China's measures to support the property sector are lowering monthly mortgage payments for homeowners but also reducing interest earnings on bank deposits, highlighting the challenge of promoting consumer spending in a weak economic climate.
Despite the fear of disruption, America's corporate giants have remained secure and have experienced little competitive disruption, with factors such as inertia, regulatory advantages, and the ability to adapt to digital technologies contributing to their endurance.
The US, Saudi Arabia, India, and other nations are discussing a potential infrastructure deal to enhance trade between the Gulf and South Asia through railways and ports, in an effort to counter China's Belt and Road initiative.
Evergrande Group, the highly indebted Chinese real estate developer, has reported a narrower net loss for the first half of the year thanks to a rise in revenue driven by the property market's short-term boom, despite the company facing financial struggles and applying for bankruptcy in the US.
Analysts predict that Saudi Arabia may face an economic contraction in 2023 due to its decision to extend crude production cuts, highlighting the nation's heavy reliance on oil, while a large dividend from Saudi Aramco may provide some cushion for public finances.
US mortgage rates reached their highest level since 2001, with the 30-year fixed-rate mortgage averaging 7.23%, as indications of ongoing economic strength are expected to keep rates high in the short term.
Country Garden Holdings, the largest private developer in China, narrowly avoided defaulting on its debt this week but faces doubts from creditors about its ability to service upcoming obligations without liquidity support, amidst a grim outlook for the country's property sector.
Asian markets will be influenced this week by key economic indicators, growth-supportive policies, and diplomatic signals from China, as well as reacting to the Jackson Hole speeches by global policymakers, with a focus on China's manufacturing and services PMIs and efforts to reverse the country's economic slump, while facing headwinds from tightening financial conditions and rising US Treasury yields.
Oil prices dipped as the market awaited a potential resumption of Iraqi oil exports through the Ceyhan oil terminal, which could ease supply tightness caused by OPEC+ production cuts, while concerns over the Chinese economy weighed on demand outlook.
UK Prime Minister Rishi Sunak arrived in India for the G20 Summit, expressing his respect for Prime Minister Narendra Modi and his commitment to concluding a trade agreement between the UK and India, while also addressing issues such as Khalistani protests and the Russia-Ukraine war.
Chinese property giant Evergrande's shares plummeted over 80% in Hong Kong after trading resumed following a 17-month suspension, reflecting the challenges faced by China's real estate sector amid a post-pandemic slump and a nationwide property crisis.
Canada added 40,000 jobs in August, surpassing economists' expectations, while the unemployment rate remained steady at 5.5%. This positive job growth suggests that the economy is not completely stalled, but the Bank of Canada is not expected to raise interest rates in the near future.
The number of Americans filing new claims for unemployment benefits has decreased for a second consecutive week, defying expectations of an increase in job losses despite the Federal Reserve's interest rate hikes.
China's economic challenges, including debt, unfavorable demographics, and a stagnating growth rate, have implications for global trade and the ambitions of President Xi Jinping, potentially leading to unforeseen consequences and strategic shifts.
Federal Reserve Chair Jerome Powell warned that inflation and economic growth remain too high, indicating that interest rates may continue to rise and remain restrictive for longer. However, markets rebounded, with US stocks rallying and Asian markets starting the week on a high note. The Hong Kong stock market saw contrasting performances, with China Evergrande Group plunging while Xpeng soared. US Trade Representative Katherine Tai highlighted China's dominance in rare earth metals, making US supply chains vulnerable. Investors will be watching for the Personal Consumption Expenditure report and the August jobs report to gauge the Fed's future rate decisions. Powell's ambiguous remarks left room for interpretation, with markets focusing on the positive outlook for economic growth rather than the cautionary tone on interest rates.
The Tadawul All Share Index in Saudi Arabia rose by 0.44 percent, while the Nomu parallel market saw an increase of 1.77 percent, and the MSCI Index climbed by 0.86 percent.
Goldman Sachs has reduced its probability of a U.S. recession in the next 12 months to 15%, citing positive developments in inflation and the labor market, while Bloomberg's consensus of economists estimate a recession probability of 60%.
The global economy may face slow growth due to record levels of government debt, geopolitical tensions, and weak productivity gains, which could hinder development in some countries even before it begins.
The G20 summit in India has sparked speculation that India may be changing its name to Bharat, an ancient Sanskrit term, which is already used interchangeably with India. Critics see this as part of the Hindu nationalist government's attempt to erase the Muslim Mughal influence in the country, while others argue for retaining the name "India" for its historical value and global recognition.
Fannie Mae economists warn that the US housing market will continue to struggle even if the country avoids a recession, as high mortgage rates and tight financial conditions weigh on home sales.
UK Prime Minister Rishi Sunak believes that the G20 leaders can address the enormous challenges facing the world and provide leadership, as he attends the summit in Delhi alongside Prime Minister Narendra Modi, who emphasized India's inclusive approach to the G20 presidency and proposed granting the African Union permanent membership.
Chinese blue chips rally as Beijing introduces measures to support the market, including reducing stamp duty on stock trading and approving the launch of retail funds, while US Commerce Secretary Gina Raimondo begins talks with Beijing to boost business ties.
Lebanon's political elites are trying to avoid implementing tough IMF reforms and instead are pursuing a "shadow plan" that shifts the burden of bailing out the financial system onto ordinary Lebanese citizens already impacted by the economic crisis, say experts and former officials. The reforms not only pose a financial burden on the elites but also threaten the corrupt networks that have allowed them to exploit the system for years.
