Just as the global market is gradually digesting Brexit When sentiment began to regain lost ground, the successive terrorist attacks in Nice, France and the coup in Turkey gave the market another “blow”. Coupled with the poor economic prospects of the United States, Japan and other countries, the risk aversion sentiment in the global market gradually increased. Amid the turmoil, China’s economic data for the first half of the year showed steady growth, giving the world reassurance. [Oxford Cloth]
At the beginning of last week, with the rise of major global stock markets and the decline of safe-haven assets such as gold and the Japanese yen, the UK left Europe’s impact on global markets is gradually receding. On the 12th, global stock markets generally rose. Meanwhile, prices for safe-haven assets such as gold fell and the yen fell to its lowest level against the dollar in more than two weeks.
However, all this later reversed. On July 14, a truck plowed into a crowd of people on the Promenade des Anglais in Nice, a tourist city in southern France, killing at least 84 people. On July 15, some Turkish soldiers launched a military coup, and then the Turkish government announced that it had “basically controlled the situation.” A series of events triggered another rise in market risk aversion. The international gold price once rose by US$10 to US$1,337.9 per ounce, the US dollar’s increase in the Turkish lira exchange rate expanded to more than 3.5%, and other emerging market currencies also fell. [210D Oxford cloth]
In addition to emergencies, the market is also bearish on the later growth trend of developed economies. On the 12th, the International Monetary Fund (IMF) released a report stating that the uncertainty caused by Brexit may cause the U.S. economy to face downward risks. The IMF recommended that the Fed should delay raising interest rates if downside risks materialize. Analysts believe that due to chronic problems such as sluggish productivity growth, declining labor participation rate, and widening gap between rich and poor, the U.S. economy lacks the driving force for sustained and steady growth. On the 13th, due to the failure of domestic consumption to recover as scheduled after the postponement of the consumption tax increase plan, the Japanese Cabinet Office significantly lowered the expected growth rate of Japan’s real gross domestic product (GDP) in fiscal 2016 from the previous 1.7% to 0.9%. At the same time, continued weakness in domestic personal consumption and corporate investment has also caused the Japanese economy to lack growth momentum. 【600D Oxford cloth】
China’s economy shows a completely different side. On the 15th, China’s National Bureau of Statistics released data showing that China’s economy grew by 6.7% year-on-year in the first half of the year, in line with expectations at the beginning of the year. Analysts believe that in an environment of sluggish world economy and sluggish trade growth, as well as the challenges of emerging long-term domestic contradictions, stable growth is no longer easy, and China has delivered a good report card. Especially under the current circumstances of intensified global risks and lack of market confidence, the performance of China’s economy in the first half of the year has provided strong support for world economic growth. This is in sharp contrast to the U.S. economy, which is frequently supported by Western public opinion but not very promising.
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