· Dollar falls as selling pressure builds on multiple fronts
The dollar extended its fall to hit fresh lows against a range of currencies on Tuesday, after a triple blow of retreating yields, soft U.S. economic data and a dip in safe-haven demand exerted broad selling pressure.
The yuan firmed to 6.9246 per dollar, hitting a level unseen since March 9, despite the Trump administration flagging a further tightening of restrictions against Chinese tech gear maker Huawei.
The euro last sat at $1.1891, just below a recent two-year high of $1.1916.
The Japanese yen rose back past 106-per-dollar to 105.63 after a 2.6 basis point drop in benchmark U.S. 10-year government bond yields overnight.
The British pound last sat at $1.314 as investors watch the latest round of Brexit negotiations, with the future of London’s financial institutions’ access to the European market in focus.
Against a basket of currencies the dollar sat at an eight-session low of 92.634.
Among G10 currencies, the kiwi was the laggard as New Zealand’s largest city remains under lockdown and anticipation of future monetary easing weighs on the currency.
· Treasury yields edge lower as investors await economic data, auctions
U.S. government debt prices were higher on Tuesday morning, as investors monitored a fresh batch of economic data and Treasury auctions.
At around 2:05 a.m. ET, the yield on the benchmark 10-year Treasury note was lower at 0.6704%, while the yield on the 30-year Treasury bond was also down at 1.4147%. Yields move inversely to prices.
Market focus is largely attuned to simmering U.S.-China tensions and ongoing concerns about the economic impact of the coronavirus pandemic.
· Trump rejects proposal to cut military healthcare by $2.2 billion
U.S. President Donald Trump said late on Monday he has rejected a Pentagon proposal to cut military healthcare by $2.2 billion.
Politico reported politi.co/2E5GqQS on Sunday that Pentagon officials working on Defense Secretary Mark Esper's cost-cutting review of the U.S. Defense Department had proposed slashing military healthcare by $2.2 billion.
The cut proposed to the military health system over the next five years came as part of an effort by Esper that started last year with the goal of eliminating inefficiencies within the Pentagon’s coffers, Politico reported
Politico also said, however, that senior defense officials had argued that such cuts would have hurt the healthcare of millions of military personnel and their families amid the ongoing coronavirus outbreak.
Reuters reported last week that Trump had privately discussed with advisers the possibility of replacing Esper after the November election following a growing number of differences between them.
· BHP profit falls 4% as it warns of slowing growth outside China*
BHP Group on Tuesday said it expects most major world economies except China to bear the brunt of a coronavirus-led downturn this year, reporting a 4% drop in annual profit that missed analysts’ estimates.
While miners have seen green shoots emerge from an economic pickup in the world’s top metals user, as well as a boost in infrastructure spending, the risk of new virus outbreaks around the world threatens to undermine growth, BHP said.
The warning came as BHP reported underlying profit attributable from continuing operations for the year ended June 30 that fell to $9.06 billion below estimates of $9.42 billion, according to Refinitiv IBES data.
· Hong Kong leader says won't take U.S. sanctions against her to heart
Hong Kong leader Carrie Lam said on Tuesday she was not too bothered about U.S. sanctions against her but the Chinese-ruled city will complain to the World Trade Organization (WTO) about a new U.S. requirement on Hong Kong-made products.
The United States this month imposed sanctions on Lam and other current and former Hong Kong and mainland officials whom Washington accuses of curtailing political freedom in the financial hub.
· Singapore plans another $5.8 billion to mitigate the pandemic’s economic damage
Singapore’s Deputy Prime Minister Heng Swee Keat announced another 8 billion Singapore dollars ($5.8 billion) worth of stimulus to counter the economic damage caused by the coronavirus pandemic.
Among the measures announced is an extension of a wage subsidy program by up to seven months. The amount of support that companies can receive depends on the “projected recovery” of the sectors they’re in, said Heng, who’s also finance minister and coordinating minister for economic policies.
ther support includes additional relief for the aviation sector and “tourism credits” for Singaporeans to boost domestic tourism, the minister said.
Singapore reported one of the worst second-quarter economic contractions in Asia. The open and trade-dependent economy shrank by 13.2% year over year in the April-to-June period — its worst on record, according to official statistics.
· Thailand’s success in containing the coronavirus may not help its economy much
Thailand’s relative success in containing the coronavirus may do little to chart a smooth recovery for its economy, which could be one of Asia’s worst performing this year after the pandemic caused a slump in tourist arrivals, said economists.
Adding to concerns are intensifying anti-government protests that some analysts said could distract authorities from their priority of keeping the economy going.
Thailand on Monday reported its deepest economic contraction since the Asian financial crisis in 1998. The Southeast Asian economy shrank by 12.2% on year in the second quarter — better than the 13.3% contraction forecast by a Reuters poll.
· Oil lowers as suppliers seek to hold promises on output cuts
Oil prices slipped on Tuesday, though they mostly held onto overnight gains after OPEC+ said the producer grouping is almost fully complying with output cuts to support prices amid a drop in demand for fuels due to the coronavirus pandemic.
Brent crude was down 22 cents, or 0.5%, at $45.15 a barrel by 0322 GMT, after gaining 1.3% on Monday.
U.S. crude was down 23 cents, or 0.5%, at $42.66 a barrel, having risen 2.1% in the previous session.
Compliance with OPEC+ oil output cuts was seen at around 97% in July, two OPEC+ sources told Reuters. The oil producers curbed output by record levels to reduce worldwide inventories, as demand collapsed from the pandemic.
The Organization of the Petroleum Exporting Countries and allies known as OPEC+ in August reduced their agreed cuts to 7.7 million barrels per day from 9.7 million bpd previously as prices started picking up in recent months.
Reference: CNBC, Reuters
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