The World Trade Organization said Tuesday it was cutting sharply its forecasts for trade growth this year and next. Trade volumes of goods are expected to rise only 1.2% this year, far below the 2.6% estimate issued in April.
Next year's growth was dropped to 2.7% from 3.0%, but the organization warned that that depends on a return to more normal trade relations. The U.S. and China are in a trade dispute that is hurting the global economy. The sides will hold talks next week but a slew of uncertainties, including the impeachment inquiry into U.S. President Donald Trump, have left businesses reluctant to spend due to uncertainty over the trade war.
Meanwhile, in Britain, Prime Minister Boris Johnson said his government was preparing to make firm proposals for a new divorce deal with the EU. Britain is due to leave the 28-nation bloc at the end of this month, and EU leaders have grown impatient with the lack of detailed plans for maintaining an open border between Northern Ireland and Ireland — the key sticking point to a deal.
Johnson said details would come "very soon" after a governing Conservative Party conference ends Wednesday. In Asian trading, Japan's Nikkei 225 stock index picked up 0.6%, to 21,885.24, despite the release of weak economic data and an increase in the national sales tax that was put off for years out of fears it might stall growth.
The hike in the consumption tax to 10% from 8% is needed to help repair national finances as the government contends with steep increases in costs for elder care as the Japan's population shrinks and ages. But past tax hikes have pushed the economy into recession and this one comes at a time when growth has already been hit by the trade war between the U.S. and China.
Sydney's S&P ASX 200 rose 0.8% to 6,741.10 after the Reserve Bank of Australia followed the lead of the Federal Reserve and other central banks in cutting its key interest rate, to a record low 0.75%.
Chinese markets were closed for the National Day holiday marking the 70th anniversary of the founding of the People's Republic. In Beijing, the event was marked by a military parade showcasing the country's growing might, while in Hong Kong thousands clad in black took to the streets in protests that show no signs of abating after four months of increasingly violent demonstrations.
Elsewhere, India's Sensex dropped 1.1% to 38,227.19 while the Kospi in South Korea climbed 0.5% to 2,072.42. In the next few weeks, companies are scheduled to tell investors how much profit they made during the third quarter. Expectations are generally low again, with analysts forecasting a drop of nearly 4% from a year ago.
Benchmark U.S. crude added 58 cents to $54.65 per barrel in electronic trading on the New York Mercantile Exchange. It lost $1.84 on Monday. Brent crude, the international standard, gained 66 cents to $59.91 per barrel. It fell $1.13 the day before.
The dollar rose to 108.24 Japanese yen from 108.09 yen on Monday. The euro edged up to $1.0902 from $1.0900.