· CORONAVIRUS CRISIS:
Ø Total confirmed cases: More than 3,818,791
Ø Total deaths: At least 264,811
Ø The coronavirus COVID-19 is affecting 212 countries and territories around the world and 2international conveyances: the Diamond Princess cruise ship harbored in Yokohama, Japan, and the Holland America's MS Zaandam cruise ship.
Ø US cases: At least 1,262,887 (+25,254) and deaths: 74,795 (+2,524)
Ø Spain cases: At least 253,682 (+3,121) and deaths: 25,857 (+244)
Ø Italy cases: At least 214,457 (+1,444) and deaths: 29,684 (+369)
Ø Thailand cases: At least 2,989 (+1) and deaths: 55
· US dollar, yen gain amid bleak global economic data
The safe-haven yen and dollar rose on Wednesday, as investors sought refuge in these currencies in the wake of dire global economic numbers.
The yen rose to a seven-week high against the dollar and a 3-1/2-peak versus the euro. The dollar, meanwhile, advanced to its highest in more than a week against a basket of major currencies.
Manufacturing data in the euro zone and the UK painted a bleak picture, undermining the single European currency and sterling. U.S. private payrolls data also showed a record of more than 20 million jobs lost in April based on the ADP National Employment Report, but the dollar held gains.
“Safe havens are likely to hold the upper hand as many brace for the impact of the late week jobs data,” said Joe Manimbo, senior market analyst, at Western Union Business Solutions in Washington.
The ADP report sets the stage for Friday’s non-farm payrolls report, with a consensus forecast of 22 million jobs and an unemployment rate of 16%, according to a Reuters poll.
“Our advice: prepare for the worst, as we are likely to see by far the biggest monthly decline in payrolls on record,” said Payden & Rygel’s chief economist Jeffrey Cleveland. “Unlike 2008, or the 1930s for that matter, when most of the job losses were permanent, requiring a painful, slow process of reallocating labor to new areas, if the recent rise in unemployment is temporary, it’s possible the economy will rebound more quickly,” he added.
In Europe, euro zone business activity almost ground to a halt last month and retail sales in the euro zone also suffered their largest decline on record in March amid government-imposed lockdowns In the UK, British construction suffered its sharpest decline on record, more than twice as large as the previous month, even though general construction work was not ordered by the government to stop.
In afternoon trading, the dollar index rose 0.3% to 100.07, climbing earlier to a more than one-week high of 100.200.
Against the yen, the dollar fell 0.4% to 106.10 yen, after dropping to a seven-week low of 106.06 yen.
The euro fell 0.7% to 114.60 yen, earlier plunging to 114.43 yen, the lowest since November 2016.
The euro was down 0.3% against the dollar at $1.0801, hitting a nearly two-week low earlier.
It resumed its decline after a court decision challenged German participation in the euro zone’s stimulus programme.
Germany’s highest court on Tuesday gave the European Central Bank three months to justify purchases under its bond-buying programme, or lose the Bundesbank’s participation in one of its main stimulus schemes. The fact that speculators are now long the euro also undermines its current levels, analysts said.
Leveraged funds have trimmed their long positions on the euro, but the number of longs is still close to their two-year highs.
· U.S. private payrolls dive by a record 20.2 million
U.S. private employers laid off a record 20.236 million workers in April as mandatory business closures in response to the novel coronavirus outbreak savaged the economy, setting up the overall labor market for historic job losses last month.
The plunge in private payrolls shown in the ADP National Employment Report on Wednesday suggested that national lockdowns to slow the spread of COVID-19, the respiratory illness caused by the virus, could leave lasting scars on the economy, even as large parts of the country reopen non-essential businesses.
Data for March was revised to show private payrolls decreasing by 149,000 jobs instead of the previously reported 27,000, which was the first decline since September 2017.
· Pompeo blames China for hundreds of thousands of virus deaths, denies inconsistency
U.S. Secretary of State Mike Pompeo on Wednesday renewed his aggressive criticism of China, blaming it for the deaths of hundreds of thousands of people from the coronavirus and demanding again that it share information about the outbreak.
“They knew. China could have prevented the deaths of hundreds of thousands of people worldwide. China could have spared the world descent into global economic malaise,” Pompeo told a State Department news conference.
“China is still refusing to share the information we need to keep people safe.”
· China says tariffs should not be used as a weapon after U.S. threats
China said on Wednesday tariffs should not be used as a weapon after U.S. President Donald Trump threatened to impose more of them in retaliation for China’s handling of the novel coronavirus.
Tariffs, in general, hurt all parties involved, Chinese foreign ministry spokeswoman Hua Chunying told reporters at a daily briefing.
“So the United States should stop thinking it can use tariffs as a weapon and a big stick to coerce other countries,” she said.
Trump said on Friday that raising tariffs on China was “certainly an option” as he considers ways to retaliate for the coronavirus pandemic.
