BRICS Business

A “Beidouxing X5” rolls off the assembly line in Changhe Automobile Co. in east China’s Jiangxi Province [Xinhua]New auto sales figures from China may be the lone bright spot in an otherwise sluggish global economy as Chinese consumers continue to buy expensive new vehicles at record levels.
Auto sales in China surged 9.8 per cent year on year to 2.09 million units in May, data from an industry association showed Monday.
Sales of passenger cars rose by 11.3 per cent year on year to 1.79 million units in May, according to China Association of Automobile Manufacturers.

Emerging markets from Dubai to Mexico suffered drawbacks ahead of the Fed’s meeting on interest rates this week [Xinhua]
Markets in emerging economies will likely open jittery on Monday as global investors await a June 14-15 meeting of the US Federal Open Market Committee to discuss the possibility of interest rate hikes this summer.
Any strong indication that the Fed will hike rates is likely to increase capital outflow (a selloff) from emerging markets, mimicking the exit of tens of billions of dollars after the US ended its quantitative easing stimulus program in 2014.

World Bank president Jim Yong Kim says low commodity prices have cut into hopes of a resurgence in emerging economies [Xinhua]
Initial hopes that emerging markets could once again be lucrative to international investors appear to be fading, a new report on the global economy said on Tuesday.
The drastic drop in commodity prices, including oil prices that are 70 per cent lower now than the same period two years ago, has set back efforts by emerging markets to regain the momentum they once had just five years ago.

The RBI governor Rajan said “given the uncertainties, the Reserve Bank will stay on hold” [Xinhua]The Indian Central Bank on Tuesday kept the benchmark repurchase rate at a five-year low of 6.5 per cent.
The Reserve Bank of India had eased rates by 150 basis points since January 2015, including a 25 bps reduction at its last policy review in early April.
“The inflation surprise in the April reading makes the future trajectory of inflation somewhat more uncertain,” the central bank said.

The yuan weakened 294 basis points on Monday to 6.5784 against the U.S. dollar, the lowest level since February 2011 Xinhua]
China’s central bank on Monday pumped more money into the market to ease a liquidity strain.
The People’s Bank of China (PBOC) conducted 65 billion yuan ($9.88 billion) in seven-day reverse repurchase agreements (repo), a process in which central banks purchase securities from banks with an agreement to resell them in the future.

The composite leading business cycle indicator compiled by the South African Reserve Bank (SARB) increased by 0.3 per cent in March 2016 compared with February. This was the first monthly increase since October 2015 and may herald a turning point in the business cycle. Four of the nine component time series that were available for March 2016 increased, while five decreased.

Have global markets turned away from an oil glut? Some investment firms think so [Xinhua]
What oil glut?
Oil Futures continued to advance early Tuesday amid concern over the impact week-long wildfires in Canada have had on that country’s output as well as security fears in producers Nigeria, Libya and the Middle East.
International Benchmark Brent crude appeared to be stroking the $50 mark on Tuesday rising 0.71 per cent to $49.32.
US Benchmark West Texas intermediate was trading at $48.28, up 1.17 per cent from Monday’s close.

A staff member (L) of Didi Kuaidi, car service Uber’s major rival in China, instructs people to order taxis at a Didi station in east China’s Shanghai, Oct. 15, 2015 [Xinhua]China’s popular ride hailing app Didi Chuxing (earlier Didi Kuadi) is preparing for an initial public offering in New York, Bloomberg reported, citing people familiar with the matter.
China-based Didi, a rival to US’ Uber Technologies Inc, is targeting a listing as soon as next year, Bloomberg said on Monday.

A citizen books taxi on a street in Shanghai, east China, Oct. 8, 2015 [Xinhua]
Apple on Friday announced an investment of $1 billion in China’s ride-hailing platform Didi Chuxing.
“We decided to make the investment for a number of strategic reasons, including the chance to learn more about certain segments of the China market; we see lots of opportunities for closer cooperation between the two companies; and we also believe it will deliver strong returns,” Tim Cook, Apple’s CEO, told Chinese agency Xinhua.
Didi Chuxing was formerly known as Didi Kuaidi.

The yen appears unstoppable in the interim as it rises against the dollar while the Nikkei takes a beating [Xinhua]
The Japanese yen has for the past few weeks defied the Bank of Japan’s (BOJ) efforts to weaken it against the dollar. Appearing unstoppable in the interim, it opened strong on Monday coming in at 107 before stabilizing at 106.60.
At it’s peak, the yen had risen to its highest gain against the greenback since 2008.
A strong yen is bad news for Japan’s economy because it means its products are more expensive for overseas importers.