Asia’s natural gas prices are rising. Now higher oil prices and tariffs could cause more pain

Prices of Asia’s natural gas jumped this year — in tandem with crude — as most of the region’s long-term LNG contracts are linked to oil prices, Rajiv Biswas, Asia-Pacific chief economist at HIS Markit, told CNBC in an email. “With world oil prices having moved higher in recent weeks as US sanctions on Iranian oil exports will be implemented in November, this is contributing to further upward pressure on Asian LNG contract prices,” he added. When U.S. sanctions on Iran kick in next month, they c


Prices of Asia’s natural gas jumped this year — in tandem with crude — as most of the region’s long-term LNG contracts are linked to oil prices, Rajiv Biswas, Asia-Pacific chief economist at HIS Markit, told CNBC in an email. “With world oil prices having moved higher in recent weeks as US sanctions on Iranian oil exports will be implemented in November, this is contributing to further upward pressure on Asian LNG contract prices,” he added. When U.S. sanctions on Iran kick in next month, they c
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Company: cnbc, Activity: cnbc, Date: 2018-10-17  Authors: weizhen tan
Keywords: news, cnbc, companies, pain, prices, wood, supply, higher, natural, cause, rising, barrel, lng, asian, asias, demand, tariffs, browne, oil, gas


Asia's natural gas prices are rising. Now higher oil prices and tariffs could cause more pain

Prices of Asia’s natural gas jumped this year — in tandem with crude — as most of the region’s long-term LNG contracts are linked to oil prices, Rajiv Biswas, Asia-Pacific chief economist at HIS Markit, told CNBC in an email.

“With world oil prices having moved higher in recent weeks as US sanctions on Iranian oil exports will be implemented in November, this is contributing to further upward pressure on Asian LNG contract prices,” he added. Average Chinese gas import prices jumped 23 percent compared to a year ago in the second quarter, while Japanese contract prices were up 17 percent in the same period.

When U.S. sanctions on Iran kick in next month, they could push oil prices to above $90 per barrel, some analysts predicted. During Asian trade on Tuesday afternoon, Brent crude was at $81.04 per barrel, and U.S. crude futures at $71.84 a barrel — up from above $60 per barrel at the start of this year.

Asia’s spot LNG market — which has been growing steadily — will also be hit in the short term. Biswas expects Asian spot prices to move even higher to $11.85 per million British thermal units (mmBtu) by January 2019. Spot prices for the October delivery in Asia were at $11.40 per mmBtu, up 30 cents in a week, according to a Aug. 24 Reuters report.

Meanwhile, supply from Australia, the world’s largest exporter of LNG, is tightening as domestic demand is fighting for a share of the pie with Asia. That situation will remain until 2028, according to Nicholas Browne, director of gas and LNG research at Wood Mackenzie.

The bulk of growth in Asian demand is coming from China, as it switches from coal to gas.

Chinese demand has jumped 150 percent between 2017 and 2018 — making up half of the global demand growth, according to Wood Mackenzie in a report. China is expected to import record amounts of LNG again this winter, Browne added.

But Wood Mackenzie’s supply forecast for Australia shows that “from 2028 there is not enough gas to meet both LNG contracts and demand,” Browne said. “More gas will need to be developed and commercialised, or LNG imported, to meet the needs of both the domestic market and to fulfil LNG contracts.”

“However, no new easy and economical sources of supply are currently available to the market,” he concluded.

That could hit major buyers of Australian LNG, such as China’s Sinopec and Malaysia’s Petronas, Browne said.

According to a Wood Mackenzie report this week, some decisions surrounding future new LNG projects in Russia, the U.S. and Qatar might be coming up, while producers in Southeast Asia may expand their facilities to meet the demand.


