieMac

https://theedgemalaysia.com/node/720750 

 Yellen says US$3 tril needed annually for climate financing, far more than current level
==========

US Treasury Secretary Janet Yellen stated that the global transition to a low-carbon economy requires $3 trillion in new capital each year through 2050, far above current annual financing. Yellen emphasized that neglecting climate change and biodiversity loss is not just bad environmental policy but also bad economic policy. Wealthy economies provided and mobilized a record $116 billion for climate finance in 2022, with 40% coming from multilateral development banks (MDBs). Yellen called on MDBs to expand their missions and lending capacity to include fighting climate change and catalyze new business models to mobilize investments that support nature and biodiversity. Yellen also launched a new initiative with Amazon basin countries to combat nature crimes threatening biodiversity and the Amazon ecosystem.

#JanetYellen #ClimateFinancing #LowcarbonEconomy #NetzeroEmissions #BidenharrisAdministration #G20FinanceLeaders #MultilateralDevelopmentBanks #WorldBank #InteramericanDevelopmentBank #AmazonBasinCountries #NatureCrimes #Biodiversity #AmazonEcosystem

https://theedgemalaysia.com/node/720650 

 Italian PM Meloni on mission to mend ties with Xi ahead of US vote
==========

Italian Prime Minister Giorgia Meloni is heading to China for the first time since abandoning the Asian nation’s flagship investment pact; Meloni seeks to stabilize ties with Beijing ahead of a volatile US election; Meloni will meet President Xi Jinping and Premier Li Qiang during her visit; Meloni views Xi as someone who could become an important stakeholder in the Ukraine war if Washington were to pull support; Meloni has sought to pitch herself as a diplomat able to speak to leaders across the ideological spectrum; Meloni will need to balance her goal of strengthening ties with China with the EU’s tougher stance on trade toward Beijing; Meloni is expected to bring up Moscow’s invasion of Ukraine and the Israel-Hamas conflict during her talks with Chinese leaders; the EU has toughened its stance toward China, sometimes at the prodding of President Joe Biden; with Donald Trump leading polls in the US election, the EU will need to decide how to align itself between the world’s two largest economies; Meloni’s trip comes after Italy quit Xi’s Belt and Road infrastructure investment initiative; Meloni’s outreach can demonstrate to other European nations the benefits of enhancing cooperation with China; EVs are likely to be on the agenda, as the EU has moved forward to impose provisional tariffs on EVs made in China; China has threatened to retaliate if the EU moves ahead with the levies

#ItalianPrimeMinister #GiorgiaMeloni #China #UsElection #XiJinping #LiQiang #UkraineWar #Washington #DonaldTrump #Eu #TradeTensions #BeltAndRoadInitiative #Diplomacy #Evs #Tariffs

https://theedgemalaysia.com/node/720648 

 Yellen rejects Roubini claim of ‘manipulation’ in Treasuries
==========

US Treasury Secretary Janet Yellen firmly rejects economist Nouriel Roubini's accusation of Treasury securities manipulation; Yellen assures there is no such strategy and it has never been discussed; Roubini and co-author Stephen Miran estimate that the Treasury's move last fall lowered 10-year Treasury yields by a quarter of a percentage point; A senior Treasury official criticizes the Roubini paper, pointing out factual mistakes about the volume of Treasury bill issuance; Treasury official says the calculation of how much issuance was shifted out of coupon-bearing securities to bills was incorrect and misleading; Treasury official also says the number provided in the paper is based on outdated predictions from the Treasury Borrowing Advisory Committee (TBAC) and leaves out the second quarter of this year when tax revenue allowed the Treasury to pay down bills by about $300 billion; Yellen supports the Treasury's approach to debt issuance as outlined by Joshua Frost, the Treasury's assistant secretary for financial markets; Yellen's comments were made during an interview on the sidelines of a gathering of Group of 20 finance chiefs in Rio de Janeiro.



https://theedgemalaysia.com/node/720640 

 Treasuries rally as data points to a September rate cut
==========

Treasuries are rising as data suggests a September rate cut; Two- and 10-year yields down by about five basis points (bps) to 4.38% and 4.2%, respectively; US government debt on pace for a third-straight month of gains; Traders expect at least two quarter-point rate reductions this year; Lindsay Rosner of Goldman Sachs Asset Management believes a rate cut in September is likely; US inflation rose at a tame pace in June; US consumer sentiment eased in July to an eight-month low; Former New York Fed president William Dudley and Mohamed El-Erian have expressed opinions on rate cuts; Shorter-term Treasuries have led the rally, pushing the yield curve steeper; The yield curve is becoming less inverted; The steepener trade has gained momentum; Interest-rate swaps have priced in five quarter-point cuts in the next six policy meetings; Some investors are cautious about the bond rally and rate pricing;

