New
Sanctions Readied by U.S., EU as Russia Prepares
- The U.S and European Union may impose tougher sanctions against Russia
- As Vladmir Putin’s government sought replacements for defense imports and considered restrictions on some agriculture products from America and its allies.
- The new sanctions are aimed at “key sectors” of Russia’s economy
- Finance, defense and energy
- However, Russian government says that sanctions won’t achieve their goal and Russia will become self-sufficient
- Russia also signaled possible retaliation that it may ban imports of chicken from the U.S and fruit from Europe because of concern about contamination.
- Russia was the second-largest market after Mexico, for U.S chicken last year. It counts about 7% of U.S poultry exports
- The U.S is likely to deny Russian access to oil-production equipment that could be used in the Arctic and deep waters, and add more banks and energy companies to the list of those banned from U.S financing
- Japan’s retail sales feel more than forecast in June, capping a weak quarter that challenges Abe’s bid to reflate the economy while heaping a heavier tax burden on consumers
- Sales ▼0.6% YoY; forecast was ▼0.5%
- In the second quarter, sales ▼7% QoQ
- Abe is counting on consumers to bear a higher sales
- The Bank of Japan drives the cost of living upward with record monetary easing
- The risk is that spending fails to regain vigor, sapping strength from an economy lacking support from exports
- The effort to recover domestic demand is running up against a failure of companies to pass along record cash holdings in the form of higher wages that could help households cope with rising prices and the heavier tax burden
- The minimum wage stays the same since May from a year earlier
- Unemployment ▲ to 3.7% (3.5% previous month)
- However, labor force ▲by 120,000 people
- It indicates that the current level of vacancies still points to further declines in the jobless rate in coming months
- Pending Home Sales Index ▼1.1% (102.7 in June, 103.8 in May)
- It ▼7.3% YoY (110.8 in 2013 June)
- However, the index is still above 100 for the second consecutive months
- The market is stabilizing, but ongoing challenges are impending full sales potential
- Activity is notably higher than earlier this year as prices have moderated and inventory levels have improved
- However, supply shortages still exist in parts of the country, wages are flat, and tight credit conditions are deterring a higher number of potential buyers from fully taking advantage of lower interest rates
- The current account registered surplus of $7.92 billion for June 2014(▼ by 12.8%)
- The goods account surplus narrowed to $6.65 billion from $9.13 previous month
- The service deficit ▲ to $0.58 billion from $0.34 billion
- Exports ▼ to $50.28 billion from $52.38 billion (▼4.0%)
- Imports ▲ to $43.63 billion from $43.25 billion(▲0.9%)
- The services account deficit ▲$0.58 billion from $0.34 billion
- The other business services account deficit worsen
- The financial account recorded net outflow of $9.84 billion
- Up from $8.13 billion the previous month
- Direct investment recorded outflow of $2.06 billion (▼$2.06 billion)
- ▼ from $3.34 billion, as foreign direct investment shifted to a net inflow
- Portfolio investment recorded a net outflow of $4.22 billion (▲$4.22 billion)
- ▲ from $3.31 billion, as inflows of foreign investors’ equity securities ▼
- Other investment recorded a net inflow of $0.28 billion
- ▼ sharply from $3.95 billion due mostly to increased lending by domestic financial institutions
- Reserve assets ▲ by $4.54 billion
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