Posts tagged 'World Trade'

There is a war for capital coming, says UBS

Paul Donovan’s team at UBS was one of the first to highlight the recent trend towards deglobalisation, but also how the phenomenon links into the capital flow reversal story.

It’s a big deal. We think. (So much so, we’re planning a dedicated panel on the topic at this summer’s Camp Alphaville, so do watch this space).

The trend, in any case, is certainly not subsiding (as yet). On Thursday, Donovan and co. were back with a note explaining why.

There make three core observations: Read more

Current account imbalances since the crisis

The chart is from a recent Barclays report on global trade. Read more

Japanese exports not hurt so much by islands dispute as general global malaise

So far, the dispute with China over the Senkaku/Diaoyu islands doesn’t seem to have hurt Japan’s exports to China as much as the headlines might suggest. True, as Dow Jones points out, exports to China were 14.1 per cent lower than in September 2011. However Nomura’s fixed income strategists Naokazu Koshimizu and Asuka Tsuchida note that exports to China actually rose 0.5 per cent compared to August, “suggesting to us little sign of an impact from anti Japan protests in September”. Read more

A pause in export-led growth?

China’s official manufacturing PMI figure was reported at 49.8 for September, an increase from 49.2 in August. Meanwhile, on Saturday the HSBC/Markit Economics PMI was 47.9, confirming the 11th month of contraction — the longest in the survey’s history.

Some China economists have welcomed the official PMI coming within a whisker of 50, but we don’t see a lot to be excited about — it seems indicate little, apart from support for a “new normal” in Chinese growth. The components of the main figure all improved, including the important “new orders” and “new export orders” numbers. However, employment fell slightly to 48.9 from 49.1. Read more

US to level playing field by targeting state subsides in trade deals

The US government is attempting to level the playing field between private firms and state-owned enterprises as it seeks to negotiation need trade deals, reports the WSJ. Officials are currently in Peru for discussions to create a free-trade pact dubbed the “Trans-Pacific Partnership” which would include the US, Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam. After a US congressional panel, the China Economic and Security Review Commission, reported that 50 per cent of China’s GDP is generated by state-owned entities in the country that benefit from various subsidies, officials have moved to link fair competition requirements into new trade deals. State-sponsored firms, when bidding for new business, would be required to act on a commercial basis. There are also proposed limits for subsides. An outline of the Trans-Pacific Partnership is expected to be unveiled at the leaders summit of the Asia-Pacific Economic Cooperation forum on November 12th.

Doubts rise over export-led recovery

Around half of America’s climb out of recession since 2009 has come from exports — but now the markets for those exports are becoming shaky, the WSJ reports. JPMorgan analysts lowered their US growth forecasts to 3.4 per cent from 4 per cent on Friday, following shocks to the Japanese economy and oil prices. Executives at companies such as Adobe have already noted a hit from Japan’s earthquake by lowering revenue forecasts for the latest quarter. Elsewhere in the supply chain, trade-focused companies are postponing orders. Overshadowing the most recent shocks is the recession’s huge impact on world trade. FT Alphaville notes a new Fed paper which estimates that global trade volumes fell by 19 per cent during the crisis.

A very special collapse in world trade

How big the fall in world trade in 2008/2009?

THIS big: Read more

Global trade rises back to pre-crisis levels

World trade has regained the levels it reached before the financial crisis, driven by rapidly rising emerging-market exports and im­ports, research suggests, the FT says. A monthly measure of trade compiled by the Bureau for Economic Policy Analysis, a Dutch research institute, shows that the volume of world goods traded surged by 15.1 per cent last year after contracting by 13 per cent in 2009. Strong December data capped robust growth in the fourth quarter. Trade imbalances, which shrank during the crisis, have started opening again as import demand from rich nations has recovered.

US and China have issues far beyond renminbi

It’s not just the trade balance, the NYT’s Economix notes — economic imbalances between the US and China extend to capital subsidies to different industries and beyond, making the problem a thorny one. At the same time, Chinese premier Wen Jiabao’s recent argument that renminbi appreciation would threaten the margins of China’s exporters is unconvincing, FT beyondbrics argues, suggesting that an increase in the currency’s value against the dollar would do little harm at least. In the longer term, China’s threat to the US isn’t that its goods are too cheap, but that Chinese companies are moving up the value chain towards throwing off their US rivals, says Fareed Zakaria in Time. This stand-off feels like it has gone on forever, the FT reports — and there is unlikely to be a rapid conclusion.

Sharp upturn in use of shipping containers

The use of shipping containers, a barometer of the global economy, has risen sharply this year, surpassing even the record levels of 2008, reports the FT. Two of the most important companies in container trade – Denmark’s AP Møller-Maersk and Dubai’s DP World – on Wednesday reported further evidence of the recovery in the trade in the boxes that carry the world’s manufactured goods. The upturn, boosted by traffic of goods to and from emerging economies, has been so strong that analysts say that it has caught many by surprise.

Sunny side up

It’s a brave man who stands up for bullishness in this climate, FT Alphaville — but here’s another case for optimism, this time based on global macro conditions, including the prospects for an export-led recovery in Europe. Read more

Recovery, OECD style (Germany not included)

Here’s some nice big-picture graphs to pore over on Thursday, courtesy of the OECD’s interim assessment of the recovery in developed economies.

Well, perhaps not so nice for Germany. Read more

The financial world, one node at a time

Proving it’s a small world after all (really) – at least according to a just-published Bank of England working paper.

The paper looks at bilateral external balance sheet data, from 1980 to 2005, for a group of 18 countries. The idea is to find linkages between the territories, and across asset classes. Read more

The erstwhile openess of emerging markets, chart du jour

Courtesy of Moody’s, a reminder of the financial crisis’ impact on emerging economies:

Related link:
Blowing emerging bubbles
– FT Alphaville

Neptune Orient to cut capacity; World trade growth slows

Singapore’s Neptune Orient Lines is to slash capacity on the most important trade routes in what is expected to be the first of many responses by container shipping lines to rapidly slowing demand. NOL, the number seven container line, is making the cuts in conjunction with the other members of the New World shipping alliance. Container shipping lines have been hit by the economic slowdown because their main cargo is consumer goods bound for Europe and North America. Seperately, a monthly measure of world trade found the volume of goods was unchanged in August after 2.5 per cent growth in July.