#Treasuries #InterestRates #Inflation #FederalReserve #RateCut

https://theedgemalaysia.com/node/720633 

 The New Global Economy: The US needs a techno-industrial strategy
==========

China's economy is facing crises that could spell doom for its economic 'miracle'; US leadership in artificial intelligence (AI) is creating economic value and boosting productivity; US lacks production capacity in advanced industries crucial to competitiveness and national security; China has emerged as the world's manufacturing superpower; US must implement a techno-industrial strategy with three pillars: production, markets, and people; US must invest in manufacturing-innovation programs, secure supply chains, and invest in human capital; China's efforts to shift towards advanced industries threaten to surpass the US economically and gain a strategic advantage; US can leverage existing advantages to cement its leadership in the industries of the future.

#UsEconomy #ChinaEconomy #TechnoindustrialStrategy #AdvancedIndustries #ArtificialIntelligence #Manufacturing #SupplyChains #HumanCapital

https://theedgemalaysia.com/node/719828 

 The Trump trade misses $153 billion of munis pricing in tax risk
==========

A $153 billion pocket of the municipal-bond market is trading like a tax on all but the wealthiest Americans will return to bite the middle class. Trump-era tax cuts set to expire next year increased the exemptions on a tax for high-earning taxpayers known as the alternative minimum tax (AMT). Muni bonds subject to the tax trade at yields higher than tax-exempt securities. Concerns that a broader swath of investors will fall under the tax's umbrella have widened the gap in yields between AMT and non-AMT bonds. The Tax Cuts and Jobs Act (TCJA) reduced the number of filers subject to the AMT, but when it expires, 7.2 million taxpayers will be subject to the AMT starting in 2026. A Trump victory or a "Blue Wave" in the elections could result in the extension of the current AMT tax regime. Many separately managed account managers are avoiding AMT bonds, and AMT spreads have widened because ETFs and most mutual funds can't buy AMT bonds.



https://theedgemalaysia.com/node/720287 

 US goods trade deficit shrinks; new home sales extend decline
==========

The US trade deficit in goods narrowed in June for the first time this year; The goods trade gap contracted 2.5% to US$96.8 billion; Goods exports increased 2.5% to US$172.3 billion; Imports of goods gained 0.7% to US$269.2 billion; The housing market has been the sector hardest hit by the US central bank's aggressive monetary policy tightening; New home sales slipped 0.6% to a seasonally adjusted annual rate of 617,000 units in June; The median new house price dipped 0.1% to US$417,300 in June; The inventory of new homes rose in June to 476,000, the highest level since February 2008



https://theedgemalaysia.com/node/720293 

 Red Lobster moves closer to bankruptcy sale to lenders
==========

Red Lobster is moving closer to a bankruptcy sale that would put lenders, including Fortress Investment Group, in charge of the company after no other bidders stepped up with an offer to repay the struggling US restaurant chain's debt. Red Lobster filed for bankruptcy in Florida in May with about US$300 million in debt and a plan to close some restaurants and sell itself to its lenders or a higher bidder. The company had planned to conduct an auction on Tuesday, but it received no qualified bids. Without a better offer, Red Lobster will hand over its equity to its lenders in a debt-cancelation deal and continue to operate with fewer locations. Red Lobster entered bankruptcy with about 550 casual dining restaurants in the US and 54 restaurants in other countries. It posted a US$76 million net loss in 2023 and blamed its bankruptcy on high inflation, unsustainable rent costs, and poor management decisions including an "endless shrimp" promotion that caused US$11 million in losses.



https://theedgemalaysia.com/node/720130 

 Modi pledges US$24 bil for jobs, financial aid for allies
==========

India Prime Minister Narendra Modi pledges 2 trillion rupees (RM111.79 billion) for jobs and education; Finance Minister Nirmala Sitharaman announces employment-linked incentives for businesses; Modi allocates 150 billion rupees in financial aid to Telugu Desam Party; Modi needs to balance demands of coalition partners without increasing budget deficit; Government aims to lower deficit to raise India's credit ratings.

