· Dollar weak vs. euro as month-end flows weigh
The dollar edged lower against the euro on Friday, hurt by month-end flows and as the common currency continued to enjoy a boost from the European Union’s recently announced plan to prop up the bloc’s coronavirus-hit economies with a 750 billion-euro (673 billion pounds) recovery fund.
The greenback was little moved after U.S. President Donald Trump said on Friday he was directing his administration to begin the process of eliminating special treatment for Hong Kong, in response to China’s plans to impose new security legislation in the territory.
“I think traders were bracing for the possibility of new tariffs or sanctions or a pullback on Phase 1 which of course didn’t happen,” said John Doyle, vice president of dealing and trading at Tempus Inc in Washington.
The euro was 0.13% higher at $1.1091, its fourth straight day of gains. The euro’s rally this week has pushed it over its 200-day moving average for the first time since late March and lifted it about 1.7% for the week, its best weekly gain in nine weeks.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 98.217 after declining from levels above 99.6 last week.
The Japanese yen traded at 107.68 per dollar after seeing turbulent moves last week as it swung from levels above 107.7 to about 107.1.
· U.S. crisis deepens as protests erupt over police brutality amid deadly pandemic and record unemployment
Nearly 40 cities and Washington, DC, have imposed curfews tonight in response to violent protests across the country this weekend.
Additionally, as of Sunday morning, approximately 5,000 National Guard members have been activated in 15 states and Washington, DC, with another 2,000 prepared to activate if needed.
Hundreds of people were arrested over the weekend as protesters and police clashed in cities across America after the killing of George Floyd, an unarmed black man, at the hands of Minneapolis police sparked more than 100 protests, rallies and vigils, according to NBC News.
Mayors of major cities from Los Angeles to Philadelphia to Atlanta imposed curfews and at least 12 states, as well as Washington, D.C., activated National Guard troops in an effort to keep the peace, but protests in several cities descended into violence again as tensions boiled over.
Derek Chauvin, the officer filmed kneeling on Floyd’s neck, was arrested and charged with murder and manslaughter.
The social unrest over police brutality comes in the midst of the ongoing coronavirus pandemic, which has killed more than 100,000 Americans and led to the worst unemployment since the Great Depression. The unemployment rate hit 14.7% in April, a post-WWII record, and is likely to rise above 20%.
· Retailers already hit by coronavirus board up as U.S. protests rage
Retail giant Target Corp said on Sunday it shuttered stores across the United States as retailers already reeling from closures because of the coronavirus pandemic shut outlets amid protests that included looting in many U.S. cities.
· Trump may punish China — but it won’t be very damaging, says Chinese economist
U.S. President Donald Trump could punish Beijing for eroding Hong Kong’s autonomy and other human rights abuses — but his options won’t be very damaging to China, said a leading Chinese economist on Friday.
Hong Kong has special privileges under American law, which treats the territory more favorably than the mainland, and has so far exempted the Asian financial hub from punishing tariffs that the U.S. has imposed on China. Observers say the U.S. can revoke that special status for Hong Kong and that would hurt China, which relies on Hong Kong as a bridge to the rest of the world.
But Li Daokui, an economics professor from Tsinghua University, told CNBC that any threats to revoke Hong Kong’s special privileges from the U.S. won’t be “very much credible” because American businesses would get hurt too.
· North Korea says it supports China's measures on Hong Kong
North Korea on Saturday expressed its support for China’s decision to impose new national security laws in Hong Kong, calling it a “legitimate step” to safeguard the state security.
· Trump postpones the G-7 summit and seeks to add countries to the invitation list
U.S. President Donald Trump said on Saturday he would postpone a Group of Seven summit he had hoped to hold next month until September or later and expand the list of invitees to include Australia, Russia, South Korea and India.
Speaking to reporters on Air Force One during his return to Washington from Cape Canaveral in Florida, Trump said the G7, which groups the world’s most advanced economies, was a “very outdated group of countries” in its current format.
· Global coronavirus cases surpass 6 million
Global coronavirus cases surpassed 6 million on Saturday, according to a Reuters tally, as Latin America reported a grim milestone of 50,000 deaths from the disease.
Countries such as Brazil, Chile and Mexico are struggling to stem the spread of the virus, which initially peaked in China in February before large-scale outbreaks followed in Europe and the United States.
The COVID-19 respiratory illness has claimed more than 367,000 lives worldwide, though the true number is thought to be higher as testing is still limited and many countries do not include fatalities outside of hospitals.
· IMF says pandemic may skew economic data and cause them to be less accurate
Key economic indicators may be skewed, and perhaps less accurate, as a result of the coronavirus pandemic, according to the International Monetary Fund.
“Accurate and timely economic data are crucial for informing policy decisions, especially during a crisis. But the COVID-19 pandemic has disrupted the production of many key statistics,” the fund said in a blog post this week.
· Trump says the U.S. will cut ties with World Health Organization
President Donald Trump announced Friday that the United States will cut ties with the World Health Organization.
“China has total control over the World Health Organization despite only paying $40 million per year compared to what the United States has been paying, which is approximately $450 million a year,” Trump said during a news conference in the White House Rose Garden.
“The world needs answers from China on the virus. We must have transparency. Why is it that China shut off infected people from Wuhan to all other parts of China?” he added. “It didn’t go to Beijing, it went nowhere else, but they allowed them to freely travel throughout the world, including Europe and the United States.”
· EU urges U.S. to reconsider decision to cut ties with WHO
The European Union urged the United States on Saturday to reconsider its decision to cut ties with the World Health Organization over its handling of the coronavirus pandemic.
· China's May factory activity cools as weak demand curbs output
China’s factory activity grew at a slower pace in May but momentum in the services and construction sectors quickened, pointing to an uneven recovery in the world’s second-largest economy as businesses emerge from coronavirus-led shutdowns.
Manufacturing slowed for a second month although activity has revived from record lows in February, when the government imposed tough travel restrictions, quarantine rules and factory suspensions to curb the spread of the respiratory illness.
The official manufacturing Purchasing Manager’s Index (PMI) eased to 50.6 in May from 50.8 in April, National Bureau of Statistics data showed on Sunday, but held above the 50-point mark that separates expansion from contraction on a monthly basis. Analysts had expected a PMI reading of 51.
Export orders logged the fifth consecutive month of contraction, with a sub-index standing at 35.3 in May, well below the 50-point mark, as the coronavirus pandemic continued to take a toll on global demand.
· Oil surges 5% on U.S.-China trade optimism, falling crude output
Oil prices soared on Friday, with U.S. futures closing out May with record monthly gains, on hopes that the U.S.-China trade deal would remain intact and on falling crude production.
West Texas Intermediate crude futures CLc1 for July delivery settled at $35.49 a barrel, jumping $1.78, or 5.3%.
July Brent crude LCOc1 closed at $35.33 a barrel, gaining 4 cents. However, the more active August LCOc2 contract ended at $37.84, rising $1.81, or roughly 5%.
Both benchmarks saw steep monthly rises due to falling global production and expectations for demand growth as parts of the United States, including New York City, and other countries move to reopen after coronavirus-related lockdowns.
Reference: Reuters, CNBC, CNN, Worldometers
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