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Economy in Brief

Euro Area Labor Costs Rise Faster. UK Labor Cost Growth is Slow
by Robert Brusca  June 17, 2019

Euro Area labor costs rise faster - Eurozone labor costs increased at a slightly faster pace in the first quarter, Eurostat reported Monday. Hourly labor costs grew 2.4 percent year-on-year, slightly faster than the 2.3 percent increase seen in the fourth quarter.

UK labor cost growth is slow - UK labor costs increased at the joint-lowest rate since mid-2017, the Office for National Statistics reported Monday. Labor cost per hour grew 2.1 percent annually in the first quarter, before adjusting inflation. At 2 percent, growth was lower in the private sector than the public sector

UK household financial well-being improves but is still struggling - UK households' assessment of their financial well-being improved in June and their expectations turned positive for the first time since November, survey data from the IHS Markit showed on Monday. The IHS Markit Household Finance Index, or HFI, rose to 43.8 in June from 42.8 in May.

Czech PPI inflation slows - The Czech Republic's producer price inflation slowed in May after rising in the previous month, figures from the Czech Statistical Office showed on Monday. The producer price index rose 3.8 percent year-on-year in May, slower than 4.3 percent increase in April.

2 ½ year low for Danish PPI - Denmark's producer price inflation fell to the weakest level in two-and-a-half years in May, figures from Statistics Denmark showed on Monday. The producer price index fell 0.4 percent year-on-year in May, after a 1.2 percent rise in April. T

Norway’s trade surplus falls - Norway's trade surplus decreased in May amid a fall in exports and a rise in imports, data from Statistics Norway showed on Monday. Trade surplus fell to NOK 11.34 billion in May from NOK 16.68 billion in the same period last year. In April, trade surplus was 17.25 billion

Turkey’s jobless rate rises - Turkey unemployment rate increased in March, data from the Turkish Statistical Institute showed on Monday. On a seasonally adjusted basis, the unemployment rate increased to 13.8 percent in March, from 13.6 percent rise in the previous month. In the same period last year, jobless rate was 9.9 percent

New Zealand service sector accelerates - The services sector in New Zealand continued to expand in May, and at a faster rate, the latest survey from BusinessNZ revealed on Monday with a performance of Services Index score of 53.6. That's up from 52.0 in April, and it moves further above the boom-or-bust line of 50

Large fall in Singapore exports - Singapore's non-oil domestic exports declined the most in more than three years in May as shipments to almost all major markets, especially to China, plunged from a year ago amid escalating trade disputes. NODX fell 15.9 percent in May from the high base a year ago, data from Enterprise Singapore showed on Monday. This was the third consecutive fall in exports and the biggest since March 2016. Singapore home sales surge but still drop year-over-year- Singapore home sales declined in May from last year, data from the Urban Redevelopment Authority showed Monday. Private home sales totaled 952 units in May compared to 1,122 units a year ago. Sales were down 15.2 percent from the same period of last year. However, home sales surged 29.5 percent on a monthly basis in May. Developers had sold 735 units in April.

GEOPOLITICS AND MORE...

Pompeo pleads for international response - The United States does not want to go to war with Iran but will take every action necessary, including diplomacy, to guarantee safe navigation through vital shipping lanes in the Middle East, Secretary of State Mike Pompeo said on Sunday.

Iran to breach enrichment deal limits - Iran said on Monday it would breach internationally agreed curbs on its stock of low-enriched uranium in 10 days -- a move likely to worsen already high tensions with Washington -- but it added European nations still had time to save a landmark nuclear deal.

Saudis blame Iran for tanker attack - Saudi Arabia has blamed its rival Iran for the recent attacks on oil tankers along a key shipping route in the Gulf. Saudi Crown Prince Mohammed bin Salman says his country "won't hesitate" to tackle any threats, as tensions continue to rise in the region. On Thursday, two tankers were attacked in the Gulf of Oman, a month after four others were targeted off the coast of the United Arab Emirates. The US has also blamed the attacks on Iran, which denies any involvement. "We do not want a war in the region... but we won't hesitate to deal with any threat to our people, our sovereignty, our territorial integrity and our vital interests," Prince bin Salman told the pan-Arab daily newspaper Asharq al-Awsat.

Xi to visit Kim - Chinese President Xi Jinping will go to North Korea on Thursday for two days, state media in both countries reported on Monday, making him the first Chinese leader to visit the reclusive country in 14 years.

Mexico detains nearly 800 at the border - Mexican officials detained nearly 800 undocumented migrants on Saturday, the government said, in one of the biggest swoops against illegal immigration in recent months, as members of the National Guard began patrolling the southern border.