#India #NarendraModi #Budget #Employment #FinancialAid

https://theedgemalaysia.com/node/719994 

 G20 finance ministers meet to seek consensus before US election
==========

Finance ministers and central bankers from the Group of 20 (G20) are meeting this week in Rio de Janeiro to seek consensus on economic policy ahead of the US election. The G20 negotiators have agreed to avoid discussing the conflicts in Ukraine and Gaza to prevent them from dominating the talks. Brazil, the host of the meeting, hopes to shift the focus to economic cooperation on issues such as climate change and poverty. They also aim to gain support for a proposed global tax on the super-rich, which has already received backing from Belgium, Colombia, France, Spain, the African Union, and South Africa. The proposal calls for an annual 2% levy on fortunes exceeding US$1 billion, potentially raising up to US$250 billion per year from around 3,000 individuals. The G20 meeting in Rio is the last finance track meeting before the G20 summit in November, which coincides with the US elections.

#G20 #FinanceMinisters #UsElection #Ukraine #Gaza #EconomicPolicy #ClimateChange #Poverty #GlobalTax #Superrich

https://theedgemalaysia.com/node/719929 

 Dollar edges lower following Biden’s election exit
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The dollar slipped and Asian stocks fell after Joe Biden ended his reelection campaign and endorsed Vice President Kamala Harris; China’s central bank cut a key short-term interest rate; A Bloomberg gauge of the US currency’s strength fell 0.2% Monday after the US President bowed to pressure from the Democrats and pulled out of the November election race, while the Mexican peso climbed; Stocks opened lower in Japan and South Korea, adding to weakness in Australia; The People’s Bank of China said it will lower the seven-day reverse repo rate to 1.7% from 1.8%; Investors have mulled for weeks a greater prospect Trump will win the November election following Biden’s weak debate performance, only for bets on a Trump win to accelerate last week following an assassination attempt on the former president; The dollar rose for the first time in three weeks, while emerging market assets suffered amid fears of higher trade tariffs, increased US-China tensions and looser US fiscal policy; The question for investors is whether to stick with such trades now that Biden has dropped his bid for reelection; Markets may be jumpy as traders wait to see if Harris secures her party’s nomination and weigh if she can then gather enough momentum to challenge Trump’s lead in the polls; In commodities, oil and gold rose in early trading Monday; The S&P 500 dropped 0.7% on Friday to cap its worst week since April, while the Nasdaq 100 slumped about 1%; China’s one- and five-year loan prime rates are expected to remain unchanged later Monday as the nation’s central bank shrugs off anemic second-quarter growth; Elsewhere this week, traders will be focused on economic activity data in Europe, US second quarter growth and a slew of corporate earnings; Tesla Inc. and Alphabet Inc. will be the first of the “Magnificent Seven” to report earnings on Tuesday

#Dollar #AsianStocks #JoeBiden #KamalaHarris #China #UsElection

https://theedgemalaysia.com/node/719771 

 Trump welcomes China to build cars in US in departure from Biden
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Former president Donald Trump expresses openness for Chinese automakers to build cars in the US to boost the economy, signaling a departure from the Biden administration's approach. Trump mentions that large factories are being built in Mexico by China to make cars for the US market, but he wants those plants to be built in the US instead. He threatens to impose tariffs as high as 200% on each car to prevent them from entering the country. Trump's comments align with his previous remarks in March welcoming Chinese auto companies to build plants in the US. In contrast, Biden has scrutinized vehicles with links to China and has sought to exclude firms with Chinese government ownership from tax benefits. Both Trump and Biden want to appear tough on Beijing as they potentially face each other in the November election. Trump also vows to end an "electric vehicle mandate" on day one if he takes office.

#DonaldTrump #JoeBiden #UschinaTrade #Automakers #Tariffs #ChineseGovernment #ElectricVehicles

https://theedgemalaysia.com/node/719652 

 Chinese investors dump record amount of US stocks and bonds
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Chinese investors sold a record amount of US stocks and bonds in May, totaling $42.6 billion worth of long-term securities; Sales in the first five months of this year reached $79.7 billion, an all-time high for the January-May period; The sales were driven by risk reduction due to uncertainty around the US presidential election and possible political influence to reduce US dollar holdings; More than half of the sales were in Treasuries, followed by agency debt and stocks; China's holdings of Treasury notes and bonds have dropped $440 billion since the end of 2017; The prospects for Federal Reserve policy easing and a weaker dollar might discourage Chinese investors from holding too many dollar assets

#ChineseInvestors #UsStocks #UsBonds #Treasury #RiskReduction #UsPresidentialElection #PoliticalInfluence #Treasuries #AgencyDebt #Stocks #FederalReserve #WeakerDollar

https://theedgemalaysia.com/node/719614