Company: cnbc, Activity: cnbc, Date: 2018-10-17  Authors: weizhen tan
Keywords: news, cnbc, companies, pain, prices, wood, supply, higher, natural, cause, rising, barrel, lng, asian, asias, demand, tariffs, browne, oil, gas


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The case of the missing Saudi journalist is creating major worries around the oil market

As Saudi Arabia pushes back against international pressure that it played a role in the disappearance of a prominent journalist, analysts are warning there could be fallout for global oil markets. Turkey reportedly believes the Washington Post journalist and critic of the Saudi administration was deliberately killed inside the building and his body removed. The stock market in Saudi Arabia plunged on Sunday, and analysts believe oil could be the next to be affected. Oil prices rose on Monday aft


As Saudi Arabia pushes back against international pressure that it played a role in the disappearance of a prominent journalist, analysts are warning there could be fallout for global oil markets. Turkey reportedly believes the Washington Post journalist and critic of the Saudi administration was deliberately killed inside the building and his body removed. The stock market in Saudi Arabia plunged on Sunday, and analysts believe oil could be the next to be affected. Oil prices rose on Monday aft
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Company: cnbc, Activity: cnbc, Date: 2018-10-15  Authors: weizhen tan, umar farooq, anadolu agency, getty images
Keywords: news, cnbc, companies, missing, prices, major, source, khashoggi, case, killed, international, oil, creating, arabia, worries, journalist, market, saudi


The case of the missing Saudi journalist is creating major worries around the oil market

As Saudi Arabia pushes back against international pressure that it played a role in the disappearance of a prominent journalist, analysts are warning there could be fallout for global oil markets.

Relations between the kingdom and the some parts of the international community have deteriorated rapidly after Jamal Khashoggi, a journalist who resided in the U.S., disappeared early this month after visiting the Saudi consulate in Istanbul.

Turkey reportedly believes the Washington Post journalist and critic of the Saudi administration was deliberately killed inside the building and his body removed. Riyadh has dismissed the claims.

The stock market in Saudi Arabia plunged on Sunday, and analysts believe oil could be the next to be affected.

Robert Carnell, chief economist head of research at ING, said the incident “opens a new source of risk.”

“Any Saudi retaliation will presumably mainly come through reduced oil supply and higher prices. That won’t help market sentiment,” he wrote in a note on Monday.

Oil prices rose on Monday afternoon during Asian trade, with Brent crude jumping 1.29 percent to $81.47 per barrel, and U.S. crude futures rising 1.14 percent to $72.15 a barrel.

U.S. President Donald Trump said on Saturday there would be “severe punishment” for Saudi Arabia if it turned out that Khashoggi was killed in the consulate. But the Middle Eastern country said on Sunday it would retaliate to possible economic sanctions taken by other states over the case, the state news agency SPA reported, quoting an official source.


Company: cnbc, Activity: cnbc, Date: 2018-10-15  Authors: weizhen tan, umar farooq, anadolu agency, getty images
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‘I would not associate Jay Powell with craziness,’ says IMF’s Christine Lagarde

International Monetary Fund managing director Christine Lagarde said Thursday she “would not associate” U.S. Federal Reserve Chairman Jerome Powell “with craziness.” “I would not associate Jay Powell with craziness. Lagarde made the comment in response to a question from CNBC’s Geoff Cutmore about U.S. President Donald Trump. I think the Fed has gone crazy,” the president said after walking off Air Force One in Erie, Pennsylvania for a rally. Lagarde added: “All over the world, it is certainly a


International Monetary Fund managing director Christine Lagarde said Thursday she “would not associate” U.S. Federal Reserve Chairman Jerome Powell “with craziness.” “I would not associate Jay Powell with craziness. Lagarde made the comment in response to a question from CNBC’s Geoff Cutmore about U.S. President Donald Trump. I think the Fed has gone crazy,” the president said after walking off Air Force One in Erie, Pennsylvania for a rally. Lagarde added: “All over the world, it is certainly a
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'I would not associate Jay Powell with craziness,' says IMF's Christine Lagarde

International Monetary Fund managing director Christine Lagarde said Thursday she “would not associate” U.S. Federal Reserve Chairman Jerome Powell “with craziness.”

