Fitch says trade policy disruption is ‘darkening’ global economic outlook By Reuters

China says only small number of firms moving supply chains out of the country

Fitch says trade policy disruption is ‘darkening’ global economic outlook

(Reuters) – The escalation in the ongoing U.S.-China trade war and the prospect of a no-deal Brexit are among trade policy disruptions that are “darkening” the global economic outlook, Fitch Ratings said on Monday.

A no-deal Brexit scenario could lead to a “significant UK recession” in 2020, the ratings agency said, adding that Eurozone growth prospects will be “materially lower” in the event of a no-deal Brexit.

The note added that the impact of China’s slowdown has also been a significant factor in recent growth disappointments in the Eurozone.

Fitch said that the Chinese economy’s growth rate is expected to fall to 6.1% in 2019 and 5.7% in 2020 from the earlier forecasts of 6.2% and 6.0% respectively.

Fitch said that Asia Pacific countries were mostly stable amidst rising global growth risks, with the only negative outlook in the region being on Hong Kong, which was downgraded by the ratings last week following months of protests.

Commenting on activities of central banks, the ratings agency said it looks likely that the U.S. Federal Reserve will cut interest rates by another 25 basis points in December after which it is likely to put rates on hold through 2020.

Fitch added that the European Central Bank is expected to announce significant fresh accommodation very soon, including a restart of asset purchases in October.

The ECB is meeting on Thursday as investors seem convinced it will introduce a new wave of monetary stimulus at the meeting.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.




Source link