· Dollar firms as weak China retail sales sound warning
The dollar found support on Thursday as simmering Sino-U.S. tensions and weak Chinese consumption data knocked investors’ faith in a fairly swift global economic recovery from the coronavirus crisis.
Surging U.S. virus cases also dampened sentiment and weighed on equity markets as focus shifts to Europe, and the region’s recovery plans, as well as rising global tensions.
The New York Times also reported his administration is considering a sweeping ban on travel to the United States by Chinese Communist Party members, citing four unnamed people with knowledge of such discussions.
The euro has pulled back from a four-month top hit overnight, but remained supported in Asia at $1.1402.
The ECB is all but certain to keep policy on hold on Thursday, which would keep pressure on political leaders to agree on a recovery plan at a Friday-Saturday conference in Brussels.
Any deal requires bridging a gap between wealthy, thrifty northern countries and the high-debt south that has taken the brunt of the COVID crisis.
· ECB to take pause even as pandemic worries rise
Taking a pause after a series of extraordinary moves, the European Central Bank is all but certain to keep policy on hold on Thursday, scrutinizing instead the effectiveness and any unwanted side-effects of its crisis-fighting measures.
Tackling the biggest economic collapse in living memory, the ECB has bought record amounts of debt and paid banks to lend out its cash, all in hope of salvaging most of the bloc’s economy until Europe is ready to reopen after the coronavirus pandemic.
But its decisions were also made in haste and often guided by acute market stress, like the blowout in Italian borrowing costs this spring, leading some critics to argue that it is bending its own rules too far.
ECB inaction would also keep up pressure on European Union leaders to finally agree on long-delayed fiscal support, a much-needed measure that would reduce the burden on monetary policy.
· China says UK ban on Huawei 'severely' damages investment confidence
Britain’s “discriminatory” ban on Huawei has severely damaged China’s investment confidence in the country, China’s commerce ministry said on Thursday, adding it will take necessary measures to defend Chinese firms’ legal rights.
Prime Minister Boris Johnson on Tuesday ordered Huawei equipment to be purged completely from Britain’s 5G networks by the end of 2027.
· European new car sales down 24.1% year-on-year in June: ACEA
European passenger car sales slumped in June compared to a year ago but showed an improvement since May with the easing of coronavirus lockdown measures across the region, industry data showed on Thursday.
In June, new car registrations dropped by 24.1% year-on-year to 1,131,843 vehicles in the European Union, Britain and the European Free Trade Association (EFTA) countries, statistics from the European Auto Industry Association (ACEA) showed.
In May sales slumped 56.8% on the year.
Sales fell in all European markets except France where they rose 1.2% in June thanks to government incentives for low-emission vehicles that were introduced at the beginning of the month.
Registrations in Germany tumbled 32.3% and slumped in Spain, Italy and Portugal with drops of 36.7%, 23.1% and 56.2% respectively.
· China says its economy grew 3.2% in the second quarter
a reported that the country’s GDP grew by 3.2% in the second quarter of this year, compared to a year ago — beating analysts’ expectations and rebounding from the first quarter’s contraction.
It comes as lockdowns to contain the coronavirus outbreak in China eased, and as Beijing rolled out stimulus measures to prop up its economy.
Economists polled by Reuters expected gross domestic product to have grown modestly at 2.5% in the April to June quarter.
China’s first quarter GDP contracted by 6.8% in 2020 from a year ago as the world’s second largest economy took a huge hit from the coronavirus outbreak. This was the country’s first GDP decline since at least 1992, when official quarterly records started.
Signs of recovery:
Recent data out of China show some signs of recovery. Trade numbers in June showed that China’s dollar-denominated exports and imports rose. Manufacturing activity in June also expanded compared to May, two different sets of surveys showed.
Zhuang said he expected China’s GDP recovery to be sustainable in the next two quarters at least, as the domestic economy seems to be doing “fine” with growth in infrastructure and cross-provincial travel reopened, he told CNBC’s “Street Signs.”