· EU executive underlines ECB independence after German court ruling
The European Commission repeated on Wednesday that European Union law and courts had primacy over national ones after a German court ruling on Tuesday and stressed the European Central Bank was independent.
“We reaffirm the primacy of EU law. The rulings of the European Court of Justice are binding on all national courts... We have always respected and we fully support the independence of the ECB in its implementation of monetary policy,” European Commissioner for Economic and Financial Affairs Paolo Gentiloni told a news conference.
Germany’s constitutional court ruled on Tuesday that the Bundesbank must stop buying government bonds under the ECB’s long-running stimulus scheme within three months unless the ECB can prove the purchases are needed.
· Bank of England expected to hold off on fresh stimulus for now
The Bank of England is unlikely to add to its enormous stimulus for Britain’s economy on Thursday, but the historic hit to output and jobs that it is set to spell out will raise the prospect of yet more bond-buying before long.
In March, as much of the world economy went into a coronavirus lockdown, the BoE ramped up its asset purchase programme by a record 200 billion pounds ($247 billion) to counter a surge in borrowing costs on financial markets.
Similar to other central banks, the BoE is now burning through 13.5 billion pounds of its expanded war-chest every week, helping the government’s surge in public spending but putting it on course to use up its firepower by early July.
· UK could start lifting coronavirus lockdown measures from Monday, PM says
The U.K. could start easing its coronavirus lockdown restrictions as early as Monday, Prime Minister Boris Johnson said Wednesday.
“We will want, if we possibly can, to get going with some of these measures on Monday,” Johnson told Parliament in his first Prime Minister’s Questions session since falling ill with Covid-19.
He added that a statement will be made on Sunday after the government reviews the latest data, adding it would be a “good thing” if people knew what to expect the following day.
Britain now has the highest Covid-19 death toll in Europe, according to the latest official figures, climbing past Italy which, alongside Spain, has been among the worst-affected countries globally.
· WHO warns against rushed end to coronavirus lockdowns
The World Health Organization (WHO) warned on Wednesday that countries emerging from restrictions to halt the new coronavirus must proceed “extremely carefully” or risk a rapid rise in new cases.
Director-General Tedros Adhanom Ghebreyesus said countries needed to ensure they had adequate measures to control the spread of the COVID-19 respiratory disease like tracking systems and quarantine provision.
“The risk of returning to lockdown remains very real if countries do not manage the transition extremely carefully and in a phased approach,” he said at a virtual briefing in Geneva.
“If lockdown measures are lifted too quickly, the virus can take off,” Van Kerkhove told the briefing.
Government-ordered lockdowns have become increasingly unpopular as countries suffer rising unemployment and economic activity grinds to a halt.
The eurozone economy will contract by a record 7.7% this year because of the pandemic, while U.S. private employers laid off 20.2 million workers last month as business shut their doors.
· Oil falls to below $30/bbl as glut grows, output cuts eyed
Oil dropped 4% to below $30 a barrel on Wednesday as U.S. crude stockpiles ticked up and diesel inventories swelled, offsetting OPEC-led cuts in production and hopes for a recovery in demand as some countries ease coronavirus lockdowns.
Brent settled down $1.25, or 4%, at $29.72 a barrel, the first loss after six consecutive sessions of gains. West Texas Intermediate (WTI) crude fell 57 cents a barrel to $23.99.
Brent crude has almost doubled since hitting a 21-year low on April 22. But the market was cautiously eyeing a deal led by the Organization of the Petroleum Exporting Countries to cut output by a record 9.7 million barrels per day from May 1, equivalent to about 10% of world demand before the coronavirus crisis led to a slide in consumption and prices.
Iraq has yet to inform its regular oil buyers of cuts to its exports, suggesting it is struggling to fully implement the OPEC deal with Russia and other producers on a record supply cut, traders and industry sources said.
Less than full compliance by Iraq, as well as by smaller producers such as Nigeria and Angola, could hurt the OPEC+ group’s efforts, even as Russia’s output in the first five days of May fell close to its production target, two sources familiar with the data told Reuters.
Signalling a slow recovery in demand, data from the Energy Information Administration showed U.S. crude and distillate inventories rose last week.
Crude inventories rose for a 15th week in a row, increasing by 4.6 million barrels, the EIA said, which was less than analysts’ expectations in a Reuters poll for a 7.8 million-barrel rise.
· Trump vetoes Iran war powers resolution
President Donald Trump on Wednesday vetoed legislation passed by both houses of Congress to limit a president’s ability to wage war against Iran, as Trump wages a campaign of maximum pressure against the Islamic Republic.
“This was a very insulting resolution, introduced by Democrats as part of a strategy to win an election on November 3 by dividing the Republican Party,” Trump said in a statement released by the White House. “The few Republicans who voted for it played right into their hands.”
Reference: CNBC, Reuters
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