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JAPAN TRADE BALANCE

Japan’s weak trade data for January highlighted increasing external pressure on the
economy
, reinforcing the view that slowing exports will depress growth this year. There were some worrying signs in Wednesday’s data – slumping exports of chip-making equipment and mobile phone related products suggest supply-chain demand is weakening. That’s bad news for Japanese industry, a driver of the business cycle

ZEW EXPECTATIONS

Finance professionals surveyed by ZEW are slightly more upbeat about the future, but still expect the economy to tread water through the first half of the year. The economy should record a material expansion in 1Q, before accelerating a touch further in 2Q as the impact of temporary shocks fades

FED F.O.M.C.

FOMC meeting revealed that officials were in favour of a patient stance on interest rates

Minutes from the Fed’s January policy meeting revealed that most policymakers wanted to end its balance sheet runofflater this year”, with an action plan expected to be released soon

The minutes also showed that policymakers were in favour of putting interest rates on hold, with several saying further increases would only be needed if inflation accelerated faster than expected

Risks to the downside were seen to have increased, noting deceleration of economic growth in China and Europe

PMI MANUFACTURING

From Japan to Germany, from economic numbers to profit warnings, there’s no shortage of evidence that the world is feeling the pain of a slump in trade

In Asia, South Korea and Japan reported declines in exports, while European powerhouse Germany is seeing manufacturing shrink the most in six years

source: Bloomberg

Important News

  • The risk of President Trump imposing auto tariffs on the European Union is still present should a trade deal not be reached between the two sides. Trump said that the EU were proving tough to make a deal with and ‘if we don’ make a deal, we’ll do the tariffs’
  • Prime Minister Theresa May is on Wednesday travelling to Brussels to meet with the head of the European Commission to try and reach an agreement that might break the impasse in the House of Commons
  • Maersk said that profit will fall short of expectations, and Chief Executive Soren Skou said the outlook for this year is bleaker

source: Bloomberg and EFG AM

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