SNAPSHOT2 min read

Janet Mui: weekly economic update 7 February

Chinese authorities have taken measures to shield the economy and markets from the impact of coronavirus. In the US, the latest data suggest hiring remains healthy.

07/02/2020
SCH8975_Financial_Chart_945x470px

Authors

Janet Mui
Global Economist, Cazenove Capital
  • Chinese markets fell sharply at the start of the week. They recovered modestly after the government and central bank announced supportive measures. 
  • These included short-term interest rate cuts, liquidity injections and tax cuts for companies impacted by the epidemic. Authorities have also halved the tariff rate imposed on US imports into China.
  • The US added 225,000 jobs in January, significantly exceeding economists’ expectations and taking the three month average above 200,000. Wage growth is now running at 3.1%. In US election years, the strength of the employment market has historically been a good indicator of an incumbent president’s chances of re-election.
  • Eurozone industrial activity remains weak, according to recent data. German industrial production fell close to 7% over 2019, the weakest performance since the financial crisis. In France, public sector strikes took a toll on manufacturing.
  • We do not expect an improvement in the first quarter, given the impact of the coronavirus on global supply chains. Once the virus is contained, however, we expect that the trade agreement between the US and China will lead to some improvement in the second quarter.

 

 

Issued in the Channel Islands by Cazenove Capital which is part of the Schroders Group and is a trading name of Schroders (C.I.) Limited, licensed and regulated by the Guernsey Financial Services Commission for banking and investment business; and regulated by the Jersey Financial Services Commission. Nothing in this document should be deemed to constitute the provision of financial, investment or other professional advice in any way. Past performance is not a guide to future performance. The value of an investment and the income from it may go down as well as up and investors may not get back the amount originally invested. This document may include forward-looking statements that are based upon our current opinions, expectations and projections. We undertake no obligation to update or revise any forward-looking statements. Actual results could differ materially from those anticipated in the forward-looking statements. All data contained within this document is sourced from Cazenove Capital unless otherwise stated.

 

Authors

Janet Mui
Global Economist, Cazenove Capital

Topics

Snapshot
Market reviews
China
Economic & Strategy Viewpoint
Video

Cazenove Capital is a trading name of Schroders (C.I.) Ltd which is licensed under the Banking Supervision (Bailiwick of Guernsey) Law 2020 and the Protection of Investors (Bailiwick of Guernsey) Law 2020, as amended in the conduct of banking and investment business. Registered address at Regency Court, Glategny Esplanade, St. Peter Port, Guernsey GY1 3UF, (No.24546) . Schroders (C.I.) Limited, Jersey Branch is regulated by the Jersey Financial Services Commission in the conduct of investment business. Registered address at 40 Esplanade, St. Helier, Jersey JE2 3QB, (No.31076).

The value of your investments and the income received from them can fall as well as rise. You may not get back the amount you invested.