China's trade with the United States collapse; Eurozone factories exceeded forecasts – companies in direct contact | Business

Factories in the euro area would have had better results in February if Germany had not been so painful.

On an annual basis, industrial production in the euro area was 0.3% lower than in February 2018. But in Germany, it decreased by 2% compared to the previous year.

Alastair Neame, chief economist of the CEBR think tank, blames the trade war between China and the United States for some of Germany's ills:

"While British industrial production has seen a near-term boost, due to the Brexit stockpile in February, industrial production in the euro area has fallen. As the global economy calms down and the United States continues to defend protectionism against trade, the outlook for the sector in Europe seems weak.

The slowdown in Chinese growth, the continued escalation of trade tensions with the United States, and the nervousness of Brexit clearly have an impact on manufacturers' order books.

Economists have welcomed the production figures of the euro area, more optimistic than today (showing only a 0.2% decline in production in February).

Aila Mihr of Search Danske more encouraging than the PMI reports (which showed that factory production was declining at its fastest pace in more than 6 years)

Claus Vistesen of Pantheon Economy accepts …. and also suggests that China's latest stimulus package could boost the global economy.

HSBC also holds an AGM today and takes the opportunity toShareholders, the trade war between the United States and China could continue to hurt the global economy this year.

President Mark Tucker said HSBC hoped Washington and Beijing could agree on a ceasefire (talks continued this month, without an agreement being reached).

In a timely warning, given today's trade numbersTucker says:

In today's environment, the global economy is much less predictable than a year ago.

Global growth is slowing, largely because of Europe's weakness, although the economic outlook is also less favorable in the United States and Asia.

The global trading system remains under political pressure and differences between China and the United States will likely continue to feed the public over the remainder of 2019.

We hope that the ongoing dialogue between Washington and Beijing will lead to a positive outcome.

In the meantime, we strive to help our clients overcome current uncertainties and make the most of the opportunities that undoubtedly exist.

In Spain, the banking giant Santander is criticized for hiring the banker Andrea Orcel.

Orcel was first attracted by UBS to become the next CEO of Santander, but the offer was withdrawn – apparently because Orcel asked for compensation for the bonuses he left behind. at UBS …..

My colleague Kalyeena Makortoff has the details:

A glimmer of hope is shining in the troubled factories sector in Europe.

According to Eurostat, industrial production in the euro area fell 0.2% in one month in February. It's not very impressive, but it's better than the expected -0.6%.

Eurostat explains:

In the euro area, in February 2019, compared with January 2019, energy production decreased by 3.0%, investment goods and consumer durables by 0.4% and energy intermediate goods by 0.1%, while the production of non-durable consumer goods increased by 0.9%. .

China's agricultural sector is badly hit by an outbreak of swine fever, which could force Beijing to order massive slaughter of pigs.

More than 100 cases of swine fever have been reported across the country in recent months, forcing tens of thousands of animals to be slaughtered and some farms to close.

The highly infectious disease (which kills pigs but does not harm humans) sharply raises pork prices. This is a major problem for Chinese citizens, in a country where half of the world's pigs are raised. Chinese inflation reached 2.3% in March, after 1.5% in February, under the effect of rising food prices.

The Dutch bank Rabobank predicted this morning that nearly 200 million pigs could be slaughtered or die as a result of the infection, with African swine fever spreading in China.

This could force China to import far more pork from overseas, driving prices up around the world. Some experts warn, however, that there is simply not enough pork in excess to fill the void.

Even UK consumers could be affected, the Daily Star tabloid estimates this week:

The resumption of Chinese credit growth is an encouraging sign for the global economy, says Ralf Preusser, global head of interest rate research at Merrill Lynch.

Says on Bloomberg TV, he explains that the rise in lending is more important than the recovery of exports (trade data are still disrupted by the lunar new year).

He suggests that Beijing's policy measures work, which should be reflected in other parts of the global economy. This should help the euro area, where factory production has slowed at the end of 2018.

