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German Ifo Confidence Falls Less Than Expected After Brexit Vote
In a signal that companies may have withstood the initial shock of Britain’s decision to leave the European Union, German business sentiment held up at a better-than-expected rate in July. The Munich-based Ifo institute’s business climate index fell to 108.3 from 108.7 in June. The median estimate in a Bloomberg survey of economists was for a decline to 107.5. The report suggests Europe’s largest economy remains robust for now, even as the U.K., the third-largest destination for German exports, reels from the effects of its 23 June referendum. A separate survey last week showed Germany’s manufacturing output reached the highest level since early 2014 in July, buttressed by record-low unemployment and increasing demand. European Central Bank President Mario Draghi said last week his institution won’t hesitate to add fresh stimulus if needed, once it has a clearer picture of the economic impact from the British referendum. Read on for additional details.
U.K. Explores Multi-billion Pound Free Trade Deal with China
In announcing that it was time to explore “new opportunities” across the world, U.K. Chancellor Philip Hammond has begun discussions with China on an ambitious free trade deal, which could see greater access to the U.K. economy for major Chinese banks and businesses. Acknowledging “global disappointment” about the Brexit vote, Mr. Hammond said, “What we now need to do is get on with it in a way that minimizes the economic impact on the U.K. economy in the short term and maximizes the benefit in the long term." Chinese state media reported earlier in the month that the Chinese Ministry of Commerce wants to do a U.K. free trade deal. If successful, it will be the first time the U.K. has embarked on such a major project with the second largest economy in the world. In return for greater access to the U.K. for its manufactured products and investment, China would reduce barriers to Britain's service industries like banking and insurance, as well as U.K. goods, and create an important source of export income for Britain. As for what such a deal might look like, senior government sources report that officials are looking at New Zealand's free trade agreement with China, which took four years to negotiate and came into effect in 2008. Hammond noted that care would have to be taken over security and to address concerns about cheap manufactured goods and imports like steel entering the U.K. more easily. Read more information from the BBC’s interview with Chancellor Hammond.
Africa Unveils All-Africa Passport — But So Far Only Two People Have One
A new African Union passport was unveiled at a recent summit in Kigali, Rwanda, promising to make it easier for African businesspeople, tourists and workers to travel around the continent. More than half of the 54 African countries currently require entry visas for other Africans, which can take days or weeks to apply for. While the announcement was lauded as a positive step toward boosting intra-African trade, the only two holders of the passports currently are Rwandan President Paul Kagame and Chadian President Idriss Deby. Read on for more details.
BOJ's Kuroda: Ease Again If Necessary to Hit Two Percent Price Goal
Speaking to reporters during a G20 meeting of finance ministers and central bankers in the Chinese city of Chengdu, Bank of Japan (BOJ) Governor Haruhiko Kuroda said he would ease policy further if necessary to achieve the country’s inflation goal of two percent. He also reiterated a commitment to continue with the current stimulus until prices are anchored. A majority of economists polled by Reuters expect the BOJ to ease policy again in the near future, forecasting a combination of measures in an ongoing attempt to kick-start inflation. "We always examine risk factors for the economy and prices and will take additional easing steps if necessary to achieve the price stability goal,” noted Kuroda. Japanese markets have risen this month on speculation that authorities, who are struggling to revive an economy plagued by decades of anemic inflation, will resort to using “helicopter money,” possibly issuing perpetual bonds to underwrite public debt. But Kuroda eschewed such speculation, noting that “If it means that central banks are directly underwriting government bonds or managing monetary and fiscal policies as one, that would be prohibited in Japan as well as other advanced economies, as lessons from history tell us.” Continue to read the full article for additional information.
How Can Companies Transform Talent Acquisition?
More than 40 percent of HR practitioners surveyed in a recent Alexander Mann Solutions study consider brand communication and enhancing candidate experience to be the top challenges in the APAC region today, followed by sourcing for qualified candidates. The study, Transforming the Talent Acquisition Function, found that in order to attract talent, HR needs to do a better job communicating the employer value proposition across a broad range of age demographics and experience levels.
The study also reported that, among all sourcing channels, internal referrals remain most frequently used by HR executives at 80 percent, followed by social media (78 percent) and paid job boards (76 percent). Although data analytics has been identified as a key driver for effective talent acquisition, only 18 percent of respondents said they are currently using data and analytics software tools during the talent acquisition process. See more survey results and details.