“I would not associate Jay Powell with craziness. No, no, he comes across, and members of his board, as extremely serious, solid and certainly keen to base their decisions on actual information, and decide to communicate that properly,” she said, speaking to CNBC at the IMF and World Bank annual meetings in Bali, Indonesia.

Lagarde made the comment in response to a question from CNBC’s Geoff Cutmore about U.S. President Donald Trump. The American leader knocked the Fed on Wednesday for continuing to raise interest rates despite some recent market turbulence.

“I think the Fed is making a mistake. They are so tight. I think the Fed has gone crazy,” the president said after walking off Air Force One in Erie, Pennsylvania for a rally.

Lagarde added: “All over the world, it is certainly a good principle to have independence of the central banks and of the central bank governors. Certainly we have advocated that in all countries, and I think that the Fed is no exception.”


Company: cnbc, Activity: cnbc, Date: 2018-10-11  Authors: weizhen tan, ted kemp, kazuhiro nogi, afp, getty images
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World Bank president warns: Debt and trade problems are painting ‘a troubling picture’

Amid U.S.-China trade tensions and high levels of debt faced by low income countries, one message is clear, the president of the World Bank Group said on Thursday: Trade is important for the poor. Speaking to CNBC on Thursday at the IMF and World Bank annual meetings in Bali, Indonesia, Jim Yong Kim said that the World Bank is trying to get the message across that trade is critical. Currently, he said, there are risks from trade growth going down and many low income countries becoming more indeb


Amid U.S.-China trade tensions and high levels of debt faced by low income countries, one message is clear, the president of the World Bank Group said on Thursday: Trade is important for the poor. Speaking to CNBC on Thursday at the IMF and World Bank annual meetings in Bali, Indonesia, Jim Yong Kim said that the World Bank is trying to get the message across that trade is critical. Currently, he said, there are risks from trade growth going down and many low income countries becoming more indeb
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World Bank president warns: Debt and trade problems are painting 'a troubling picture'

Amid U.S.-China trade tensions and high levels of debt faced by low income countries, one message is clear, the president of the World Bank Group said on Thursday: Trade is important for the poor.

Speaking to CNBC on Thursday at the IMF and World Bank annual meetings in Bali, Indonesia, Jim Yong Kim said that the World Bank is trying to get the message across that trade is critical.

“We are trying to put evidence on the table which says trade is critical if we want to end extreme poverty,” he said. “Evidence is simply: We are here to end poverty, trade is important for that.”

Currently, he said, there are risks from trade growth going down and many low income countries becoming more indebted.

“We’re worried about trade tensions, we’re worried about the fact that many many lower income countries have now gone into a level of indebtedness,” he said. “It’s a troubling picture.”

Kim added: “On the other hand, the message we are trying to give here is: Let’s do everything we can to prepare for whatever trade tensions might exist. We’re preparing developing countries that are in the midst of trying to understand what will happen to those trade tensions.”

What those countries need to do is “very clear,” he said: “They need to get their fiscal house in order, they need to have monetary policy that makes sense, and that doesn’t try to manipulate currencies.”

Commenting at a Thursday news conference, Kim said he is very concerned about the trade tensions between China and the United States and warned of a clear hit to global growth if all countries escalated their tariff threats.

He added that more study is needed to understand the effects of trade war on countries that supply goods and services to China.


Company: cnbc, Activity: cnbc, Date: 2018-10-11  Authors: weizhen tan
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We’re being punished for ‘doing the right thing’: Philippine Finance secretary

The Philippines is in a good position to deal with emerging markets rout: its finance secretary says 1 Hour Ago | 02:18The Philippines is “being punished” for managing its economy in the right way, given the effect of tightening U.S. monetary policy on the embattled emerging market, Philippine Finance Secretary Carlos Dominguez suggested on Thursday. Speaking to CNBC at the IMF and World Bank meetings in Bali, Indonesia, Dominguez said that the U.S. should consider that its actions “affect every


