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Moody’s warns of global shockwaves from China slowdown - business live

Discussion in 'Market News' started by Lily, Nov 10, 2015.

  1. Lily

    Lily Forum Member

    Aug 29, 2015
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    All the day’s financial news, as rating agency warns that world economic growth will be hampered by emerging market problems

    Moody’s: Expect weak global growth until 2017

    8.47am GMT

    A new Chinese inflation report has also send alarm bells ringing this morning.

    China’s consumer prices index rose by just 1.3% annually last month, which is the lowest level since May. That’s another sign that demand is weakening.

    Related: Asia Pacific stock markets continue slide as Chinese inflation weakens

    8.43am GMT

    The copper price highlights why Moody’s is right to be worried about China.

    It is hovering around a six-year low today, after trade data released on Sunday showed sharp fall in Chinese imports and exports.

    Copper Sinks to Six-Year Low as Chinese Demand Slumps - https://t.co/TbXYQO1Bg4 pic.twitter.com/RlJgPdOt0L

    8.38am GMT

    There are some minor shockwaves in the bond markets too, as left-wing parties prepare to take power in Portugal (as explained in the intro).

    Portuguese 10-year bonds have hit a new four-month low this morning;, with investors worrying that a new anti-austerity government will soon be pulling the levers in Lisbon.

    #Portugal bond rout continues as Portuguese Premier set to be ousted as Socialists eye power https://t.co/gDech0c0eA pic.twitter.com/DXJtN26aN3

    8.31am GMT

    London financial newspaper City AM is alarmed by Moody’s warning:

    8.27am GMT

    China’s slowdown also means that commodity prices are unlikely to rebound, after slumping to multi-year lows in 2015.

    Moody’s says:

    A large inventory build-up, a slow supply response and muted demand from China and other key importers will all weigh on prices.

    Moody's says #commodity prices are unlikely to rise significantly in the next few years

    As well as weaker commodity prices, a range of country-specific factors will contribute to lower growth in emerging markets and could lead investors to reassess growth and return prospects in some countries.

    For example, political uncertainty will be a negative factor in Brazil and Russia and infrastructure shortages will hamper growth in South Africa.

    8.24am GMT

    Escalating problems in emerging markets such as China will hold back world growth over the next two years, and could even threaten the stability of the global economy.

    That’s the crux of a new report from Moody’s this morning.

    “Muted global economic growth will not support a significant reduction in government debt or allow central banks to raise interest rates markedly.”

    “Authorities lack the large fiscal and conventional monetary policy buffers to protect their economies from potential shocks.”

    The main risks to the economic outlook would stem from a bigger than expected global fallout from the Chinese slowdown and a larger impact from tighter external and domestic financing conditions in other emerging markets.

    7.57am GMT

    Good morning, and welcome to our rolling coverage of the world economy, the financial market, the eurozone and business.

    Crucial vote in #Portugal's parliament on PM Passos Coelho government program. Will the splintered left parties unite in no confidence vote?

    Agenda highlights of today's #ECOFIN Council: https://t.co/JI3kTKYlM5. #CapitalMarketsUnion #SRM #EMU #BankingUnion #COP21

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