Economy

Standard DigitalWeekend Print + Standard Digitalwasnow $29 per 3 monthsThe new FT Digital Edition: today’s FT, cover to cover on any device. This subscription does not include access to ft.com or the FT App.What’s included Global news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print editionWeekday Print EditionFT WeekendFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysisFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysisGlobal news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts10 monthly gift articles to shareGlobal news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print editionEverything in PrintWeekday Print EditionFT WeekendFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysisPlusEverything in Premium DigitalEverything in Standard DigitalGlobal news & analysisExpert opinionSpecial featuresFirstFT newsletterVideos & PodcastsFT App on Android & iOSFT Edit app10 gift articles per monthExclusive FT analysisPremium newslettersFT Digital Edition10 additional gift articles per monthMake and share highlightsFT WorkspaceMarkets data widgetSubscription ManagerWorkflow integrationsOccasional readers go freeVolume discountFT Weekend Print deliveryPlusEverything in Standard DigitalFT Weekend Print deliveryPlusEverything in Premium Digital More

EVRISI company surveys, which reflect both volumes and prices, ticked down to 47.6 this week, versus 60.8 a couple of years ago, the analysts said. “Recession readings start around 45.0. So we’re not there,” they said, though slowing growth and inflation, as the EVRISI’s proprietary survey of state sales tax receipts “continued to trend lower in July.”The lagged impact of monetary policy, which is driving the slowdown is likely to continue, Evercore ISI said, pointing to bank and loan deposit rate still around 2%; credit card rates over 20% and unprecedented quantitative tightening seen in the U.S./Eurozone last week. But so far the slew of upward U.S. S&P earnings revisions from analysts suggest the economy is “pretty strong,” they added.Last week, The Q2 consensus for S&P earnings moved up to $243, about 10% higher from the same period a year earlier. There were, however, an “unusual number of cracks” in the news last week including Cisco (NASDAQ:CSCO) announcement of lay offs, Warner Bros Discovery (NASDAQ:WBD) deteriorating television business, and Expedia (NASDAQ:EXPE)’s warning of tapering travel among others. On the global inflation front, China, the world’s second-largest economy was “still exporting disinflation in July,” they said, pointing to softer inflation data from China. China’s price producer index declined month on month and year over year in July, while China’s core CPI was 0.0% month on month and just 0.4% higher year-on-year. More

$75 per monthComplete digital access to quality FT journalism with expert analysis from industry leaders. Pay a year upfront and save 20%.What’s included Global news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print edition More

According to the survey, 60% of investors now believe that the Fed needs to implement four or more rate cuts over the next 12 months to ensure the economy avoids a downturn.This marks a notable increase in expectations for monetary easing compared to previous months. “Investors now think Fed needs to cut harder to guarantee no recession,” said BofA.The bank adds that investor optimism about a “soft landing” has risen to 76%, up from 68% in the previous month, indicating confidence that the economy can avoid a severe recession.However, the probability of a “hard landing” has also increased slightly, from 11% to 13%, reflecting persistent uncertainty.BofA notes that global growth expectations have declined sharply, with optimism dropping from a net -27% to -47%, the lowest level since May 2022.This decline is said to have been partly driven by concerns about China’s economic outlook, which has reached its lowest point in over a year.The bank states that despite the ongoing AI boom, only 24% of Chief Investment Officers (CIOs) are calling for higher capital expenditures, the lowest level since November 2023. Instead, 40% of CIOs want CEOs to focus on improving balance sheets.In terms of asset allocation, BofA reveals there has been a defensive rotation into bonds, cash, and healthcare, while investors have reduced exposure to stocks, particularly in Japan, Europe, and the tech sector.The BofA survey also highlights a continued preference for U.S. large-cap growth stocks, with the “long Magnificent 7” trade remaining the most crowded, though slightly less so than before.Overall, the survey underscores the growing belief that more aggressive Fed action is necessary to secure economic stability. More

$75 per monthComplete digital access to quality FT journalism with expert analysis from industry leaders. Pay a year upfront and save 20%.What’s included Global news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print edition More

Ueda will be requested to participate in separate sessions on Aug. 23 held by the finance committees of the upper and lower houses.The Bank of Japan surprised markets by raising interest rates to a 15-year high on July 31 and signalling its readiness to hike borrowing costs further on growing prospects that inflation will durably hit its 2% target.The decision, coupled with U.S. recession fears, roiled financial markets, triggering the Nikkei benchmark’s biggest selloff since the 1987 Black Monday crash.The market rout led senior officials from the ruling and major opposition parties to agree to summon Ueda to explain the central bank’s decision. More

The rally has pushed yields to record lows, however, and authorities have grown uncomfortable and are starting to push back. Below are some of the measures the authorities have taken so far with the aim of cooling the market: WARNINGSThe People’s Bank of China (PBOC) has warned of market risks since March, especially whenever the 30-year treasury yield fell below 2.5%. Yields fall when bond prices rise.Governor Pan Gongsheng said in June that China must address the issues that led to the collapse of U.S. lender Silicon Valley Bank, which was forced to take large losses on its bond portfolio when short-term rates rose and depositors wanted cash.He added that the central bank will work on maintaining a normal upward-sloping yield curve, where long-term rates are above short-term rates.SELLING The central bank has said that bond trading will be part of its policy programme, and in August it flagged an increase in buying and selling in the open market.It remains unclear whether the PBOC sold bonds directly, but state banks were heavy sellers of 10-year and 30-year treasuries after yields dropped to record lows early in August, according to traders and data.DAMPEN DEMANDChinese regulators have moved to restrict the duration of new bond funds, in an apparent attempt to curb investment in long-dated treasuries. Fund approval has slowed down, with no new funds being approved over nearly two months to Aug. 13. In July, the PBOC also cut the collateral requirement for medium-term lending facility (MLF) loans to banks, permitting banks to hold fewer longer-term bonds.SHAKEDOWNChina’s securities regulator in August ordered some brokerages to inspect their bond trading activities and the PBOC has announced stress tests and increased reporting requirements for institutions’ bond books.Also in August, a central bank-affiliated newspaper carried warnings that trading accounts must not be borrowed or transferred and regulators announced a probe into the market activity of some regional banks.The PBOC had surveyed some regional banks on their bond investments in July and March.EFFECTYields have jumped whenever authorities have hinted at market intervention or selling, however they remain near record lows and investors believe it will be difficult to derail the bond price rally while the economy remains in the doldrums. More

Sri Lanka’s parliament passed a new telecommunications bill last month, which amended the law for the first time in 28 years and paved the way for Starlink Lanka to enter the country.Musk’s Starlink had approached Sri Lanka in March with a proposal to set up operations, officials told Reuters last month. The company will have to pay a tariff for the licence, they said. SpaceX’s Starlink, which owns around 60% of the roughly 7,500 satellites orbiting Earth, is dominant in the satellite internet sphere.Musk has been trying to enter South Asia after expressing interest in launching Starlink in India. No formal plans have been announced yet. Starlink did not immediately respond to a request for comment. More