Canadian home prices rise in June but market slowing - Reuters

By Julie Gordon

OTTAWA, July 20 (Reuters) - Canadian home prices rose in June, led by the Halifax, Winnipeg and Hamilton markets, though it was the lowest June advance in 17 years, data showed on Monday.

The Teranet-National Bank Composite House Price Index, which tracks data collected from public land registries to measure changes for repeat sales of single-family homes, showed prices were up 0.7% in June from May.

If the index was corrected for seasonal pressures, there would have been a decline of 0.1% in June, the first retreat in 11 months, said Marc Pinsonneault, a senior economist at the National Bank of Canada.

Prices rose in nine of the 11 metropolitan areas in the index, with the Halifax region up 2.7%, Winnipeg, Manitoba gaining 1.8% and Hamilton, just outside Toronto, gaining 1.7%.

Compared with the same month a year ago, the index climbed by 5.9%. That was a slight deceleration of the 12-month gain after 10 months of acceleration, said Pinsonneault.

A 24% year-over-year drop in the number of repeat sales used to derive indexes, the second straight large drop from the year earlier, confirms the slowing of Canada's housing market, Pinsonneault said.

Euro zone current account surplus narrows further in May - Reuters News

FRANKFURT, July 20 (Reuters) - The current account surplus of the 19 countries sharing the euro narrowed to 7.95 billion euros in May from 14.27 billion euros in April on a big outflow of secondary income, which includes transfers between residents and non-residents, ECB data showed on Monday.

In the 12 months to May, the bloc's current account surplus fell to 2.2% of GDP from 2.7% in the preceding year, mostly on a big drop in the surplus on the trade of goods and services.

German PPI unchanged m/m, -1.8% y/y in June - Reuters News

BERLIN, July 20 (Reuters) - Germany's Federal Statistics Office reported the following economic indicator on Monday DEPPI=ECI:

GERMAN PRODUCER PRICES

JUN 2020

May 2020

JUN 2019

Month-on-month (pct change)

0.0

-0.4

-0.4

Year-on-year (pct change)

-1.8

-2.2

+1.2

Index (basis 2015)

103.0

103.0

104.9

UK consumer gloom eases but job worries widespread - IHS Markit - Reuters News

By David Milliken

LONDON, July 20 (Reuters) - British households' view of their financial situation improved modestly in July to just above its long-run average, after hitting an eight-and-a-half year low in April due to the coronavirus, a survey showed on Monday.

IHS Markit said its monthly Household Finance Index rose to 41.5 in July from 40.7 in June, though it is below its level in March before the economy went into lockdown to slow the spread of COVID-19, which has killed over 45,000 people in Britain.

"The phased reopening across parts of the UK economy appears to have been a factor supporting household finances in July," IHS Markit said, after households reported a slight improvement in their incomes and amount of work.

Non-essential shops in England reopened on June 15, and pubs and restaurants started serving again on July 4.

However, unemployment is forecast to increase dramatically later this year when a temporary government scheme that has support more than 9 million jobs ends in October.

Britain's Office for Budget Responsibility said last week that under its central scenario, the jobless rate would reach 11.9% in the final quarter of this year, matching a post-World War Two high set in 1984.

Monday's survey showed 31% of people felt their jobs were less secure than before.

"Large numbers of households are therefore maintaining the cautious spending habits adopted during the early stages of the pandemic and are now focussed on paying down debt and saving where possible," IHS Markit director Tim Moore said.

Bank of England data showed a record fall in the amount of money borrowed on credit cards in April and a further big drop in May, due to reduced spending opportunities and consumers' fears for the future.

Japan's sinking exports raise risks of prolonged economic downturn at home and overseas - Reuters News

June exports, imports fall as epidemic dents demand

Trade balance -268.8 bln yen vs forecast -35.8 bln yen

Trade data bolsters view on deeper Q2 GDP slump

Exports may put a drag on economic recovery from pandemic

By Tetsushi Kajimoto

TOKYO, July 20 (Reuters) - Japan's exports plunged at a double-digit pace for the fourth month in a row in June, backing signs the coronavirus crisis has knocked the economy into its worst postwar recession and raising the spectre of a longer and more painful global downturn.

U.S.-bound Japanese shipments nearly halved again due to plummeting demand for cars and autoparts, while exports to China remained weak, pointing to the absence of a strong growth engine for the world economy.

Ministry of Finance (MOF) data showed on Monday that Japan's exports dived 26.2% in June from a year earlier, bigger than a 24.9% decline seen by economists in a Reuters poll. The contraction slowed slightly from the prior month's 28.3% fall - the worst downturn since September 2009.

Global demand for cars and other durable goods has sunk since March as the pandemic prompted many countries to lockdown.

Though more countries have now started re-opening their economies, analysts say the trade data could diminish hopes for a quick rebound in global demand and Japan's export-led economy, especially given the resurgence of coronavirus cases in major economies like the United States, Brazil and India. (Full Story)

The International Monetary Fund last month forecast global output will shrink by 4.9% this year, versus a 3.0% contraction predicted in April. It also predicted a slower recovery in 2021, with growth of 5.4% for the year compared with a 5.8% rise seen in April.

"Exports are likely to seesaw for the time being," said Takeshi Minami, chief economist at Norinchukin Research Institute.

"If domestic and external demand remain sluggish for a prolonged period, supply capacity could be slashed, triggering a jump in bankruptcies and job losses in the latter half of this fiscal year."

 

U.S.-BOUND EXPORTS TANK

The latest slump was aggravated by a massive annual decline in U.S.-bound car shipments, a major export item for the Asian giant.

Overall shipments to the United States - Japan's key market - dived 46.6%, due to 63.3% decline in exports of automobiles, 56% drop in airplane engines and 58.3% fall in car parts.

Nissan Motor Co 7201.T, Japan's No. 2 automaker, plans a 30% year-on-year cut in global car output through December as falling demand due to the COVID-19 pandemic complicates its turnaround efforts, two sources told Reuters. (Full Story)

In 2018, the United States was Japan's largest export market, followed closely by China and led by cars and car parts.

Exports to China, Japan's largest trading partner, fell 0.2% in the year to June, as declines in shipments of chip-making machinery and chemical materials more than offset increase in nonferrous metal and car shipments.

Shipments to Asia, which account for more than half of Japanese exports, declined 15.3%, and exports to the European Union fell 28.4%.

Japan slipped into recession for the first time in 4-1/2 years in the first quarter and is on course for its deepest postwar slump as the health crisis hurt businesses and consumers.

The world's third-largest economy is forecast to contract 5.3% this fiscal year, the biggest contraction since comparable data became available in 1994, followed by a 3.3% bounce next year, a Reuters poll of over 30 economists shows.

Reflecting weak demand and declining oil prices, imports fell 14.4% in the year to June, versus a 16.8% decrease seen by analysts, leading to a trade deficit of 268.8 billion yen ($2.51 billion).

The Bank of Japan has signalled confidence the economy will emerge from the slump and has ruled out the risk of deflation, although policymakers have debated such a prospect in the face of the pandemic-induced global slump in demand and prices.