World growth precarious, weak trade shows China struggling

Fresh trade data out of China added to evidence that the world’s second-largest economy is struggling for traction.

In Germany, another decline in orders placed with manufacturers suggested a lack of momentum in Europe’s largest economy. Meanwhile, consumers in the eurozone became much more sanguine about the inflation outlook, a development that feeds into the debate about how long interest rates must rise, The Economic Times reports.

After US lawmakers agreed to suspend the debt limit, the Treasury said it expects a significant rebuilding of its cash balance by month’s end.

Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy.

Asia

China’s economic recovery showed further signs of weakening in May, clouding the outlook for the rest of the year and fueling calls for more central bank stimulus. Trade figures this week were the latest to show the economy’s weakening outlook. Both exports and imports contracted in May from a year ago, a sign of subdued global and domestic demand.

Foreign tourists packing flights to Japan are helping the economy climb out of a recession with spending power that is also fueling upward pressure on hospitality-sector pay and prices.

 

In the over three decades since the collapse of the Soviet Union, Russia held on to its spot as the biggest trading partner for Kazakhstan even as China made inroads across much of the region. But financial and economic sanctions that have sidelined Russia and diverted trade flows are creating an opening for China.

Europe

Consumer expectations for euro-zone inflation eased significantly in April, adding to the case for the European Central Bank’s historic ramp-up in interest rates to conclude this summer.

 

German factory orders unexpectedly fell in April, further dimming prospects for Europe’s largest economy after it endured the first recession since the pandemic over the winter.

 US & Canada

The Bank of Canada defied expectations by restarting its interest-rate tightening campaign, saying the economy is running too hot. Policymakers raised the overnight lending rate to 4.75%, the highest since 2001.

The US service sector nearly stagnated in May as business activity and orders downshifted, while a measure of prices paid slid to a three-year low.