Global News Summary: 2nd to 8th September 2024

United States

- Economic Growth & Jobs: US economic concerns deepened as job openings fell to 7.7 million in July, missing expectations (cons. 8.1m). Nonfarm payrolls added only 142,000 jobs in August, marking the lowest three-month average since mid-2020. Despite this, the unemployment rate edged down to 4.2%. These factors led to renewed discussions about the Federal Reserve's rate cuts, with speculation on a 25 or 50 basis-point cut in September.

- Market Performance: Stocks declined sharply, with the S&P 500 dropping 1.7% and the Nasdaq 100 falling 2.7%, driven by investor concerns about the slowing US economy. Treasury yields fluctuated amid rising anxiety, and the VIX surged above 22. The dollar fluctuated, while cryptocurrency prices, such as Bitcoin, fell 4.5%.

United Kingdom

- Economic Growth & Jobs: Retail sales rose 1% in August (July +0.5%) as warm weather spurred spending on summer goods. Consumer card spending also increased by 1% after two months of decline.

- Debt Securities & Inflation: Chancellor Reeves faced accusations of planning to "fiddle the fiscal rules" to borrow billions in the upcoming budget. Meanwhile, UK house prices rose 0.3% in August, bringing the average price to £292,505, a 4.3% year-on-year increase. Northern Ireland saw the strongest growth at 9.8%, while London lagged at 1.5%.

Europe

- Economic Growth & Jobs: European markets experienced sharp declines, with the Stoxx Europe 600 and Germany's DAX dropping more than 1%. Germany's GDP contracted by 0.1% in Q2 2024, and manufacturing output fell 2.4% in July. However, Italy saw modest retail growth, while the Eurozone's Q2 GDP growth slowed to 0.2%.

- Inflation: ECB's Philip Lane warned that inflation is still a concern and that interest rates need to stay restrictive to secure the 2% inflation target.

Canada

- Jobs & Debt Securities: Canada added 22,100 jobs in August, but the unemployment rate rose to 6.6%, the highest since 2017 (excluding the pandemic). The increase was driven by part-time jobs, while the labour force grew, contributing to the unemployment rise.

Japan

- Economic Growth & Jobs: Exports grew 10.3% year-on-year, driven by strong demand for chips and cars. Former BOJ Governor Kuroda suggested Japan's neutral interest rate could be around 1.5%, with predictions of an increase from the current 0.25% to 1% as the country continues its gradual monetary policy normalisation.

Australia

- Economic Growth: Australia’s GDP grew by 0.2% in Q2 2024, with annual growth reaching 1%, below expectations. The slowdown was attributed to challenges in the private sector, and inflation remained elevated at 3.5% YoY in July.

New Zealand

- Economic Growth & Jobs: Home loan interest rates fell to 5.94% in August, marking the first dip below 6% since September 2022. This relief follows rising concerns in the real estate sector, while the government tripled the levy on foreign visitors, raising concerns about the tourism sector's recovery.

China

- Debt Securities & Inflation: The People’s Bank of China paused its gold purchases in August, leaving reserves at 72.8 million troy ounces, attributed to rising gold prices. Meanwhile, China launched an anti-dumping investigation into European dairy products, a sign of rising trade tensions.

Artificial Intelligence (AI)

- Developments: Nvidia and Broadcom suffered heavy stock declines as tech stocks faced investor concerns about economic slowdown. Nvidia dropped 4%, while Broadcom fell 10%. The US DOJ subpoenaed Nvidia as part of an antitrust investigation, and OpenAI raised $1bn for "safe" AI models, highlighting the continued focus on AI regulation and investment.

This week's summary showcases a mix of economic concerns, slowdowns in key markets, and continued volatility across global markets, driven by disappointing jobs data, tech stock declines, and potential interest rate cuts by major central banks.