Headlines

German exports declined in May from the same month last year, according to data released on Monday that highlight the lingering effect of last year’s rise in the euro, the Financial Times reported. Exports from the eurozone’s biggest economy fell 1.3 per cent in May on a year on year basis, according to data from the Federal Statistics Office. Imports, meanwhile, were up 0.8 per cent on the same basis. The trade surplus clocked in at €19.7bn, down from the €21.8bn recorded in the same month in 2017.

Banks expect loan default rates to increase on the account of a volatile economic environment characterised by a weak shilling and rising inflationary pressures, according to the Bank Lending Survey Report released last week. According to the 2017/18 fourth quarter report compiled by Bank of Uganda, businesses that hold dollar denominated loans are likely to default because of persistent depreciation of the shilling against the dollar, AllAfrica reported. The shilling has depreciated by more than 7 per cent since the beginning of the year and is projected to weaken further.

The highest court in the country has sent the Minister of Justice and Constitutional Development back to the drawing board regarding a policy which is aimed at transforming the appointment of insolvency practitioners to redress past injustices, TimesLIVE reported. A majority judgment by the Constitutional Court‚ written by Justice Chris Jafta‚ was delivered on Thursday and ruled that the policy was flawed.

An insolvency fund has been set up by the Malta Tourism Authority to provide security to customers in the event of a licensed travel agent becoming insolvent, Times of Malta reported. Customers who would have booked travel packages that were not availed of because of insolvency, would get a refund of the payments made if they would have bought their packages from an agent subscribed to the fund.

The decision on who will succeed Mario Draghi as European Central Bank president is still a year away, but the jockeying for position is already under way. The 19 countries that use the euro are preparing for a delicate political dance that will decide who will steer the eurozone economy away from years of easy-money policies, The Wall Street Journal reported. The favorite, Jens Weidmann, the conservative president of Germany’s central bank, risks becoming a lightning rod for criticism of the nation’s dominance of the $14 trillion currency bloc.

Shanghai-listed energy and petrochemical group Wintime Energy defaulted on a bond payment on Thursday, putting $3.9bn in oustanding bonds at risk, the Financial Times reported. Chinese bond defaults have accelerated this year, leading to widening credit spreads in both the onshore renminbi and offshore US dollar bond markets.  Wintime missed payment on an Rmb1.5bn one-year commercial paper that matured on Thursday, according to Shanghai Clearing House. Wintime has the equivalent of $3.9bn in bonds outstanding, according to Thomson Reuters data.

There is light at the end of the tunnel at last, the Financial Times reported in a commentary. Workers in the eurozone are finally seeing the signs of a five-year-old recovery in their own pockets, with wage growth picking up to 2 per cent year on year, the fastest pace since an aborted spurt in 2012. The obvious reaction to this development should be to welcome it — and immediately add “not before time”. Wage growth has been miserable for a decade, not just in the eurozone, but across the rich world.

The German government says its 2019 budget will comply with eurozone debt limits for the first time in 17 years, the International New York Times reported on an Associated Press story. The draft budget also raises defense spending — a contentious issue between Germany and U.S. President Donald Trump. Finance Minister Olaf Scholz told a news conference that debt would fall to 58.25 percent of yearly economic output. That would put it below the 60 percent limit established by rules to ensure fiscal responsibility and price stability in the 19 countries that use the euro.

Barbados' creditors are gearing up for debt restructuring talks as the government advances discussions with the IMF over a potential financing package, LatinFinance reported. Newly-elected Prime Minister Mia Mottley and her administration, along with financial advisors White Oak, are expected to continue meetings with domestic creditors and their advisors over the next few weeks, a source familiar with the proceedings has said.

China Ocean Industry, the parent group of Jiangxi Shipbuilding, has entered into a debt restructuring agreement with Zhejiang Ouhua Shipbuilding, Asia Shipping Media reported. Under the agreement, China Ocean Industry will transfer 40% equity shares in its fully owned subsidiary China Ocean Hong Kong to Zhejiang Ouhua Shipbuilding to offset outstanding debt of RMB200m ($30m) owed by Jiangxi Shipbuilding to Zhejiang Ouhua. China Ocean Industry believes the deal will bring new cooperation opportunities to revive business of Jiangxi Shipbuilding.