The Philippines is in a good position to deal with emerging markets rout: its finance secretary says 1 Hour Ago | 02:18The Philippines is “being punished” for managing its economy in the right way, given the effect of tightening U.S. monetary policy on the embattled emerging market, Philippine Finance Secretary Carlos Dominguez suggested on Thursday. Speaking to CNBC at the IMF and World Bank meetings in Bali, Indonesia, Dominguez said that the U.S. should consider that its actions “affect every
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We're being punished for 'doing the right thing': Philippine Finance secretary

The Philippines is in a good position to deal with emerging markets rout: its finance secretary says 1 Hour Ago | 02:18

The Philippines is “being punished” for managing its economy in the right way, given the effect of tightening U.S. monetary policy on the embattled emerging market, Philippine Finance Secretary Carlos Dominguez suggested on Thursday.

Speaking to CNBC at the IMF and World Bank meetings in Bali, Indonesia, Dominguez said that the U.S. should consider that its actions “affect everybody.”

“It affects the entire world, capital flows back to the U.S., and we’re trying our darndest here, being punished for something we’re doing right,” he said, responding to the news that U.S. President Donald Trump said the Fed has “gone crazy” in continuing to raise interest rates.

The Philippine central bank in September raised rates for the fourth time in five months, and has signaled that it’s prepared to tighten monetary policy further to support its currency, if needed.

Despite having already embarked on tightening, the Philippine peso has taken a battering from the recent emerging markets rout, which analysts have blamed partly on weak sentiment and a strong U.S. dollar pushed by rising rates.

Still, Dominguez said that the Southeast Asian country is in a “pretty good” position to deal with the emerging markets rout. He pointed to its “solid” foreign exchange reserves, strong banking system and fiscal position.

The Philippines will not cut its infrastructure spending just to be cautious about its deficit spending, he said, but instead may look into dialing down on non-infrastructure expenditure.

“Infrastructure for us is a real critical investment that we have to make,” he said, adding that the Philippines only averaged 2.3 percent of GDP in infrastructure spending in the past 50 years.

“Our economy’s choking. We have very bad traffic situation, our ports and airports need to be upgraded … Some time in the future, we will have to re-think that this is the last thing we are going to cut,” Dominguez said.


Company: cnbc, Activity: cnbc, Date: 2018-10-11  Authors: weizhen tan
Keywords: news, cnbc, companies, strong, tightening, philippines, emerging, rout, finance, thing, spending, punished, dominguez, secretary, world, doing, markets, right


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A ‘geopolitical recession’ has arrived and the US-led world order is ending, Ian Bremmer says

The world is entering a “geopolitical recession,” heralding the end of the U.S.-led global order, according to prominent political analyst Ian Bremmer. Speaking at the ANZ Finance & Treasury Forum in Singapore, Bremmer said: “This geopolitical recession is something really simple — it’s the end of the U.S.-led global order. He said: “I’m much more concerned that when the next economic recession hits … And certainly there’s not as much free money, and when the corporates are tightening their belt


The world is entering a “geopolitical recession,” heralding the end of the U.S.-led global order, according to prominent political analyst Ian Bremmer. Speaking at the ANZ Finance & Treasury Forum in Singapore, Bremmer said: “This geopolitical recession is something really simple — it’s the end of the U.S.-led global order. He said: “I’m much more concerned that when the next economic recession hits … And certainly there’s not as much free money, and when the corporates are tightening their belt
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Company: cnbc, Activity: cnbc, Date: 2018-10-10  Authors: weizhen tan, sean gallup, getty images, andrew harrer, bloomberg
Keywords: news, cnbc, companies, bremmer, economic, italy, ian, greater, arrived, recession, world, geopolitical, global, usled, americans, ending, order, political


A 'geopolitical recession' has arrived and the US-led world order is ending, Ian Bremmer says

The world is entering a “geopolitical recession,” heralding the end of the U.S.-led global order, according to prominent political analyst Ian Bremmer.

Speaking at the ANZ Finance & Treasury Forum in Singapore, Bremmer said: “This geopolitical recession is something really simple — it’s the end of the U.S.-led global order. And we don’t know what is replacing it yet.”

