David Rosenberg: More global economic pain is coming

Factory activity shrinks across Asia, global recession fears mount

NEW YORK/LONDON/HONG KONG (Reuters) – Factory activity slowed in the United States, Europe and Asia last month as an escalating trade war between Washington and Beijing raised fears of a global economic downturn and heaped pressure on policymakers to step up support.

Such growth indicators are likely to deteriorate further in coming months as higher trade tariffs take their toll on commerce and dent business and consumer sentiment, leading to job losses and delaying investment decisions.

Some economists predict a world recession and a renewed race to the bottom on interest rates if trade tensions fail to ease at a Group of 20 summit in Osaka, Japan, at the end of June, when presidents Donald Trump and Xi Jinping could meet.

The U.S.-China trade war, slumping car sales and Britain’s stumbling European Union exit took their toll on manufacturing activity last month.

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