United States:
U.S. ‘Disappointed’ Over China’s Fingerpointing on Trade Rift
The Trump administration on Monday expressed disappointment that China blames the U.S. for the failure of trade talks between the two countries. “It is important to note that the impetus for the discussions was China’s long history of unfair trade practices,” the Treasury Department and the U.S. Trade Representative said in a joint statement. “Our negotiating positions have been consistent throughout these talks, and China back-pedaled on important elements of what the parties had agreed to.” The U.S. is “disappointed” that the Chinese have used the ‘White Paper’ and recent public statements to “pursue a blame game misrepresenting the nature and history of trade negotiations between the two countries,” the joint statement continued. The statement released by the Beijing government over the weekend with considerable fanfare asserted that President Donald Trump’s decision to raise tariffs on $200 billion of Chinese goods on May 10 was a breach of an agreement reached by Trump and President Xi Jinping.
Europe:
ECB Under Pressure as Inflation Slows More Than Forecast
Euro-area inflation eased more than expected in May, piling further pressure on European Central Bank policy makers as they assess a deepening slowdown and the need for stimulus. Consumer prices rose 1.2% in May, dropping back to the lowest in more than a year, from an Easter-boosted 1.7% pace in April. The core inflation rate fell to 0.8%, with both figures coming in below the median estimates of economists. The latest unwelcome development comes as ECB policy makers prepare to meet to debate the appropriate amount of stimulus for the economy. On Thursday, they’ll unveil a fresh growth and inflation forecasts for the 19-country region, and are expected to release further details on a planned batch of long-term bank loans to grease the wheels of the economy. The backdrop is looking increasingly grim, with trade tensions damping confidence, hitting manufacturing and growth around the world. Concern about the outlook has pushed German 10-year bund yields to a record low, while a market measure of euro-area inflation expectations has plunged to the weakest since 2016, when the ECB was pumping 80 billion euros ($90 billion) a month into the economy via its QE program.
UK:
U.K. Retail Crisis Deepens as Stores Report Plunging Sales
U.K. retail sales plunged in May, reinforcing a gloomy picture for the industry that’s seen a number of high-profile businesses run into trouble. Industry figures show total sales fell 2.7% from a year earlier, the biggest drop since at least 1995 when excluding Easter distortions. While some of that relates to strong figures a year earlier, when sales were boosted by sunshine, a royal wedding and the buildup to the football World Cup, political and economic uncertainty also played a significant role, the British Retail Consortium said. BRC Chief Executive Officer Helen Dickinson said the poor figures increase the risk of further job losses and store closures. Troubled retail empire Arcadia Group, which owns Topshop and Miss Selfridge, hired two restructuring experts to its board in April, has proposed exiting the U.S. and close 23 stores in the U.K. and Ireland. Consumers have accounted for much of the economic growth since the U.K.’s vote to leave the European Union in 2016,but well-known companies on the British high street have struggled in recent months.
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