MANUFACTURING
China reaches 18-month high
China’s manufacturing rose this month to its highest level in 18 months, in a sign that mini-stimulus measures to shore up growth have taken hold. The preliminary HSBC purchasing managers’ index rose to 52.0 this year from 50.7 last month on a 100-point scale on which numbers below 50 indicate contraction. This month’s reading was the highest since January last year. The report said overall new orders and new export orders in China’s manufacturing industry rose faster this month than the month before. All other categories, including employment and output prices, also improved.
MACROECONOMICS
Japan’s trade deficit triples
Japan’s trade deficit last month more than tripled from the year before to a higher-than-expected ¥822.2 billion (US$8.1 billion), as imports surged and exports edged lower. The Japanese Finance Ministry reported yesterday that imports jumped 8.4 percent year-on-year to ¥6.76 trillion while exports fell 2 percent to ¥5.94 trillion. The trade deficit was ¥911 billion in May. In seasonally adjusted terms it rose from ¥862 billion in May to ¥1.1 trillion last month.
MACROECONOMICS
Unemployment falls in Spain
The unemployment rate in Spain fell sharply in the second quarter, slipping beneath 25 percent, official data showed yesterday in a further sign that the country is pulling away from deep economic crisis. The rate fell by 1.45 percentage points and the number of people looking for work fell by 310,400, marking the biggest quarterly fall since the series of statistics began, the data showed. This was the first time the rate had been less than 25 percent, or one in four of the workforce, since the third quarter of 2012, but 5.5 million people are still unemployed in Spain.
MACROECONOMICS
NZ raises benchmark rate
New Zealand yesterday raised its benchmark interest rate to 3.5 percent but signaled a pause in its program of rate hikes. The announcement prompted a sharp drop in the NZ dollar, which was trading down nearly 1 percent at US$0.8625. New Zealand has been going it alone among developed nations this year by raising interest rates. Yesterday’s decision was the central bank’s fourth successive hike of a quarter percentage point.
AUTOMAKERS
GM issues more recalls
General Motors Co (GM) issued six more recalls on Wednesday, bringing its annual total to 60 recalls covering almost 30 million vehicles. The latest recalls cover nearly 823,000 cars, trucks and sport utility vehicles (SUV) mostly in North America but also includes a small number of exports. The largest is for faulty seats in just over 475,000 cars and small SUVs. Other problems include incomplete welds on seat brackets, turn signal failures, power steering failures, loose suspension bolts and faulty roof rack bolts.
AVIATION
Bombardier cuts jobs
Canada’s Bombardier will cut 1,800 jobs, the troubled aviation giant announced on Wednesday in a major reorganization. “This marks another step in Bombardier’s evolution,” said Pierre Beaudoin, the company’s president and chief executive officer, who said the overhaul, to be completed by Jan. 1 of next year, would reduce costs and overheads. Meanwhile, one of its senior officials, Aerospace president and chief operating officer Guy Hachey, is stepping down.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure