Headlines

For the first time in more than three decades, Germany has posted a monthly trade deficit, the most recent sign that Europe’s largest economy is facing stress because of interrupted supply chains and record energy prices linked to Russia’s war in Ukraine, the New York Times reported. Exports have been the economic engine in Germany for years, but the steep rise in the price of energy, driven by Russia’s moves to restrict the amount of natural gas it is delivering to Europe, has driven up the price of products made in Germany.

Japan spent nearly 30 trillion yen less in the last fiscal year than it had planned for a second year running, which analysts said raises questions about whether stimulus measures like those adopted during COVID-19 could be implemented more efficiently, Reuters reported. The Ministry of Finance said on Tuesday there was an excess of some 22.4 trillion yen ($161.41 billion) in the budget for fiscal year 2021, which ended in March, mostly unspent pandemic support funds.

Japan's services sector activity expanded at the fastest pace in over eight years in June as the easing of coronavirus curbs boosted sentiment among businesses such as those in tourism, Reuters reported. The pick-up in activity is welcome news for a government betting on domestic demand to put the world's third-largest economy firmly on a recovery track and help overcome production pressures on the country's manufacturing industry.

Argentina’s new Economy Minister Silvina Batakis vowed to continue the government’s economic plans, in a bid to stem a market plunge following a weekend filled with political turmoil in the crisis-prone nation, Bloomberg News reported. In her first words since taking over for her predecessor Martin Guzman, who suddenly resigned Saturday, Batakis sought to reassure the public she wouldn’t overhaul economic policy. “I believe in a balanced budget,” Batakis told the press in Buenos Aires after being sworn in Monday evening, without taking questions.

The Bank of England warned on Tuesday that the economic prospects for Britain and the world had darkened since the start of the year and told banks to ramp up capital buffers to ensure they could weather the storm, Reuters reported. International institutions, such as the International Monetary Fund and OECD say Britain is more susceptible to recession and persistently high inflation than other Western economies, which are all grappling with global energy and commodity market shocks. "The global economic outlook has deteriorated markedly.

Consumer inflation expectations surged in Canada, hitting fresh highs in the short-term and up "significantly" over the long-term, a Bank of Canada survey showed Monday, bolstering calls for a very rare 75-basis point rate increase, Reuters reported. "Consumers' expectations for inflation have risen, alongside concerns about prices for food, gas and rent," the central bank said in its second quarter Survey of Consumer Expectations.

Crypto hedge fund Three Arrows Capital (3AC) is seeking protection from creditors in the United States under Chapter 15 of the U.S. Bankruptcy Code, which allows foreign debtors to shield U.S. assets, according to a court filing on Friday, Reuters reported. Singapore-based 3AC is one of the highest-profile investors hit by the sharp sell-off in crypto markets and is being liquidated, Reuters reported on Wednesday. Representatives for 3AC filed a petition in the U.S. Bankruptcy Court for the Southern District of New York on Friday, according to court documents.

Record energy prices drove the inflation rate for the countries using the common European currency to 8.6 percent over the year through June, as the fallout of the war in Ukraine and the economic conflict it has set off between Russia and Western Europe continued to bite, the New York Times reported. Nearly half the 19 countries in the eurozone have now reached double-digit annual inflation, figures released Friday by Eurostat, the European Union’s statistics agency, showed. The overall rate was the latest record high since the creation of the euro in 1999.

EU states and lawmakers on Thursday agreed to rules to put a brake on state-backed foreign firms acquiring EU companies with annual turnover of 500 million euros ($520 million), underlining a more protectionist approach against a possible Chinese buying spree, Reuters reported. The European Commission presented proposals for the new takeover rules last year, aiming to stave off what it deems as unfair competition from countries such as China. The takeover rules will apply to companies getting more than 50 million euros in subsidies.

South Korea's June inflation accelerated to the fastest pace since the Asian financial crisis, fanning expectations the central bank could deliver a 50 basis point rake hike for the first time next week to cool prices and curb capital outflows, Reuters reported. The consumer price index (CPI) rose 6.0% in June from a year earlier, government data showed on Tuesday, the fastest since November 1998 and exceeding the central bank's 2% target for the 15th consecutive month. The CPI also sped up from a 5.4% rise in the previous month and exceeded the 5.9% tipped in a Reuters poll.