Friday, June 22 2018 | ASIA TODAY INTERNATIONAL - Reporting the Business that Matters in Asia
Updated: 2 hours 24 min ago
Domestic sources of financing supported the non-financial private sector. Housing prices rose by 8.7% in the first quarter of 2018. The prospect of a long drawn-out renegotiation of NAFTA leads to negative differentiation of domestic assets. Incorporation of new rating agencies. Banco de México: consultation on subordinated bonds.
The digital revolution is leading to an increased use of electronic payment instruments; however, cash is still used in 79% of retail payments. This note analyses the factors driving the use of cash for payments across EU countries classified in four categories: access to cash and banking products, degree of digitalisation, macroeconomic environment and cultural factors.
Portugal’s GDP grew by 0.4% QoQ in 1Q18, 0.3 pp less than the growth seen in the previous quarter and that forecast by BBVA Research. Domestic demand continues to grow strongly, in contrast with the recent weakness seen in exports, which have been affected by the reduced thrust of the euro zone economy. BBVA Research estimates that growth in 2Q18 will be around 0.3% QoQ.
Incoming data reaffirms our baseline scenario of moderate to high GDP growth and higher inflation in 2018 & 2019. Federal Reserve poised to raise rates twice in the second half of the year and possibly three times in 2019. We continue to expect above average growth in employment which will push the unemployment rate to 3.6% by 2019.
Global growth remains on a strong footing at the beginning of 2Q18 despite the high levels of uncertainty, especially coming from trade news. Hard data and sentiment indicators remain solid but with growing differences across areas. Inflation surged in advanced economies on higher commodity prices while monetary policy normalization continues.
A deterioration of inflation risks tips the balance towards a hike
Growth is expected to be around 0.8% in 2Q and the BBVA Research forecast for 2018 remains unchanged (2.9%), although there are still biases. On the one hand, the approval of the PGE18 suggests a more expansive fiscal policy. On the other hand, external uncertainty still persists and, in Spain, the relative one to economic policy has increased.
Amid the growing uncertainty of the global economic scenario, stemming from the potential escalation of tariff increases initiated by the US, the main central banks have launched a crystal-clear message this week: monetary policies are entering a new phase.
The US’ decision, just hours after the G7 summit, not to support its closing joint communiqué reaffirming the need for regulated, open multilateral global trade, may have come as a surprise to many, but it was not really surprising.
EBA issues consultation and opinion regarding SCA and CSC under PSD2. SRB receives final Valuation 3 report on resolution of Banco Popular. BdE adopts a series of guidelines issued by EBA. BoE publishes several policy statements on resolution and MREL. Finally, FRB publishes final rule on limits to concentration risks.
The Asset Purchase Programme will end in December 2018. However, interest rates will remain on hold at least until the summer 2019, later than expected. Macro projections were revised in line with expectations: GDP down in 2018 to 2.1% and inflation up in 2018 and 2019 to 1.7%.
May economic indicators are announced today, together with the previously released credit data, point to an expected moderation in growth. In particular, all indicators dropped from the previous readings and the market expectations. This suggests that headwinds are weighing on growth, mainly from domestic tightening policy and the unsettled trade skirmishes.
USA, EU and China are the main nodes of the world trade network. 1980-2008 was the most recent period of high dynamism of trade boosted by EM growth, technological and logistic advances and, last but not least, enhanced multilateralism approach. The globalization challenge is to reach a more even distribution of its benefits and protectionism is the wrong policy.
China announced a plan of furthering its long-delayed financial opening to remove restrictions on foreign shareholdings and expand market access. A new round of capital account liberalization also brings more opportunities for two-way capital flows. This watch examines how these new measures can help foreign financial institutions to grow in China and their implications.