China's real estate market downturn, characterized by falling property prices and potential defaults by developers, poses significant risks to Chinese banks, global markets, and Asian economies closely linked to China through trade and investment. The situation has prompted cautiousness among international investors and led to negative impacts on Japan's exports.
Global shares rise as investors are relieved by the Federal Reserve's cautious approach to interest rates, with Japan's Nikkei 225 and Hong Kong's Hang Seng among the indices posting gains.
China's Belt and Road Initiative, which has expanded global investments and trade, is facing challenges due to economic slowdown, defaults, and the impact of COVID-19, leading President Xi Jinping to prioritize profitability in projects and explore new approaches to economic assistance.
China's ban on seafood imports from Japan, prompted by concerns about radioactive contamination, is seen as more of a political gesture than an economic blow, as marine products make up less than 1% of Tokyo's global trade dominated by cars, with the impact on Japan's total exports negligible.
India's stock market is reaching record highs, making it an attractive investment destination for global investors, especially as China struggles with economic woes, positioning India as a "safe place to hide" and a geopolitical juggernaut.
China's new home prices are expected to show no growth this year, reflecting the ongoing pressure in the crisis-hit property sector and the struggle to restore confidence among policymakers.
Saudi Arabia's membership in the G20 is a reflection of its growing importance in global energy exports, international trade, and financial resources, as well as its impact on the global economy and its commitment to stability and development.
Gas prices in California have risen to $5.26 per gallon, an increase of nearly $0.40 in the past month, and could be further impacted by Tropical Storm Hilary, potentially causing refinery shutdowns and further price increases.
Carrefour, a French supermarket chain, will attach labels to products to warn consumers of "shrinkflation," where products have become smaller but the price has risen, without changes to packaging or recipe, and the company is committed to renegotiating the price; this is the latest move against major food producers accused of profiting from inflation.
Thousands of flights were cancelled in the UK due to a network-wide airspace failure caused by technical issues, with the effects expected to last for days.
India's use of Digital Public Infrastructure (DPI) to enhance financial inclusion and delivery of public goods and services has been praised by the World Bank, with the India Stack achieving an 80% financial inclusion rate in just six years, according to a report prepared for the G-20 summit. The report also highlights the success of India's UPI platform, as well as other digital ID and fast payment systems around the world. India is leveraging its leadership of the G-20 to promote its advancements in financial inclusion and offer support to non-G-20 countries in implementing their own digital infrastructure.
Turkey's central bank raised its key interest rate by 750 basis points to 25%, signaling a stronger determination to address inflation and leading to a rare lira rally in response.
The African Union's membership in the G20 will provide an opportunity for the continent to make a significant contribution to addressing global challenges, according to AU Commission head Moussa Faki Mahamat.
The South African rand weakened in response to higher U.S. Treasury yields and concerns over further U.S. interest rate hikes, as stated by Federal Reserve Chair Jerome Powell, which typically has a negative impact on risk assets.
The UK economy faces critical weeks ahead as data releases will determine whether the country is putting the past three years of crises behind, with expectations for continued economic turbulence, potential unemployment increase, and rising fuel prices impacting inflation and interest rates, while the Office for Budget Responsibility's forecasts are likely to show increased borrowing, potentially leading to pressure for tax rises or spending cuts.
Japan is unlikely to intervene in the market unless the yen weakens past 150 to the dollar and becomes a major political issue, according to a former central bank official, who also noted that the benefits of a weak yen are becoming clearer due to the re-opening of Japan's borders.
China's largest private property developer, Country Garden, has warned of default risks if its financial performance continues to deteriorate, following a record loss in the first half of the year. The company's net loss between January and June amounted to 48.9 billion yuan ($6.72 billion), compared to a net loss of 6.7 billion yuan in the second half of 2022 and a net profit of 612 million yuan in the first half of 2022. This comes as Chinese authorities are working to revive the troubled property market, which accounts for approximately a quarter of the country's economy.
The fall in the value of the Pakistani rupee against the US dollar is expected to cause a surge in inflation, with petrol and diesel prices projected to increase by over Rs13 per litre due to the exchange rate, potentially reaching double digits if the dollar continues to appreciate. Additionally, the rise in dollar value will also lead to further increases in electricity tariffs, making the lives of citizens more difficult.
The newly implemented rules in America that allow Medicare to negotiate drug prices could have damaging effects on innovation in the pharmaceutical industry and may discourage investment in new medicines, leading to fewer treatments in the future. Instead of focusing solely on price controls for drugs, regulators should address the issues within the rest of the supply chain, such as opaque middlemen and hospital mergers, to effectively lower healthcare costs.
The US has expanded restrictions on exports of Nvidia artificial-intelligence chips, including to the Middle East, in an escalation of its crackdown on China's technological capabilities.
India's 40 percent export duty on onions is raising concerns in the Arab world about the impact on food inflation and supply chains, as GCC countries heavily rely on Indian imports, and the duty could potentially lead to price fluctuations and shortages of the vegetable in the region.
The Bureau of Labor Statistics has revised down US job growth estimates by about 300,000 jobs, indicating weaker job growth than previously projected.
China's economic weakness will pose challenges for developing economies and regions that rely on it for growth, but the U.S. economy is well-positioned to withstand the resulting headwinds, according to U.S. Deputy Treasury Secretary Wally Adeyemo.
Japan's Prime Minister Fumio Kishida is planning to implement measures to support the fishing industry affected by China's ban on Japanese seafood, including additional funds from the government budget reserves, after visiting Tokyo's fish market.