International News 08 April 2025
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Goldman Sachs ups US recession odds to 45%
Goldman Sachs has revised its estimate of the probability of a US recession in the next 12 months to 45%, an increase from its previous estimate of 35%. This adjustment is in line with other investment banks that have also raised their forecasts following concerns over the ongoing trade war and the imposition of import tariffs by US President Donald Trump. Tightened financial conditions and increased policy uncertainty are expected to have a greater negative impact on capital spending than initially anticipated. J.P. Morgan, for instance, now estimates the probability of a US and global recession at 60%, while Goldman Sachs had previously raised the probability of a US recession from 20% to 35% last month. This adjustment is attributed to weaker economic fundamentals compared to previous years.
https://internasional.kontan.co.id/news/goldman-sachs-kerek-peluang-resesi-as-jadi-45
Bank of Japan warns of uncertainty in Japan's economy due to US tariffs
The Bank of Japan (BOJ) has expressed concerns over mounting economic uncertainty in the country, citing concerns among companies regarding the impact of high US tariffs on their profits. The central bank's warning suggests that the trade policies of US President Donald Trump could hinder Japan's moderate economic recovery. While the BOJ has maintained its assessment that all regions in Japan are experiencing a moderate recovery or improvement, it has emphasised in its official statement that economic uncertainty is on the rise. It acknowledged that companies have expressed concerns regarding the impact of US trade policies on their production and profits, although it did not explicitly mention higher US tariffs. The BOJ remains optimistic about the Japanese economy, citing factors such as foreign tourist spending and demand for luxury goods as positive contributors to consumption.
China stocks plummet as trade war drags on, Hong Kong index plunges 10%
Significant declines were experienced by both the Hong Kong and China stock markets, as a result of global trade war fears and concerns of a deep recession. The Hang Seng Index recorded a more than 10% decline, representing the largest daily drop since the global financial crisis of 2008. Banking stocks, including HSBC and Standard Chartered, experienced a 15% drop. A similar trend was observed in China's leading stocks, which slumped by over 5% across various sectors. Concurrently, the yuan reached its lowest point since January and bond yields rose sharply. In response to the US tariffs on China exceeding 50%, China has imposed additional tariffs on US imports. This ongoing trade dispute between the world's two largest economies poses a threat not only to trade flows and China's earnings, but also to a global demand slowdown, at a time when China's growth is already stalling. Investor focus is now on Beijing to find a solution.