Economy

NEW YORK (Reuters) – Two leaders of the U.S. Consumer Products Safety Commission are calling for the agency to investigate e-commerce retailers Shein and Temu after “deadly baby and toddler products” were sold on both websites, according to a letter posted on the U.S. CPSC website on Tuesday. U.S. CPSC Commissioners Peter Feldman and Douglas Dziak want the agency to evaluate how Singapore’s Shein, China’s Temu and other foreign-owned e-commerce platforms comply with its rules, handle relationships with third-party sellers and represent imported products. Shein and PDD Group’s Temu, which both ship cheap merchandise into the U.S. from China, are raising “specific concerns” for the Commission for their use of de minimis, a rule exempting packages valued at $800 or less from tariffs if they are sent directly to shoppers. Critics of Shein and Temu attribute low prices and de minimis to Shein and Temu’s success in the U.S. Both companies have also come under scrutiny for the quality of their products.A bipartisan group of U.S. lawmakers last year planned to introduce a bill to eliminate the de minimis, which is widely used by e-commerce platforms including third-party sellers on Amazon.com (NASDAQ:AMZN) and Walmart (NYSE:WMT).com. More

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(Reuters) – A look at the day ahead in Asian markets.World markets will open on an extremely shaky footing on Wednesday after a gloomy snapshot of U.S. factory activity on Tuesday reignited fears about the U.S. economy’s ‘soft landing’ and slammed stocks, oil prices and bond yields sharply lower. It was the first trading day of September for U.S. markets after the Labor Day holiday weekend, and for those who put greater store in ‘seasonal’ factors, it is an ominous start to what is traditionally a weak month for stocks and risk appetite.Many market moves on Tuesday were the largest since the historic volatility burst on Aug. 5 – Wall Street, world stocks and Treasury yields had their biggest declines and U.S. equity volatility had its biggest rise since that day.Others were even more eye-opening and ominous.Oil slumped 5%, its biggest fall this year and a reflection of investors’ worries over U.S. and Chinese growth. If demand and economic activity are wavering in the world’s top two economies, Houston, we have a problem.On top of that, Nvidia (NASDAQ:NVDA) shares tanked 10%, wiping around $265 billion off the company’s value in one of the biggest one-day market cap losses on record. If Nvidia has been responsible for much of the tech- and AI-fueled equity rally over the past 18 months, selloffs of this magnitude are a worry.Weak purchasing managers index data from China and the United States are setting the negative tone, and there are more Asia and Pacific PMI reports scheduled for release on Wednesday, including China’s ‘unofficial’ Caixin service sector PMI. China’s ‘official’ PMI figures from Beijing over the weekend showed that manufacturing activity sank to a six-month low in August as factory gate prices tumbled and owners struggled for orders. Shanghai stocks open on Wednesday at a seven-month low.Australian GDP figures are also on tap on Wednesday. Economists polled by Reuters predict growth in the second quarter accelerated to 0.3% from 0.1% at a quarter-on-quarter pace, but year-on-year growth held broadly steady at 1.0%. After the broad-based and aggressive selloff in U.S. stocks on Tuesday, Asian markets will almost certainly open in the red on Wednesday – the old adage still stands: when the U.S. catches a cold, the rest of the world sneezes.Institute for Supply Management figures show that U.S. manufacturing activity has contracted every single month since October 2022, with the exception of March this year. That’s nearly two years of uninterrupted manufacturing recession. This has been offset by expansion in services activity, but rates traders are now attaching a near 40% chance of the Fed beginning its easing cycle later this month with a 50 basis point cut. Here are key developments that could provide more direction to Asian markets on Wednesday:- China ‘unofficial’ Caixin services PMI (August)- Australia GDP (Q2)- South African President Ramaphosa State Visit to China More

The research firm’s commentary from Citi comes amid speculation on global central bank movements and recent statements from the RBA’s Governor and Deputy Governor, who indicated a resistance to market expectations for interest rate reductions within the current year.The firm posits that the RBA’s communication strategy might shift if the Fed implements a significant policy rate decrease of 50 basis points at the September Federal Open Market Committee (FOMC) meeting.According to Citi, such a move by the Fed could lead to market optimism and subsequent predictions for more aggressive easing by the RBA. However, Citi maintains the view that, regardless of the Fed’s actions, the RBA is unlikely to cut rates in 2023.”…[I]f the US Fed does indeed cut by 50bps in the September FOMC meeting, then the September RBA meeting a week after raises risks of more hawkish Delphic guidance from Governor Bullock against market pricing,” Citi economists wrote in a note.”Barring a downside inflation surprise in Q3—we have trimmed-mean inflation at 0.8%— and an unexpected rise in the unemployment rate, we do not see the RBA cutting rates this year, even if the Fed is reducing policy rates by increments of 50bps.”Citi concluded that there is only the August Labour Force Survey ahead of the next RBA meeting. More

