CORONAVIRUS UPDATES:
Ø Total confirmed cases: More than 13,961,427
Ø Total deaths: At least 592,979
Worldometer's
The coronavirus COVID-19 is affecting 213 countries and territories around the world and 2 international conveyances. The day is reset after midnight GMT+0. The list of countries and territories and their continental regional classification is based on the United Nations Geoscheme. Sources are provided under "Latest Updates". Learn more about COVID-19 data
Ø US cases: At least 3,695,302 (+277), and deaths: 141,118
Ø Brazil cases: At least 2,014,738, and deaths: 76,822
Ø India cases: At least 1,005,760 (+123), and deaths: 25,619 (+10)
· Bad loans are set to rise in China
Banks in China are bracing for a jump in bad loans that will weigh down their margins and profits in the coming quarters, according to analysts. Smaller banks are likely to feel the pressure more, they said.
· India becomes third country to cross 1 million coronavirus cases
The number of cumulative coronavirus cases in India exceeded 1 million after recording 34,956 new infections in the last day, reported Reuters. India is only the third country in the world to have crossed that mark after the U.S. and Brazil.
The Indian government led by Prime Minister Narendra Modi implemented a strict nationwide lockdown in March and only started to ease restrictions starting last month. But the lockdown appeared to have done little to slow the outbreak, which has spread further into the countryside and smaller towns, according to Reuters.
· Dollar hugs narrow ranges as virus spikes, yuan falls
The dollar held onto gains against most currencies as worries that a resurgence in the coronavirus is starting to curb economic activity drew safe-haven flows into the U.S. currency.
The yuan fell by the most in three weeks, undone by a steady increase in diplomatic friction between the United States and China.
The euro was well supported by hopes that European officials will agree on fiscal stimulus measures at a meeting starting later on Friday.
Some investors say they are beginning to see troubling signs in recent data that a relentless surge in coronavirus infections is threatening the U.S. economy.
Others point to a widening row between the United States and China as reason to avoid risky trades, which should keep the dollar in demand for the time being.
“The dollar looks like a good safe haven now because of worries about a return to coronavirus lockdowns,” said Minori Uchida, head of global market research at MUFG Bank.
“But I worry that the dollar will start to lose this status if long-term Treasury yields continue to fall.”
The dollar stood at 107.24 yen in Asia on Friday, following a 0.3% gain in the previous session.
The euro held steady at $1.1381 and was marginally higher against the British pound at 90.60 pence.
Sterling was little changed at $1.2560 on Friday.
In addition, U.S. President Donald Trump’s administration is considering banning travel to the United States by all members of the Chinese Communist Party, according to a person familiar with the matter, in a move that would surely put further strain on relations between Washington and Beijing.
This week the United States has ratcheted up the pressure on China in a wide-ranging dispute over civil liberties, access to technology, and territorial claims that some analysts liken to a new cold war.
The onshore yuan fell by the most since June 24 to 7.0041, reflecting the growing concern about the Sino-U.S. relationship.
· USD/JPY: Off session highs, hourly chart shows a double bottom pattern
USD/JPY has carved out a double bottom pattern on the hourly chart. The pullback from session highs puts a question mark on the sustainability of the gains in the S&P 500 futures, The Shanghai Composite, and stocks in Hong Kong.
The USD/JPY pair maintains its neutral stance, as, in the 4-hour chart, the pair continues to hover around directionless moving averages, all of them confined to a 30 pips’ range. The 200 SMA stands flat around 107.50, and the pair has been unable to surpass it ever since the week started. Technical indicators advanced, with the RSI heading higher within positive levels, but the Momentum stuck around its midline. Nevertheless and given the sour market mood, chances of further gains seem quite limited for this Friday.
Resistance levels: 107.50 107.90 108.30
Support levels: 106.95 106.60 106.20
· China’s economy is recovering. That’s good news for Southeast Asia
Southeast Asian nations will likely benefit from China’s economic rebound as the country commands a “lion’s share” of regional exports, one economist said this week.
China on Thursday said its gross domestic product grew by 3.2% for the second quarter of 2020, compared to the same period a year ago. The country’s GDP shrank by 6.8% in the first quarter, when lockdowns were in place due to the coronavirus outbreak. Analysts were GDP to grow only 2.5% for the April to June quarter.
“While numerous challenges remain, the uptick would rekindle hopes that China’s economy can help to pull others along,” Wellian Wiranto, an economist at OCBC Bank, wrote in a note on Thursday.
“The fact that China commands a lion’s share of ASEAN exports ... takes on extra importance now,” he said, referring to the Association of Southeast Asian Nations.
That dependence on China was a “painful liability” in the first quarter, but the recent uptick has now turned it into a “key asset,” he added.
· ECB survey points to shallower recession, stronger rebound
The euro zone economy may contract less this year than the European Central Bank had forecast and its recovery could also be quicker, the bank’s Survey of Professional Forecasters showed on Friday.
The quarterly survey sees the economy shrinking by 8.3% this year, a downgrade from its May projection for a 5.5% drop but a more benign outcome than the ECB staff’s own estimate for an 8.7% drop. For next year, growth is seen at 5.7%, above the ECB’s staff’s 5.2% estimate in June.
Although the euro zone suffered its biggest recession in generations, recent data suggest the economy bottomed out in April or May and a recovery is now underway, even if it is bound to be choppy, uneven and prone to setbacks.
The survey was also more optimistic about inflation as it sees 2020 price growth at 0.4% against the ECB’s 0.3% projection while inflation in 2021 is seen at 1% as against the ECB’s 0.8% prediction.
Growth projections for 2025, deemed as the “longer-term”, were left unchanged at 1.4% but the longer-term inflation forecast was cut to 1.6% from 1.7%, short of the ECB’s target for inflation at just below 2%.
· EU recovery deal possible with political will, Michel says
A deal on the next European budget and an EU recovery fund is possible at a summit in Brussels from Friday, the chairman of EU leaders said.
“With political courage, it’s possible to reach an agreement,” Charles Michel told reporters on arrival.
· France's Macron says he is confident but cautious on EU deal
French President Emmanuel Macron said on Friday he was confident but cautious that the European Union would reach an agreement on a recovery plan ahead of a European Council meeting in Brussels.
“We will do everything we can to find an agreement”, Macron said on his arrival at the meeting.
· Oil prices slip as clouds gather over fuel demand, looser supply curbs
Oil prices edged lower on Friday, with trading marked by growing uncertainty about global recovery in fuel demand as new COVID-19 cases surge in several countries just as major producers get set to loosen production curbs.
Brent crude futures LCOc1 fell 11 cents, or 0.3%, to $43.26 a barrel by 0610 GMT, and U.S. West Texas Intermediate (WTI) crude CLc1 dropped 4 cents, or 0.1%, to $40.71.
Reference: CNBC, Reuters
Thai
Eng