FITCH: A China hard landing is still the 'key global risk'
In a new report which says that a “China hard landing remains (the) key risk to global growth” Fitch highlights that “the considerable challenges China faces in this transition are clouding the medium-to-long term growth outlook.”
They say a hard landing is not their base case but risks remain:
A hard landing has never been Fitch’s core scenario. That said, the dilemma China’s authorities face between structural reforms and managing the pace of the slowdown is sharpening as vulnerabilities in the economy remain.
Imbalances in the economy, ranging from significant oversupply in certain corporate sectors, the potential of a large build-up in bad loans in the banking sector and the outsized role of capital investments in the economy, each has the potential to trigger a sharp deterioration in macroeconomic and financial conditions in China and elsewhere.
Dollar drops sharply versus yen as investors cash in on recent gains
The dollar was sharply lower against the yen during Asian trade Wednesday, hurt by profit-taking after the greenback’s recent strength.
The U.S. currency USDJPY, -0.47% tumbled to as low as ¥108.60 in the late morning trade in Tokyo, before stabilizing at¥108.68. That compared with ¥109.39 late Tuesday in New York.
The greenback gathered downward momentum against the yen as investors opted to lock in profits. The U.S. currency gained roughly 2% against the yen in the last couple of days after Japanese currency authorities’ repeated verbal warnings against the yen’s strength
The yen also strengthened against the euro EURJPY, -0.31% as the common currency fell to ¥123.75 from ¥124.23 late Tuesday. The U.K. pound GBPJPY, -0.38% dropped to ¥157.18 from ¥157.80, while the Australian dollar AUDJPY, -0.51% dropped to ¥80.07 from ¥80.45.
WTI oil prices fall more than 1% on bets for bearish supply data
West Texas Intermediate oil prices fell in European trade on Wednesday, after rising sharply overnight, amid speculation weekly supply data due later in the session will show U.S. crude inventories rose at a faster pace than expected last week.
The U.S. Energy Information Administration will release its weekly report on oil supplies at 14:30GMT, or 10:30AM ET, amid expectations for a gain of 0.7 million barrels.
Crude oil for June delivery on the New York Mercantile Exchange shed 63 cents, or 1.41%, to trade at $44.03 a barrel by07:58GMT, or 3:58AM ET.
Reference: Business Insider, MarketWatch, Investin
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