BofA cut its China real GDP growth forecast to 4.8% for 2024 from 5.0% previously, and trimmed forecasts to 4.5% for both 2025 and 2026 from 4.7% earlier.Inadequate easing measures, a persistent confidence problem, and moderating investment growth are weighing on Beijing’s efforts to kick start growth. The strong economic growth seen in Q1 has faded in recent quarters, economists at BofA said in a recent note. Consumer confidence has dipped to the lowest level since the economy reopened from the pandemic, pressuring consumer spending. Investment growth has also decelerated, with the drag from the property sector offsetting resilience in manufacturing and infrastructure. The Chinese economy has seen its growth engine “sputtering” in Q2 and Q3 2024 after an impressive sequential growth pickup in Q1, according to the report.Export growth, however, has been a bright spot, underpinned by solid external demand and a bottoming out of the global technology cycle, the economists added.The bar for a step up in monetary policy easing is expected to remain high unless export growth “decelerates meaningfully,” they added, pointing to possible trade frictions in the coming quarters as a catalyst.  More

Lula in late August appointed the central bank’s monetary policy director, Gabriel Galipolo, to be the institution’s next governor replacing Roberto Campos Neto, whose term ends in December.The government expected to have Galipolo confirmed before the bank’s next monetary policy meeting on Sept. 17-18, aiming to increase the significance of his remarks as Campos Neto’s departure approaches.But Vanderlan Cardoso, the senator who chairs the economic affairs committee and is responsible for setting a date for the hearing, said on Tuesday he would not schedule it for Sept. 10, as some government members had speculated.Galipolo’s appointment must be confirmed by the economic affairs committee before going to the full Senate for approval for him to take the post in January.Cardoso’s decision means that it will not be possible for Galipolo to receive green light before the policy meeting, as the central bank board faces a silent period running from the week before the meeting until the week after.Lula’s Institutional Relations Minister Alexandre Padilha had said on Monday the government was working to have Galipolo confirmed by next week, likely on Sept. 10. But their hopes were shattered by Cardoso.”There are still some doubts about the hearing, so I want to let you know that it will not happen on Sept. 10,” the senator said.That also means the hearing will likely not happen until next month. Brazilians vote in local elections on Oct. 6, so most lawmakers will be out of Brasilia until then to help campaigning in their home states. More

“We still see more cuts in 2025/26 than the markets are pricing, with a return to a deposit rate of 2% by 3Q25 (at the latest) and to 1.5% in 2026,” Economists at BofA said in their latest Euro Area Viewpoint.The economic outlook is at the heart of this dovish call, as further weakening in economic activity could likely force the ECB rate cut as early as October 2024, with cumulative cuts of 50 basis points in 2024 being a lower bound, the economists said.  Europe’s recovery remains fragile, BofA believes, and will likely be shallow, pressured by several economic factors including slowing growth in China as well as political factors.”Sentiment is deteriorating, the labour market is no longer as firm as it was, savings rates are rising again,” BofA said, adding that the negative risks from political uncertainty outweigh “the possibility of small fiscal slippage here and there.”As economic growth is expected to remain sluggish, inflation is likely undershoot the central bank’s 2%, the economists noted, forecasting euro-area core inflation at 2.8%, 1.9%, and 1.8% for 2024, 2025, 2026, respectively.While the ECB remains cautious on rate cuts, inflation undershooting the central bank’s target would force the ECB to cut rates to their “neutral rate assumption in 2025 and further in 2026,” BofA said, adding that this scenario remains their base case.  More

LONDON (Reuters) – Britain and the European Union must turn their “first steps” to rebuild trust into a “steady walk” as they confront common challenges, the president of the Eurogroup of euro zone finance ministers said on Tuesday.Addressing representatives of Britain’s financial industry, Paschal Donohoe said his discussions with UK finance minister Rachel Reeves included pensions system reform and unlocking longer-term savings to boost capital markets, as well as the euro zone’s drive for an elusive capital markets union.”Of course, the UK and EU each have to make their own decisions about how to make progress. However, it is really welcome that we have moved onto a new footing in our relationship which allows us to exchange views on these important topics for our citizens and businesses,” he said. “More broadly, I strongly welcome the UK Government’s intention to strengthen and deepen relations with the EU,” Donohoe, an Irish government minister, told an audience at the medieval Guildhall, home of the City of London Corporation.Britain’s Prime Minister Keir Starmer has sought to reset relations with the EU since coming to power this summer, with improved ties at the heart of his efforts to boost Britain’s economic growth.Donohoe said he welcomed the UK-EU Memorandum of Understanding on Financial Services, signed last year, which enabled meetings of the Joint EU-UK Financial Regulatory Forum.In a speech titled ‘Financing Our Future’, the Eurogroup president said progress on a euro zone capital markets union was vital.”At a time of growing dissatisfaction about the role of market-based solutions and at a time of such widespread budget challenges, making further progress on Capital Markets Union is essential,” he said.Recent work between member states signalled “a sea change in attitudes and political determination”.”To play the ‘devil’s advocate’, without a true capital markets union in Europe, I think the green transition as one prime example, is far less likely to happen,” he told the audience in London. More