Bremmer, who is the president and founder of political risk consultancy Eurasia Group, suggested a new economic downturn would lead to greater fragmentation across the globe.

He said: “I’m much more concerned that when the next economic recession hits … And certainly there’s not as much free money, and when the corporates are tightening their belts, then we’ll get into trouble. In other words, the political implications of the next economic down-cycle will be much greater dislocation.”

He believes a major reason for the current political disruption is that the “geopolitical order is no longer as aligned with the United States and its allies.”

He added that the relationships between Americans and Europeans had deteriorated with the latter becoming weaker on the global stage. He also pointed to the rise of China and said that, overall, emerging markets are becoming more important.

“The Americans are less interested in exporting democracy … Today there is an argument to be made that the Americans are exporting populism,” he said, pointing to the new anti-establishment government in Italy. Coming to power in early June, Italy currently has a ruling coalition that is made up of the right-wing Lega party and the left-leaning Five Star Movement.


Company: cnbc, Activity: cnbc, Date: 2018-10-10  Authors: weizhen tan, sean gallup, getty images, andrew harrer, bloomberg
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The US-China dispute ‘is not about the trade deficit,’ Barclays says

The US-China trade war is ‘not going to settle down’ soon: Barclays 4 Hours Ago | 02:03Investors should look beyond the upcoming U.S. midterm elections in gauging the tense geopolitical situation between the U.S. and China, according to Barclays’ head of macro research. The issues at the heart of U.S.-China relations go beyond trade tensions, which some analysts have said may ease after the U.S. midterm elections, Barclay’s Ajay Rajadhyaksha told CNBC at the Barclays Asia Forum in Singapore. Whi


The US-China trade war is ‘not going to settle down’ soon: Barclays 4 Hours Ago | 02:03Investors should look beyond the upcoming U.S. midterm elections in gauging the tense geopolitical situation between the U.S. and China, according to Barclays’ head of macro research. The issues at the heart of U.S.-China relations go beyond trade tensions, which some analysts have said may ease after the U.S. midterm elections, Barclay’s Ajay Rajadhyaksha told CNBC at the Barclays Asia Forum in Singapore. Whi
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Company: cnbc, Activity: cnbc, Date: 2018-10-09  Authors: weizhen tan
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The US-China dispute 'is not about the trade deficit,' Barclays says

The US-China trade war is ‘not going to settle down’ soon: Barclays 4 Hours Ago | 02:03

Investors should look beyond the upcoming U.S. midterm elections in gauging the tense geopolitical situation between the U.S. and China, according to Barclays’ head of macro research.

The issues at the heart of U.S.-China relations go beyond trade tensions, which some analysts have said may ease after the U.S. midterm elections, Barclay’s Ajay Rajadhyaksha told CNBC at the Barclays Asia Forum in Singapore. While some have speculated that U.S. President Trump may simply be escalating the trade war with China, to distract voters from troubles at home.

But investors hoping to wait out the tensions until the Nov. 6 midterms may be in for a surprise: “They still need to keep waiting for a while,” said Rajadhyaksha.

“This is not the U.S. and NAFTA. This is not the U.S. and the European Union … There is a significant part of the U.S. administration that is worried about China’s technology ambitions,” he said, adding that trade frictions will not settle down anytime soon.

The issue of technology transfers has cast a shadow on relations between the two economic powerhouses, with the Trump administration initially imposing tariffs on Chinese imports to penalize China for trade practices that it said involved stealing American companies’ intellectual property.

The world’s second-largest economy has a “Made in China 2025” program, which is a strategic plan to make China a leader in key global industries. Among those sectors targeted by Beijing is the high technology space.

Rajadhyaksha said: “The administration wants fundamental change in how the Chinese treat intellectual property, how they talk to technology companies looking to invest in China. This is not about the trade deficit. If it was, it would be easy to solve.”


