Global Economic Outlook: Debt, Trade Wars, and Low Productivity - News Essentials

2023-08-28 15:20:32

(Illustration: Camille Charbonneau)

NEWS ESSENTIALS

• The post-pandemic world faces a gloomy whirlwind of debt, trade wars and low productivity. Record levels of public debt, geopolitical tensions that threaten to split the global trading system and the likely persistence of weak productivity gains could impose a slow-growth future on the world that will stunt development in some countries before it even begins. .

• The Canadian economy should experience a marked slowdown in Q2, which could prompt the Bank of Canada to take a break. Canada’s second-quarter GDP report, due on Friday, is expected to show a sharp slowdown in economic growth, according to a Archyde.com poll of economists. This could cause the Bank of Canada to suspend interest rate hikes despite recent higher inflation data.

• The Canadian union Unifor is voting in favor of a strike mandate against the three Detroit automakers. Canada’s Unifor union said Sunday its members had voted in favor of strike mandates against the Detroit Three automakers, which would allow their bargaining committees to take action, if necessary, to reach fair collective agreements.

• Hawaiian Electric calls Maui County’s wildfire lawsuit “irresponsible”. Hawaiian Electric said Maui County’s lawsuit was “factually and legally irresponsible,” pointing to the county’s responsibility for the Hawaii wildfires.

• BYD buys the electronic components production activity of the American company Jabil in China for 2.2 billion dollars (B$). Chinese automaker BYD has announced that its electronics division has reached an agreement with US manufacturer Jabil to buy its electronic components production business in China for $2.2 billion.

TRENDS BEFORE OPENING

Futures contracts linked to the main Canadian stock market indices changed little as investors focused on a slew of upcoming economic data domestically. US stock index futures were up ahead of the release of key inflation and employment data due this week. Technology stocks led the gains on European stock exchanges. The US dollar fell after Fed Chairman Jerome Powell left open the possibility of further rate hikes, while theeuro, sensitive to China, rose slightly after Beijing halved its stamp duty on stock transactions. In Asia, the Nikkei Japanese recorded its strongest daily gains in the past two months and the Chinese stocks also progressed. THE oil changed little and theor remained stable.