Hong Kong demands leader’s resignation - Hong Kong's leader Carrie Lam apologized to its people on Sunday as an estimated 1 million-plus black-clad protesters insisted that she resign over her handling of a bill that would allow citizens to be sent to mainland China for trial.

Unexplained Argentine blackout - Argentine President Mauricio Macri called the massive blackout that left tens of millions in South America without power on Sunday "unprecedented", and promised a thorough investigation.

Boris comes under fire - Several hopefuls vying to replace British Prime Minister Theresa May turned their fire on favourite Boris Johnson on Sunday, questioning his pledge to leave the European Union by the end of October no matter what.

US blames Iran for drone shoot down in Yemen - Houthi rebels in Yemen recently shot down a U.S. government-operated drone with assistance from Iran, the U.S. military said in a statement on Sunday. here

Trump would raise human rights issues with Xi - U.S. President Donald Trump would raise the issue of Hong Kong human rights with China's President Xi Jinping at a potential meeting of the two leaders at the G20 summit in Japan this month, U.S. Secretary of State Mike Pompeo said on Sunday.

Trump taxes off-limits for casual browsing - A senior Democrat on a congressional panel seeking President Donald Trump's tax returns warned on Saturday that the current Congress may not see the long-sought tax documents without launching an impeachment inquiry. here

US chipmakers lobby in favor of Huawei - Huawei's American chip suppliers, including Qualcomm and Intel, are quietly pressing the U.S. government to ease its ban on sales to the Chinese tech giant, even as Huawei itself avoids typical government lobbying, people familiar with the situation said.

Brexit uncertainty hits UK investment - Brexit worries will see business investment contract faster this year and recover more slowly next year than was previously thought, a report says. The British Chambers of Commerce (BCC) says firms are putting resources into contingency plans, such as stockpiling, in a way that is "not sustainable". It says companies should be investing in measures aimed at economic growth. The BCC growth forecast for 2019 was slightly upgraded, driven by the "rapid" stock-piling earlier this year. But it said that growth would be more subdued in 2020 and 2021. Its growth expectations for the UK in 2019 is now 1.3%, from 1.2%. But it has downgraded its growth forecast for 2020 to 1.0%, from 1.3%, and to 1.2%, from 1.4%, in 2021.

German alt far right party fails to win mayoral position - Germany's far-right Alternative for Germany (AfD) party has failed to win its first mayoral seat, after it lost a key election in the country's east. Octavian Ursu of the centre-right Christian Democrats (CDU), Germany's main governing party, won more than 55% of the vote in the city of Görlitz. AfD candidate Sebastian Wippel, 36, was deemed the frontrunner after he won the first round of voting. The vote had been viewed as a litmus test for his anti-immigration party.

Trump Heights in Israel - Israel approved in principle on Sunday a new community named after U.S. President Donald Trump on a contested frontier zone with Syria - but construction looked likely to lag given Prime Minister Benjamin Netanyahu's political stumbles.

IN MARKETS...
Iran’s "Blow up the tanker" gambit fails - Oil prices slipped more than 1% on Monday as signs of an economic slowdown amid international trade disputes began to outweigh supply fears stoked by attacks on oil tankers in the Gulf of Oman last week.

German GDP will contract in Q2 - Germany's economy is set to contract slightly in the second quarter, Bundesbank said in its monthly report on Monday. Driven by investment and household spending, the economy expanded 0.4 percent in the first quarter after staying flat a quarter ago.

Huawei says ban hurts - will cost it $30bln in revenue- China's Huawei Technologies Co Ltd has taken a harder-than-expected hit from a U.S. ban, the company's founder and CEO Ren Zhengfei said, and slashed revenue expectations for the year.

Deutsche Bank to set up $50bln bad bank - Deutsche bank is planning to overhaul its trading operations by creating a “bad bank” to hold tens of billions of euros of assets and shrinking or shutting its U.S. equity and trading businesses, the Financial Times reported on Sunday. The bad bank would house or sell assets valued at up to 50 billion euros ($56.06 billion)- after adjusting for risk - and comprise mainly long-dated derivatives, the FT reported, citing four people briefed on the plan.

FedEx probe is not retaliation - China's investigation into FedEx Corp over misdirected mail should not be regarded as retaliation against the U.S. company, state news agency Xinhua said on Sunday, amid worsening relations between China and the United States.

IMF urges Ireland... - The International Monetary Fund urged Ireland to strengthen its fiscal buffers and continue preparing Brexit. Concluding the Article IV consultation, the Executive Board of IMF on Monday said although Ireland's outlook remains favorable, there are challenges from domestic capacity constraints.

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