Company: cnbc, Activity: cnbc, Date: 2018-10-09  Authors: weizhen tan
Keywords: news, cnbc, companies, administration, uschina, war, technology, barclays, dispute, trump, deficit, tensions, settle, china, trade


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‘Irresponsible fiscal policy’ is a major concern in the current political climate, says CIO

“Irresponsible fiscal policy” is on the rise as governments increasingly try to appeal to angry voters, according to a chief investment officer overseeing international macroeconomic trends. “One of the main factors that we look at throughout emerging markets and the developed markets, take Italy for example, is the rise of populism leading to irresponsible fiscal policy. Probably one of the most important political variables we have to look at,” Hasenstab told CNBC’s “Squawk Box.” It pledged to


“Irresponsible fiscal policy” is on the rise as governments increasingly try to appeal to angry voters, according to a chief investment officer overseeing international macroeconomic trends. “One of the main factors that we look at throughout emerging markets and the developed markets, take Italy for example, is the rise of populism leading to irresponsible fiscal policy. Probably one of the most important political variables we have to look at,” Hasenstab told CNBC’s “Squawk Box.” It pledged to
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'Irresponsible fiscal policy' is a major concern in the current political climate, says CIO

“Irresponsible fiscal policy” is on the rise as governments increasingly try to appeal to angry voters, according to a chief investment officer overseeing international macroeconomic trends.

Speaking with CNBC on Tuesday, Michael Hasenstab, chief investment officer at Templeton Global Macro, a unit under Franklin Templeton Investments, called the trend a response to populism — a term with varied definitions — and emphasized that political risk had become a pressing investment consideration.

“One of the main factors that we look at throughout emerging markets and the developed markets, take Italy for example, is the rise of populism leading to irresponsible fiscal policy. Probably one of the most important political variables we have to look at,” Hasenstab told CNBC’s “Squawk Box.”

He added, though, that such trends are not present everywhere, and “that creates an opportunity to look at the politics, and identify those countries that are not on that deteriorating path.”

A new government took power in Italy this year led by a coalition formed by the anti-establishment Five Star Movement and the right-wing League party. It pledged to embark on tax cuts, guaranteed basic monthly wages for the poor, and committed to other spending in the already-debt-ridden country.

Germany’s mainstream political parties, for their part, have been under pressure from a rising challenge from the far-right. The country’s government recently set out measures to tackle a drastic shortage of affordable housing, a problem that detractors have argued was caused by an influx of migrants.


Company: cnbc, Activity: cnbc, Date: 2018-10-04  Authors: weizhen tan
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India’s rupee sinks to record lows. Its central bank isn’t expected to save it

The rupee’s plunge into record-low territory this year is unlikely to slow — even if India’s central bank hikes its rate this week, according to experts carefully watching the Reserve Bank of India. “Even if it hikes by 25 (basis points) as expected that’s unlikely to help the currency … Sakpal predicted the central bank will merely match the three U.S. Federal Reserve rate hikes this year without giving the rupee any leeway to gain against the dollar. The rupee hit a series of record lows aga


The rupee’s plunge into record-low territory this year is unlikely to slow — even if India’s central bank hikes its rate this week, according to experts carefully watching the Reserve Bank of India. “Even if it hikes by 25 (basis points) as expected that’s unlikely to help the currency … Sakpal predicted the central bank will merely match the three U.S. Federal Reserve rate hikes this year without giving the rupee any leeway to gain against the dollar. The rupee hit a series of record lows aga
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India's rupee sinks to record lows. Its central bank isn't expected to save it

The rupee’s plunge into record-low territory this year is unlikely to slow — even if India’s central bank hikes its rate this week, according to experts carefully watching the Reserve Bank of India.

Analysts largely expect India, Asia’s third-largest economy, to raise its benchmark rate by 25 basis points at its meeting this week, with more increases to come this and next year. But while an interest rate hike would normally be expected to support a currency, the rupee “is in for continued losses ahead,” according to Prakash Sakpal, vice president of research at Dutch bank ING.

“Even if it hikes by 25 (basis points) as expected that’s unlikely to help the currency … The RBI will have to do more, though that looks unlikely on the grounds of on-target inflation and stress in the financial sector,” he said.