Zhuang said a recovery of about 5% in the next two quarters is “definitely foreseeable.” China’s full-year GDP growth was 6.1% in 2019.
· China says hopes trade deal reached with U.S. can still be implemented
China said on Thursday it hopes the Phase 1 trade deal it reached with the United States can still be implemented and reiterated its willingness to stick to the agreement despite recent U.S. sanctions against Chinese officials and firms.
Chinese foreign ministry spokeswoman Hua Chunying told reporters during a daily briefing that some in the United States were always oppressing and bullying China and said Beijing must act to reject and respond to such practices.
· Singapore's financial system robust despite worst downturn, central bank chief says
Singapore’s financial system remains robust and resilient even as the economy suffers it’s most severe downturn due to the coronavirus pandemic, central bank chief Ravi Menon said on Thursday.
Data this week showed that the trade-reliant economy plunged into recession in the second quarter after contracting by a record 41.2%.
There was substantial uncertainty over the global economic outlook, the Monetary Authority of Singapore’s (MAS) managing director told a news conference after the central bank’s annual report was released.
· Australia unemployment hits 22-year high though jobs surge
Australia’s jobless rate edged up even though employment surged by a record in June, as more people searched for work encouraged by the re-opening of the economy from the coronavirus lockdown.
Employment rose by a blockbuster 210,800 in June following hefty declines in April and May, Australian Bureau of Statistics (ABS) data showed on Thursday.
That handily beat forecasts for a gain of 112,000 in a Reuters poll.
Yet, the jobless rate still hit a 22-year high of 7.4% because the surge in jobs growth was not enough to offset the increase in the number of people who went looking for work.
The participation rate in June rose by 1.3 percentage points to 64%, the highest since April, driving unemployment higher.
· Australia unemployment hits 22-year high though jobs surge
Australia’s jobless rate edged up even though employment surged by a record in June, as more people searched for work encouraged by the re-opening of the economy from the coronavirus lockdown.
Employment rose by a blockbuster 210,800 in June following hefty declines in April and May, Australian Bureau of Statistics (ABS) data showed on Thursday.
That handily beat forecasts for a gain of 112,000 in a Reuters poll.
Yet, the jobless rate still hit a 22-year high of 7.4% because the surge in jobs growth was not enough to offset the increase in the number of people who went looking for work.
The participation rate in June rose by 1.3 percentage points to 64%, the highest since April, driving unemployment higher.
· With inflation in India ticking higher it may be time for RBI to pause
With India’s economic growth sputtering, the Reserve Bank of India was expected to maintain a rate-cutting cycle, but an uptick in near-term inflation could give the central bank’s Monetary Policy Committee reason to pause for now.
· Thai PM to reshuffle cabinet by next month after economic team quits
Thailand’s prime minister said on Thursday a cabinet reshuffle will take place by next month after the resignation of members of his economic team, including the finance minister.
“We have to reshuffle the cabinet so there won’t be a gap. It must be done as quickly as possible... no later than next month,” Prime Minister Prayuth Chan-ocha told reporters.
· Oil prices ease after OPEC+ agrees to taper oil supply curbs
Oil prices eased on Thursday after OPEC and allies such as Russia agreed to taper record supply curbs from August, though the drop was cushioned by hopes for a swift U.S. demand pick-up after a big drawdown from the country’s crude stocks.
Brent crude LCOc fell cents, or , to a barrel by GMT, and U.S. West Texas Intermediate (WTI) crude CLc dropped cents, or , to a barrel. Prices rose the previous day, helped by the U.S. crude inventories drop.1330.8%$43.4606461421.0%$40.78
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, agreed on Wednesday to scale back oil production cuts from August as the global economy slowly recovers from the coronavirus pandemic.
OPEC+ has been cutting output since May by million barrels per day, or of global supply, but from August, cuts will officially taper to million bpd until December.9.710%7.7
Data from the Energy Information Administration showed U.S. crude inventories fell million barrels last week, shrinking much more than the million-barrel drop expected by analysts in a Reuters poll. [EIA/S]7.5 2.1
Reference: CNBC, Reuters
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