EU-US Trade War: A flood of new data from the US and eurozone suggests recession risks are flashing red. Here's a full rundown of the wreckage - by Ben Winck

Key economic metrics are flashing red for the US and the European Union as tensions between the two reach new highs.

The latest readings from prominent purchasing managers' indexes show manufacturing sectors the US and EU struggling amid global trade conflict and slowing economies. Service and non-manufacturing industries also slowed through September in both areas.

The negative signs arrive after the WTO granted the US permission to levy $7.5 billion in tariffs on EU imports, specifically targeting Boeing competitor Airbus.

Further escalation of trade conflict between the bloc and the US could plunge the two economies into deeper economic woes.

Read more at: A flood of new data from the US and eurozone suggests recession risks are flashing red. Here's a full rundown of the wreckage. | Markets Insider

EUROPEAN Central Bank: Rates to remain unchanged despite weakening economy

ECB to keep rates unchanged amid weakening economy European Central Bank policymakers on Thursday responded boldly to fears of a eurozone slowdown by announcing that interest rates would stay unchanged for the rest of the year and launching a fresh round of super-cheap loans to banks.

 

Read more at: 

http://www.france24.com/en/20190307-european-central-bank-ecb-interest-rates-growth

EU Economy: Italy, Germany Drag on Euro-Area Economy as EU Cuts Outlook - by Viktoria Dendrinou

The European Commission slashed its growth forecasts for all the euro region’s major economies from Germany to Italy and warned that Brexit and the slowdown in China threaten to make the outlook even worse.

The European Union’s executive arm delivered a downbeat report on Thursday that shaved a whole percentage point off its 2019 projection for Italy, now seen with minimal expansion of just 0.2 percent for the whole year. Officials in Brussels warned that the region’s outlook faces “substantial” risks.

The gloomier forecasts reflect more pronounced weakness in the region, which stumbled at the end of 2018 as political instability continued to rock Italy, violent protests in France depressed output, and Germany’s car industry struggled to rebound from changes in regulation. Global trade uncertainty and a sharper-than-expected slowdown in China also pose external risks to the economic outlook.

Read more at: Italy, Germany Drag on Euro-Area Economy as EU Cuts Outlook - Bloomberg

EU Economy: British economic growth tipped to be slowest in Europe next year, but rest of European Economies also slowing down - by Richard Partington

The euro area of 19 countries including Germany, France and Italy is forecast to slow from a growth rate of 2.1% this year to 1.9% in 2019 and 1.7% in 2020, as the wider region enters a period of weaker growth following the strongest year of the past decade in 2017.

It comes as the wider global economy is unsettled by Donald Trump’s trade disputes with China and Europe, which have reduced demand for manufactured goods and stifled business investment.

Despite the weaker outlook for the British economy, growth figures have shown Britain managing a better performance than the eurozone over recent quarters.

Statistics due on Friday are expected to show UK economic growth of 0.6% for the third quarter. Economists at HSBC believe Germany is likely to record its first drop in quarterly economic output, of 0.1%, for more than three years.

In the IMF’s latest health check on the region, it warned the European economy would probably run into turbulence in the next few years.

The Washington-based fund said all likely Brexit outcomes would have a negative cost for the economy, although it warned a no-deal scenario would have the biggest downsides.

“No-deal Brexit would lead to high trade and non-trade barriers between the UK and the rest of the EU, with negative consequences for growth,” it said.

The IMF also warned the populist Italian government to tackle its high levels of government borrowing before time runs out.

Read more: British economic growth tipped to be slowest in Europe next year | Business | The Guardian

Turkey: Turkish manufacturing activity shrinks for fifth straight month in August

Turkish manufacturing activity contracted for the fifth consecutive month in August as output and new orders slowed down on the back of a currency crisis, a business survey showed on Sept. 3.

The manufacturing Purchasing Managers’ Index (PMI) fell to 46.4 from 49 a month earlier, remaining under the 50-point line that separates expansion from contraction, a panel from the Istanbul Chamber of Industry and IHS Markit said.

The result was driven by a slowdown in output and new orders, the panel said.

The decline in the lira - which has lost around 40 percent of its value this year - was central to challenging business conditions and contributed to increasing inflationary pressures, with input and output costs increasing to the greatest extent since the survey began in 2005, it said.

 Read more: Turkish manufacturing activity shrinks for fifth straight month in August

US Economy: IMF downgrades outlook for U.S. economy, urges Fed to delay rate hike

The International Monetary Fund urged the Federal Reserve to wait until the first half of 2016 to start raising short-term interest rates because the U.S. economy remains subpar.

In its annual checkup of the U.S. economy released Thursday, the IMF said "the underpinnings for continued growth and job creation remain in place." But America's "momentum was sapped in recent months by a series of negative shocks," including a harsh winter and a strong dollar that hurts U.S. exports.