Preusser says:

We now have three months of good credit growth figures …. it is finally an indication that the political measures taken are starting to bite.

It should also give us hope in Europe.

The latest figures on the Chinese money supply are also known and show a clear increase in the availability of credit as Beijing tried to stimulate growth.

Financial institutions offered 1.69 trillion yuan in new loans in March, more than the 1.225 trillion yuan forecast by economists.

The broad money supply M2 (essentially the amount of money in the system) increased by 8.6%, the fastest pace recorded since February 2018 according to Bloomberg.

According to financial experts, this shows that the People's Bank of China has tried to revive the economy, which also explains why the Chinese stock market has risen by 30% since the beginning of the year.

Looking at Chinese trade data, you can see that soybean imports have dropped by more than 14% this year.

Beijing imposed a 25% tariff on soybeans grown in the United States last year, in retaliation for President Trump's rights over Chinese products. This has hurt American farmers a lot, while Chinese companies have turned to rival suppliers such as Brazil.

Another sign of economic weakness, car sales in China fell 5.2% from one year to the next in March.

This follows a 13.8% drop in February, which means that car demand has declined since last summer.

Customs spokesman Li Kuiwen said at a press conference that China is forecasting slight growth in imports and exports in the current quarter (April to June), Reuters Reports.

China's total imports have been falling for four months, the Financial Times reports, a clear sign of economic tension.

The FT adds:

Julian Evans-Pritchard, Senior Economist for China's Capital Economics, warned that the turnaround [in March exports] was more likely the result of fading lunar new year holidays, which distorts official data in January and February.

He added that exports have not yet recovered after a net slowdown at the end of 2018.

"While a trade agreement between the United States and China seems more and more at hand, the reversal of US tariffs would only give a slight boost." exports of about 1 to 2%, "he said.

"With global growth expected to remain weak in the coming quarters, a strong rebound in exports seems unlikely."

Several experts are worried about the announcement of a further decline in Chinese imports in March, even as the Lunar New Year disruption should have ended.

The exorbitant tariffs imposed on US products will be a factor, of course, but they may also indicate that the Chinese economy is in trouble.

Current trade data also suggests that the United States is losing the trade war with China.

China's total trade with the United States has dropped 11 percent in the first three months of this year, the customs department reports.

This is mainly due to the 28% drop (!) US imports into China in the first quarter, in yuan terms. Exports to the United States fell 3.7% in the same quarter.

Just in March, US imports to China fell 21%, while Chinese exporters shipped 10.6% more back to American consumers.

Hello and welcome to our slippery coverage of the global economy, financial markets, the eurozone and businesses.

The Chinese economy is under the microscope today, while the world's second-largest economy is experiencing a further decline in imports and a strong recovery in exports.

Recently published figures show that Chinese imports fell 7.6% in March (in US dollars), much worse than the 1.3% decline announced by economists.

This suggests that its domestic economy remains weak in the face of the trade dispute with the United States, despite Beijing's efforts to stimulate demand.

Exports, however, are skyrocketing – up more than 14% year-on-yearbecause products made in China have always been proven around the world.

It means that China's trade surplus reached $ 32.64 billion in March – much bigger than expected.

A month ago, China announced a fall of 20% of its exports in February, the New Year trade being disrupted, the factory boss will be pleased to see the demand increase again.

China's exports rose by more than 21 percent in March, while imports fell by 1.3 percent.

The figures come as Beijing and Washington continue to negotiate a cease-fire as part of their trade war. Economists are now looking at the numbers, looking for new evidence of how the Chinese economy is doing well.

Also coming today

The City will analyze new data from euro area factories, which could indicate whether the slowdown in Europe continues, as well as the latest data on US consumer confidence.

L & # 39; s calendar

• 10 am BST: Industrial output of the euro area for February
• 13:45 BST: Peter Praet, ECB Chief Economist, speaks in Washington
• 3:00 pm (Paris time): University of Michigan survey on US consumer confidence