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Weekly News Summary for August 9-15, 2019

Friday,  August 9: Weak Chinese, UK Economy Renews Slowdown Concerns

Concerns over a potential global recession rose once again on Friday after the world’s second and fifth-largest economy revealed weaker performance.

China’s producer price index contracted by 0.3% for the first since August 2016 in July, while the UK’s output dropped by 0.2% in the second quarter, to mark its worst performance since 2012, and leading the British pound to a fresh 31-month low against the US dollar.

Monday, August 12: US Futures Decline as Hong Kong Unrest Continues

US futures pared gains on Monday, extending last week’s slump, due to the ongoing unrest in Hong Kong, which raised worries over the possibility that China will have to use force to restore order.

The Dow left the $26,000 level, losing 391 points to $25,896.44, while the S&P 500 fell by 35.96 points to $2,882.70 and the Nasdaq Composite index declined by 95.73 points to $7,863.41.

Tuesday, August 13: Safe-haven Assets Rise as Investors Flee from Risk

The gold and Japanese yen stood on the green territory on Tuesday, as investors kept their distance from riskier assets.

The precious metal strengthened further to register a new 6-year high, while the upcoming US inflation data pushed the yen close to a 7-month peak.

Wednesday, August 14: China, Germany Data Adds to Global Slump Worries

The gloomy outlook of the world economy dimmed further on Wednesday, as the latest data from China and Germany provided no relief.

With the trade war weighing on China’s business and consumers, the country’s industrial sector was down by 4.8% in the previous month to mark as its weakest since February 2002, while a decline in Germany’s exports left its GDP with a quarter-on-quarter decline of 0.1%.

Thursday, August 15: Bond Markets Closely Watch after Yield Curve Drop

Focus on bond markets are expected to continue on Thursday in what has become a repeated matter this week, after the US 10-year/2-year Treasury yield curve inverted for the first time in 12 years, signaling risk of a recession.

Disappointing economic reports from China and Germany led the 10-year Treasury note to momentarily fall below the 2-year yield on Wednesday, although it remains a few basis points away from triggering another inversion.

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