No Brussels Here: How Latin America May Prosper From a Different Kind of Integration
The European Union (EU) has long been cited as a model to follow by democratic Latin American politicians, but talk of integration has thus far been easier to achieve than the actual practice of it. Now, however, just as unity is showing signs of breaking down on one side of the Atlantic, an increase may be taking hold on the other. On average, Latin American countries trade less with each other than Asian countries do, and less than one might expect overall, according to the International Monetary Fund (IMF). Following the evolution of the trade group Mercosur—comprised of full members Argentina, Brazil, Paraguay, Uruguay and Venezuela—and the Pacific Alliance of free-market economies—formed by Chile, Columbia, Mexico and Peru—each country has a trade accord with the United States and with one or more Asian countries. As the center-right has come to power in Argentina and Brazil, both governments are seeking to boost trade and negotiating with the EU. In addition, a recent trip by Argentina’s President, Mauricio Macri, to join the leaders of the Pacific Alliance at their annual meeting prompted speculation about convergence between the alliance and Mercosur. Chile has expressed a keen interest in promoting coordination between the two blocs as well. Bringing the two together would not be without challenge, however, as they are unique in both formal and geopolitical ways. In a world of big blocs, integration has many potential benefits for Latin America, but only if it is done well. The alliance is unique in that it is largely based on political affinity rather than regional proximity. Unlike in Europe, neither history nor geography has encouraged Latin American governments to cede sovereignty to a supranational body. “There’s no Brussels in the region,” notes José Antonio García Belaunde, who was Peru’s foreign minister at the time of the Pacific Alliance’s creation. If it is to happen at all, Latin American integration will be very different from the EU. Click through to read the full account in The Economist.
Indians Help Build Cuba Hotels as Foreign Labor Ban Weakens
Already popular as a low-cost beach resort for Europeans and Canadians, Cuba is seeing a surge in American visitors since the United States and Cuba announced in December of 2014 that they would work to normalize relations. Tourism increased 17 percent in 2015 and was up over 11 percent through June this year, official data shows. With its 2014 passage of a foreign investment law authorizing “special regulations” concerning foreign workers under "exceptional circumstances," the Cuban government removed a key barrier to hiring foreign workers. French construction group Bouygues now employs more than 100 Indian laborers to work on a Cuban hotel construction project to meet the growing tourism demand and is breaking a previous taboo in the Communist-run country on hiring foreign labor. The Bouygues move marks the first time a firm has bypassed Cuba's state-run labor halls to hire foreign workers en masse. Bouygues has already brought 200 Indian workers into Cuba and plans to bring more in the coming months, according to diplomats familiar with the situation and a Havana-based company employee, who noted that they are both training local tradesmen and working directly on the projects themselves. Read on for more information.
Province to Tax Foreign Buyers of Metro Vancouver homes
The British Columbia (B.C.) government has introduced legislation that would add a 15 percent property transfer tax on foreign nationals buying real estate in Metro Vancouver. If enacted, the new rules would take effect 2 August and apply to purchases of homes in Metro Vancouver, excluding the treaty lands of the Tsawwassen First Nation. Provincial Finance Minister Mike de Jong unveiled the tax as part of legislation aimed at addressing low vacancy rates and high real estate prices in southern B.C. All B.C. residents currently pay a one percent tax on the first $200,000 of their purchase, two percent on the remaining value up to $2 million and three percent on any portion above that. The revenue from the additional tax would be used to fund housing, rental and support programs, noted de Jong. Read on for more information.
U.S. Mortgage Rates Uptick in Mid July
The average fixed mortgage rate in the U.S. ticked up slightly across the board this month, but remains near historic lows, according to Freddie Mac's latest Primary Mortgage Market Survey. Sean Becketti, chief economist of Freddie Mac stated, “Post-Brexit volatility tapered off over the last two weeks, allowing interest rates to bounce back a bit from their record (10-year Treasury yield) and near-record (30-year mortgage rate) lows. This week, the 30-year fixed mortgage rate increased 3 basis points to a still-quite-low 3.45 percent. With the Federal Reserve on hold and the UK monetary authority taking at least a one-month breather, we don't expect any significant movement in mortgage rates in the near-term. This summer remains an auspicious time to buy a home or to refinance an existing mortgage.” The 30-year fixed-rate mortgage (FRM) averaged 3.45 percent with an average 0.5 point for the week ending 21 July, 2016, up from last week when it averaged 3.42 percent. A year ago at this time, the 30-year FRM averaged 4.04 percent. Read on for additional stats about other mortgages.
Majority of U.S. Workers Think Traditional 9-to-5 Is a Thing of the Past, Finds New CareerBuilder Survey
According to a new survey from CareerBuilder, nearly 3 in 5 U.S. workers (59 percent) believe that the traditional 9-to-5 full-time workday is a thing of the past.
Forty-five percent of workers say they complete work outside of office hours, and 49 percent say they check or answer emails when they leave work. The national survey was conducted online by Harris Poll on behalf of CareerBuilder between May 11 and June 7, 2016, and included a representative sample of 3,244 full-time workers in the private sector across industries and company sizes. A higher proportion of workers in age groups 45 to 54 (65 percent) and 55 and older (61 percent), agreed that the typical eight-hour workday was a thing of the past than any other age group. By contrast, only 42 percent of workers aged 18 to 24 say the traditional 9-to-5 workday is outdated. Access the news release for additional demographic breakdowns and data.