1 Japan growth runs out of steam (BBC) Japan’s economy grew at a weaker-than-expected rate in the second quarter despite an aggressive spending policy by the government. Gross domestic product grew at an annualised rate of 0.2% in the three months to June, below market forecasts for 0.7% and a marked slowdown from the 2% rate in the first quarter.
The figures come after the government launched a massive new stimulus package worth 28 trillion yen ($265bn). On top of Prime Minister Shinzo Abe’s fiscal stimulus, Japan’s central bank is running negative interest rates and an unprecedented asset-purchase programme.
Mr Abe has been under pressure to end two decades of deflation, or falling prices, but analysts say his policies are not working. Due to the weak state of the economy, Mr Abe has delayed another increase to the country’s controversial sales tax to 2019.
Japan needs to raise more money to fund its public debt, one of the world’s largest, but when it last increased the sales tax in 2014 the economy shrunk as people cut back on spending. Private consumption accounts for about 60% of GDP but that only rose 0.2% in the second quarter, compared with a 0.7% increase the quarter earlier.
2 Chequered 2016 for crude oil (Dharmesh Bhatia in Khaleej Times) There are several reasons for crude oil prices reaching a peak of $52, after a consistent rise from the rock-bottom price of 13 years i.e. $26.05 in the first two quarter of the current year. Steady increase in energy demand, decrease in US production and unplanned productions cut in Nigeria and Canada have contributed to the rise in prices.
However, doubt prevails whether this rally would sustain or not. Normally, refineries resort to excessive production to cope with the summer demand for petrol, gas and fire-heating oil by purchasing crude oil and transforming it into refined energy products.
Currently, however, there is a glut of such refined products across the world. Refineries have produced so much gasoline during the current year that supply has exceeded demand, resulting in good news for consumers, but not for bulls.
Crude prices are under pressure from gasoline and the scenario is likely to continue even into the third quarter. If refineries purchase less than expected, crude oil producers will be forced to divert production into storage and, consequently, prices may once again face tremendous pressure.
The US crude oil stock decreased by 14 million barrels in May but inventories reached the peak of 522 million barrels in the week ending July 22, which is 60 million barrels more than the average of the last five years.
3 July 2016 was hottest month ever (Michael Slezak in The Guardian) Last month was the hottest month in recorded history, beating the record set just 12 months before and continuing the long string of monthly records, according to the latest Nasa data.
The past nine months have set temperature records for their respective months and the trend continued this month to make 10 in a row, according to Nasa. July broke the absolute record for hottest month since records began in 1880.
Similar data from the US National Oceanographic and Atmospheric Administration (Noaa) said the past 14 months have broken the temperature record for each month, but it hasn’t released its figures for July yet.