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Weak factories dent hopes for global economic recovery

Friday 22/March/2019 - 05:16 PM
Sada El Balad
Reuters) - Manufacturers in Europe، Japan and the United States suffered in March as surveys showed trade tensions had left their mark on factory output، a setback for hopes the global economy might be turning the corner on its slowdown.

Factory activity in the 19-country euro zone contracted at the fastest pace in nearly six years.

In Japan، manufacturing output shrank the most in almost three years، hurt by China’s economic slowdown.

And a measure of U.S. manufacturing was its weakest since June 2017 while forecasters at the Federal Reserve Bank of Philadelphia slashed their estimate for economic growth in early 2019.

German 10-year bond yields، which plunged on Thursday after the U.S. Federal Reserve signaled no more rate hikes this year، dived again to fall below zero.

European shares and the euro also fell on Friday.

In New York، the spread between the three-month U.S. Treasury bill yield and the 10-year note yield narrowed to a 12-year low — a sign of concern among investors about the growth outlook.

“No other factor shapes the euro zone business cycle more than the ups and downs of global trade،” economists at Berenberg، a bank said.

The United States and China are due to resume face-to-face talks next week، but it is unclear if the two sides can narrow their differences and end the trade war between the world’s two largest economies.

European officials are also worried about the risk of U.S. tariffs on car imports from Europe.

Edited by: Ahmad El Assasy

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