In this file:


·         US household wealth recovers; China tightens capital controls

… China is showing some first signs of real economic stress… 


·         Chinese importers to apply for tariff waivers on U.S. goods

… The Ministry of Finance last week posted a list of goods for which waivers could be granted that includes meats such as beef and pork, soybeans…




US household wealth recovers; China tightens capital controls;

US trade slips; OECD sees rising inflation; ECB opens door to cuts;

UST 10yr yield at 2.12%; oil and gold up; NZ$1 = 66.3 USc; TWI-5 = 71


by David Chaston, (New Zealand) 

7th Jun 19


Here's our summary of key events overnight that affect New Zealand, with news China is showing some first signs of real economic stress.


But first, data for US household net worth in the March quarter of 2019 showed this wealth recovered sharply after the Q4 2018 plunge. It increased by a massive +US$4.7 tln or +4.5% after the -3.7$ drop in the previous quarter. And the growth in household debt slowed to +2.3% annual pace, the lowest rise since 2015. US household debt levels are now at 74.8% of GDP, a load that is slowly falling.


In China, they are tightening their capital controls, and that is having some interesting day-to-day consequences. Despite claims they have everything under control, foreign banks are increasingly reluctant to lend US dollars to Chinese banks, and the nervous behaviour of some Chinese citizens as they scramble to get foreign currency is raising concerns.


And a recent mid-sized bank failure, which authorities claim is an isolated case, may be more widespread than that. The central bank is pumping in much more market liquidity than that bank's situation needs.


It's not just banking that is showing signs of stress. The recent sharp falls in car sales aren't responding to stimulus measures. Overall, confidence is taking some hits. (And to be fair, it is not just the Chinese car industry under pressure.)


The trade war policies are causing US exports and US imports to shrink and quite quickly too.


Brazil has suspended beef exports to China after confirming a case of mad cow disease. But it may be a short-lived suspension and the international animal health body hasn't changed its status for Brazil.


The OECD says inflation is rising. It said among their member countries it picked up to 2.5% in April 2019, compared with 2.3% in March, as energy prices increased by 3.8%.


In Europe, the ECB opened the door to interest-rate cuts, a significant policy shift that amplifies a global trend toward easier monetary policy to combat weaker growth. And it is clear that the US Fed is considering them as well. Others are too...


more, including links



Chinese importers to apply for tariff waivers on U.S. goods


Reporting by Shivani Singh, Dominique Patton, Muyu Xu and Hallie Gu; Additional reporting by Cheng Leng in Beijing; Editing by Richard Pullin, Joseph Radford and Tom Hogue, Reuters 

via KFGO (ND) - June 05, 2019


BEIJING (Reuters) - Chinese importers are preparing applications for waivers on import tariffs levied on more than 700 U.S. goods in the Sino-U.S trade war, after the finance ministry said it would start taking submissions.


The Ministry of Finance last week posted a list of goods for which waivers could be granted that includes meats such as beef and pork, soybeans, coal and copper scrap.


The waivers are for tariffs imposed in July last year on $50 billion worth of U.S. goods in retaliation for similar measures taken by Washington. Beijing has since imposed additional tariffs on thousands of goods as a bitter trade war has escalated.


"We're preparing our application, we'll soon submit our materials," said Shi Lei, a manager at meat importer Beijing Hopewise. "This is good news for us."


Beijing said last month that it would start a waiver program, amid growing worries over the cost of the protracted trade war on its already slowing economy.


Other goods on the list include tractors, motorcycles, mountain bikes and some pieces of medical equipment.


"The import tariff waiver is a signal that China don't want to cause bigger conflicts with the U.S., and sends out a message that the country's opening-up process is still ongoing," said Nie Wen, an economist at Hwabao Trust.


Applicants have from June 3 to July 5 to apply for these waivers. A second batch of exemptions will be granted on tariffs that were imposed on $60 billion worth of goods in September last year.


The application process for those waivers will open on Sept. 2, the ministry said.


"Applicants must be interested parties in China, including importers, consumers and industrial associations," it said in a statement, adding that some waivers could be applied retroactively.


Industrial associations were encouraged to represent their members in making applications.


Applicants need to explain if the tariffs "have caused serious economic damage" to them and their industry. They must also say if there are alternatives to their U.S. imports.


The ministry did not say when waivers would be granted.


WHO, HOW? ...