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Stormy times ahead for world trade

Friday, November 06, 2015 - 01:34

European share markets struggle under the weight of negative corporate news from VW, ArcelorMittal and Maersk - the latest German industry data also adding to worries over a fragile global outlook. Kirsty Basset reports.

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The European Commission is asking member countries to investigate potential breaches of emissions rules, following revelations VW rigged U.S. diesel emissions tests. The fallout may not be helping German industrial output - which posted its steepest drop in more than a year. Jeremy Cook, from World First. (SOUNDBITE)(English) CHIEF ECONOMIST AT WORLD FIRST, JEREMY COOK, SAYING: "Global manufacturing is in trouble and so Germany is therefore in trouble. We've got falling demand, we've got falling commodity prices and the reputational damage that the Volkswagen scandal has done maybe on German manufacturing isn't helping matters at all." And global trade giants are feeling the heat. Danish shipping company Maersk says its third quarter profit almost halved - and expects demand to slow further. The world's largest steelmaker ArcelorMittal has cut its 2015 outlook. And shares in luxury watchmaker Richemont slumped 9 per cent as it grapples with weak demand in its biggest market, Hong Kong. But analysts say factors such as slowing growth in China shouldn't affect the U.S. Fed's thinking on rates. (SOUNDBITE)(English) CHIEF ECONOMIST AT WORLD FIRST, JEREMY COOK, SAYING: "If the Federal Reserve sits there and doesn't raise rates because of issues abroad or fears about issues outside of the U.S. economy then it shouldn't even be in a position where it's talking about hiking rates by the end of 2015." Speculation over a possible rate hike continues to grow ahead of next month's meeting.

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Stormy times ahead for world trade

Friday, November 06, 2015 - 01:34