Sakpal predicted the central bank will merely match the three U.S. Federal Reserve rate hikes this year without giving the rupee any leeway to gain against the dollar.

The rupee hit a series of record lows against the dollar in the past two months, weakening to about 73 rupees against the greenback. That marked a decline of more than 14 percent since the start of this year, earning it the status of the worst-performing in the region — alongside the Indonesian rupiah and Philippine peso.

India’s currency depreciation has been attributed to rising oil prices — it’s a major crude importer — and a widening current account deficit. Experts say that broader global concerns, which rose to the forefront in the emerging currencies sell-off following economic troubles in Turkey and Argentina, have also weighed on investor sentiment.

Shashank Mendiratta, an economist covering South Asia and India at ANZ, added: “While higher interest rates may help, a single rate hike is unlikely to suffice. It will require a series of rate hikes as has been the case in Indonesia.”


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Another round of Trump tariffs could mean ‘economic shock waves’ for China

Key consumer tech products have so far mostly escaped the heat of the ongoing trade war. But according to the latest list of tariffs that kicked in this week, they have been spared so far. Autos is another sector that could continue to be targeted, said Carol Liao, a senior China economist at J.P. Morgan. Automakers are already feeling the heat, with Trump slapping a 25 percent levy on China-made autos, in July. General Motors, meanwhile, sought an exemption for its Buick Envision model, also ma


Key consumer tech products have so far mostly escaped the heat of the ongoing trade war. But according to the latest list of tariffs that kicked in this week, they have been spared so far. Autos is another sector that could continue to be targeted, said Carol Liao, a senior China economist at J.P. Morgan. Automakers are already feeling the heat, with Trump slapping a 25 percent levy on China-made autos, in July. General Motors, meanwhile, sought an exemption for its Buick Envision model, also ma
Another round of Trump tariffs could mean ‘economic shock waves’ for China Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-09-27  Authors: weizhen tan, str, afp, getty images
Keywords: news, cnbc, companies, biswas, mean, economic, consumer, china, products, economist, shock, tariffs, chinese, sector, targeted, round, waves, trump


Another round of Trump tariffs could mean 'economic shock waves' for China

Key consumer tech products have so far mostly escaped the heat of the ongoing trade war. But if U.S. President Donald Trump makes good on his threat to impose tariffs on the full range of Chinese imports into his country, it could hit that sector hard, experts said.

Rajiv Biswas, Asia Pacific chief economist at IHS Markit, said that products such as mobile phones and smart watches and other wearable devices could be targeted in the next round, while ANZ Greater China Chief Economist Raymond Yeung pointed to mobile phones as well as other consumer goods.

“If the US Administration imposes a third tranche of tariff measures on a further USD267 billion of Chinese exports, this will significantly ramp up the economic shock waves to Chinese exporters,” Biswas told CNBC in an email.

Apple said earlier this month that the tariffs could affect the Apple Watch and AirPods as well as adapters and chargers for a host of products. But according to the latest list of tariffs that kicked in this week, they have been spared so far.

Autos is another sector that could continue to be targeted, said Carol Liao, a senior China economist at J.P. Morgan.

According to ANZ, key items at stake include consumer goods, which form 45 percent of China’s exports to the U.S., and autos, which is at 4 percent.

The next round of tariffs, according to Biswas, would likely hit large multinational companies producing goods in China for export, as well as Chinese small and medium-sized enterprises that are part of the global supply chain.

Automakers are already feeling the heat, with Trump slapping a 25 percent levy on China-made autos, in July. Ford scrapped a plan to sell its new Chinese-made Focus Active crossover model in the U.S., while Volvo moved the production of its XC60 crossover from China to Sweden. General Motors, meanwhile, sought an exemption for its Buick Envision model, also made in China.


Company: cnbc, Activity: cnbc, Date: 2018-09-27  Authors: weizhen tan, str, afp, getty images
Keywords: news, cnbc, companies, biswas, mean, economic, consumer, china, products, economist, shock, tariffs, chinese, sector, targeted, round, waves, trump


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