· The U.S. dollar gained against a basket of currencies to its highest levels in 2-1/2 weeks on Friday after data showed that U.S. job growth rebounded strongly in June.
Non-farm payrolls increased by 224,000 jobs last month, the most in five months, and more than the 160,000 jobs forecast by economists. It came after job growth slowed sharply in May.
The dollar index against a basket of six major currencies was last at 97.261, the highest since June 19 and up 0.51% on the day.
Moderate wage gains, however, added to evidence that the economy is slowing while the increase in jobs was also not enough to offset weakness in May.
Average hourly earnings rose six cents or 0.2% after gaining 0.3% in May. That kept the annual increase in wages at 3.1% for a second straight month.
The euro EUR=D3 was flat at $1.1226, not far from a 2-1/2-week low of $1.1205 touched on Friday.
· A global escalation of the China-US trade war could cost nearly $1.5 trillion in lost trade by the end of 2020, according to Atradius, a global credit insurance provider with a strategic presence in over 50 countries.
That is the equivalent of all Japanese exports grinding to a halt for two years, in the case of Hong Kong for three years and if you are located in Singapore it would mean no exports for a whopping four years, the financial expert said in its report.
· Trade policy uncertainty is forecast to contribute to an increase in the number of corporate insolvencies in advanced markets, after nearly a decade of sizeable annual improvements.
In the case of a severe intensification of the trade war, trade growth could grind to a halt this year, driving growth in corporate insolvencies much higher than the 2% rise currently expected, it stated.
The application of increasingly stringent protectionist measures, particularly in trade between the US and China, is forecast to have negative effects on other economies as well, in particular the main trade partners of the eastern giant, such as Japan, Taiwan, Vietnam and South Korea, where exports to China have slumped by 10 to 20%.
On the flipside, some trade from these economies is being diverted from China to the US, said the expert.
· Vietnam is seizing an unprecedented opportunity arising from a wave of production and export orders as the trade row between China and the US diverts business to the Southeast Asian country, but looming concerns persist, entrepreneurs and experts told the Global Times.
Shipments from Vietnam to the US surged nearly 40 percent year-on-year in the first four months of 2019, while imports from China over the same period fell 13 percent, according to the Financial Times on June 28.
Separately, Japanese investment bank Nomura said in a June report that Vietnam is the largest beneficiary of the China-US trade war gaining new business worth 7.9 percent of its GDP.
In 2018, Vietnam's GDP was an estimated $241.3 billion with a population of 95 million, according to the IMF.
· ASEAN manufacturing centers such as Vietnam, Malaysia and Thailand are likely to benefit from some diversion of export orders as well as stronger foreign direct investment flows over the medium term as multinationals diversify their global supply chains away from China, said an economic study by IHS Markit.
· France’s central bank governor told CNBC Saturday that monetary policy cannot compensate for trade tensions, and political leaders need to act in order to fend off today’s economic threats.
Speaking to CNBC’s Annette Weisbach at an economic conference in Aix-en-Provence in southern France, François Villeroy de Galhau underlined that the main threat to global growth at present is uncertainty.
“And let us be clear, uncertainty created by trade tensions,” Villeroy de Galhau, who is also a member of the Governing Council at the European Central Bank (ECB), said.
“So the priority is to reduce this uncertainty and here we will do our duty as central bankers, but monetary policy cannot do everything. Monetary policy has no magic wand, it cannot make miracles. And it’s up to political leaders to reduce these uncertainties, sometimes self-created,” he added.
· The European Central Bank (ECB) will decide its next policy moves based on incoming economic data and not financial market swings, ECB policymaker Francois Villeroy de Galhau said in an interview released on Monday.
· British companies are more worried about Brexit than at any time since the 2016 referendum decision to leave the European Union and they plan to reduce investment and hiring, a survey of chief financial officers showed on Monday.
The survey conducted by Deloitte, a financial advisory firm, found that 83% of the CFOs believed that leaving the EU would hurt Britain’s long-term business environment.
Almost two thirds of the CFOs surveyed by Deloitte expected to cut hiring in the next three years as a result of Brexit and 47%expected to reduce capital spending.
Separately on Monday, the Confederation of British Industry, an employers group, said it expected business investment would fall by1.3% in 2019, the biggest decline since the financial crisis, even if Britain manages to avoid a no-deal Brexit.
· Turkish President Recep Tayyip Erdogan has fired the governor of the central bank and replaced him with his deputy.
No official reason was given for the sacking of Murat Cetinkaya, who had held the position since April 2016.
However, it comes amid reports of disagreements over interest rates, which the government wants to lower in a bid to boost economic growth.
The central bank in September instead increased its benchmark interest rate from 17.5% to 24%, saying that doing so would help to battle inflation and boost the lira.
· Oil prices climbed on Friday, supported by tensions over Iran and a decision by OPEC and its allies to extend an output supply cut deal until next year, but mixed economic data limited the rally.
Brent was up 86 cents, or 1.4%, to $64.16 a barrel. U.S. West Texas Intermediate (WTI) gained 17 cents, or 0.3%, to settle at$57.51 a barrel. The U.S. market was closed on Thursday for a national holiday, and WTI trade volumes remained light on Friday.
Both benchmarks were set to record weekly losses as concerns about a slowing global economy outweighed risks to supply.
Reference: CNBC, Reuters, BBC
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