The IMF predicted the U.S. economy will grow 2.5 per cent this year, down from its April forecast of 3.1 per cent.

The agency said the Fed should wait for more signs of improvement -- specifically "greater signs of wage or price inflation." The central bank has kept its key benchmark rate at a record low near zero since December 2008.

Barring unexpected good news, the IMF said the Fed should probably hold off until next year.

Read more: IMF downgrades outlook for U.S. economy, urges Fed to delay rate hike | CTV News

US - Canada - Economy: Anemic Economic Figures For US And Canada blamed on Severe Winter

U.S. growth is expected to come in at around 1.7 per cent for the January to March period. In Canada, the number is even bleaker — a mere 0.5 per cent. Both figures are well behind growth rates seen elsewhere in the developed world.

The average growth rate across G7 countries is expected to be 2.2 per cent.

"The United States and Canada are both also expected to experience an uneven pattern of growth in the near term, owing in part to the disruptive effect of repeated episodes of severe winter weather," the think-tank said.

"A number of activities were restrained by the storms and cold temperatures, which is likely to depress first-quarter GDP, with some bounceback effect in the second quarter in the absence of further negative shocks."

But the slowdown, even in chilly North America, will be temporary, the OECD says, after winter eventually releases its icy grip. Canada's economy will expand by 2.4 per cent in the spring quarter, the OECD predicts.

In almost all economies, consensus forecasts for 2014 have ratcheted up over the last few months.

The North American slowdown actually started in the last quarter of 2013, as the U.S. government shutdown caused economic activity overall to be slower than it would have been otherwise.

Economy will rebound after rough winter, OECD says - Business - CBC News

French Economy: Is France Heading South? - by Jeanne Park

Despite French president François Hollande's recent declaration that a recovery is under way, many policymakers continue to regard the country's troubled economy, the second-largest in the eurozone, as a growing liability for the troubled currency union. For Dominique Moïsi, special adviser at the French Institute for International Relations, the question is whether France has fundamentally shifted away from healthier countries in the North of Europe "and moved in the direction of its Southern European neighbors."

He describes Hollande as a moderate constrained from pursuing bold reforms by both his political left and eurozone requirements. Regarding nascent EU-U.S. free trade talks, he defends France's insistence on cultural exception, but believes that "the Asian challenge should force us to go beyond our differences."

Read more: Is France Heading South? - Council on Foreign Relations

Global Economy: China and Japan Show Signs of Economic Stress -by Bettina Wassener

 The two biggest economies in Asia showed signs of stress on Thursday, with economic data on China highlighting the fragility of the recovery in that country and a sudden 7.3 percent plunge in the Japanese stock market underlining worries about whether the government’s efforts to reignite growth will bear fruit in the long term.

Stock markets fell across the region, in part because of disappointment over a closely watched purchasing managers’ index from China that offered the latest evidence that the Chinese economy is unlikely to pick up steam again any time soon. 

Released by the British bank HSBC and compiled by the research firm Markit, the index slipped from 50.4 points in April to 49.6 points in May, the first time in seven months that it came in below the level of 50, which separates contraction from expansion. 

“The cooling manufacturing activities in May reflected slower domestic demand and ongoing external headwinds,” Qu Hongbin, chief China economist at HSBC, said in a note accompanying the data release, adding that a likely slowdown this quarter cast a shadow over China’s fragile recovery.

Read more: China and Japan Show Signs of Economic Stress - NYTimes.com

Russia: Official sees high risks of slower econ growth in Russia early ‘13

Risks of slower economic growth will remain high in Russia at the end of 2012 and the beginning of 2013, Deputy Economic Development Minister Andrei Klepach said on Tuesday.

“A more urgent problem now is the problem of economic growth,” Klepach said when asked about the balance between risks of economic slowdown and inflation.

He also said that a reduction of the refinancing rate by the central bank will not significantly spur growth. In early November, the Central Bank of Russia kept the refinancing rate unchanged at 8.25%.
Inflation risks will also remain in the beginning of 2013. “But so far they are under control (and will remain so) if there is no further growth in world food prices,” Klepach.

For more: Russia: Official sees high risks of slower econ growth in Russia early ‘13

Global Economy in Worst Shape Since 2009 - by Paul Wiseman

Mounting fears about Spain's financial health help illustrate why the global economy is in its worst shape since 2009.

Six of the 17 countries that use the euro currency are in recession. The U.S. economy is struggling again. And the economic superstars of the developing world — China, India and Brazil — are in no position to come to the rescue. They're slowing, too.

The lengthening shadow over the world's economy illustrates one of the consequences of globalization: There's nowhere to hide.

Read more: Global Economy in Worst Shape Since 2009 - US News and World Report