· Euro wilts as coronavirus lockdown worries hurt sentiment
The euro fell against the dollar on Wednesday following a media report that France’s government was leaning toward reinstating a national lockdown to curb a resurgence in coronavirus cases.
The dollar, however, gave up early gains and fell against the yen as sentiment turned bearish due to uncertainty about the outcome of the U.S. presidential election next week.
He added that he does not expect the dollar to gain much against other currencies, “because people have been overly complacent about how markets will react after the U.S. election”.
The euro EUR=EBS fell 0.14% to $1.1780 on Wednesday, down for a third consecutive session.
Sterling GBP=D3 held steady at $1.3043, supported by hopes for a last-minute trade deal between Britain and the European Union.
The dollar fell to 104.23 yen JPY=D3, approaching a one-month low.
Traders are bracing for more volatility in currency markets as the virus spreads in Europe, Britain, and the United States, fanning concerns that economic growth will weaken once again.
Sentiment for the greenback has also weakened after Trump conceded that an additional round of U.S. fiscal stimulus is unlikely before the election.
The onshore yuan CNY=CFXS fell slightly to 6.7097 against the dollar, extending a pullback from a 27-month high hit last week as the People's Bank of China takes steps to curb the currency's appreciation.
· FOCUS ON U.S. ELECTIONS
Traders, however, say the bigger focus is on the United States, which is also struggling to contain the coronavirus as people vote early before elections on Nov. 3.
Polls show Democrat rival Joe Biden has a lead over incumbent Republican President Donald Trump, but some investors are sceptical because the polls did not predict Trump’s victory four years ago.
· Coronavirus cases surge in swing states as early voting kicks into high gear
Coronavirus cases are spiking in the most fiercely contested battlegrounds of the presidential election, just as voters cast their ballots in droves.
Presidnt Donald Trump and former Vice President Joe Biden have one week left until Election Day, and early voting is in full swing in dozens of states. Turnout levels are breaking records: More than 69 million Americans have already voted, over half the total of all voters in 2016. Roughly one-third of early voters this year did so in person.
But the highly contagious coronavirus, a central issue of the 2020 campaign, is also on the rise in some key swing states where in-person
· EU warns not enough Covid vaccines for all in Europe until 2022
Only a share of the European Union population can be inoculated against the new coronavirus before 2022, should an effective vaccine be available, EU officials said in an internal meeting, as governments remain split on vaccination plans.
The warning comes in spite of the fact that the 27-nation bloc, with a population of 450 million, has secured more than 1 billion doses of potential Covid-19 vaccines from three drugmakers. It is negotiating the booking of another billion vials with other companies.
As a global scramble to secure shots accelerates, experts caution that not every potential vaccine may prove to be effective.
· The Reserve Bank of Australia is widely expected to lower interest rates and expand its government debt purchases at its next meeting on Nov. 3.
· China is a competitor to the U.S. — not an adversary, professor says
Democratic presidential candidate Joe Biden is right in characterizing China as a competitor rather than an adversary, a professor told CNBC this week.
Anthony Arend of Georgetown University made these comments after both Biden and U.S. President Donald Trump’s gave separate interviews on 60 Minutes by CBS News.
Both men said they considered China a competitor, but Trump also said the Asian country is “a foe in many ways” and an “adversary,” according to CBS.
“I think Biden has it correct, it is much more of a competition rather than an adversarial relationship,” Arend told CNBC’s “Street Signs Asia” on Tuesday.
“We can’t defeat China. We have to engage China,” he said. “We have to criticize where necessary, but we have to try to cooperate where possible.”
· Hong Kong: Authorities to ease COVID-19 restrictions from October 30
Authorities have announced the easing of certain coronavirus disease (COVID-19) restrictions in Hong Kong from Friday, October 30. As of Friday, the number of people allowed to sit together at restaurants will increase to six, and four people will be permitted to be seated together at bars.
Public beaches will reopen officially from Tuesday, November 3, with social distancing regulations continuing, including the wearing of face masks and limits on group gatherings.
· Asia will be ‘resilient’ in a coronavirus second wave. Here’s how to invest, says Credit Suisse
As parts of the world brace for a second wave of Covid-19 infections, the economic impact on Asia will likely be “limited” as the region will remain resilient, according to a Credit Suisse strategist.
“I think clearly Asia is going to be resilient in the face of a second wave in developed markets in the West,” said Dan Fineman, co-head of equity strategy for Asia Pacific at the Swiss bank.
The U.S. is seeing a surge in coronavirus cases again in recent days, while some countries in Europe are also seeing another sharp spike.
He flagged South Korea as a “top pick.”
“They’ve handled the pandemic quite well, and they don’t really have much of a domestic problem as far as the pandemic is concerned,” Fineman said, adding that the outlook for the country’s export sector has also improved.
Fineman also recommended countries such as Australia and Singapore, which he said had “relatively low risk on the pandemic.”
He added: “We would be looking to rotate into the higher risk, harder hit economies, places like say Hong Kong or Thailand, which have suffered more from the pandemic – if we get good news on vaccine phase three trials.”
Global outlook
But there would be risks for corporate debt if there isn’t another stimulus package in the U.S., warned Tai Hui, chief Asia market strategist at J.P. Morgan Asset Management.
Uncertainty still looms over the White House and it is unclear whether the Republicans will be able to strike a stimulus deal with Democrats before the election. White House economic advisor Larry Kudlow told CNBC’s “Squawk Box” on Monday that talks had slowed down, but noted they were still ongoing.
If the global economy moves to gradual recovery next year, it will benefit emerging market assets as well as U.S. and European corporate debt in the high-yield sector, said Tai.
“If the global economy is going to gradually recover in 2021, 2022, that means … the outperformance of emerging markets is likely,” he told CNBC’s “Squawk Box Asia” on Tuesday. “You’re likely to get a weaker U.S. dollar, which typically is good news for emerging market assets, whether it’s fixed income or equities.”
· On Alibaba’s Singles Day, Chinese consumers look to spend more, shift away from American brands
· India will get access to U.S. satellite data that can make military missiles more precise
· Oil falls 2% as rise in U.S. crude stocks fans oversupply fears
Oil prices slid about 2 percent on Wednesday, giving up most of the previous day’s gains, as a surge in U.S. crude stocks and growing coronavirus infections in the United States and Europe fanned fears of a supply glut in oil and weaker fuel demand.
Brent crude was down 76 cents, or 1.8%, at $40.44 a barrel by 0343 GMT, having climbed nearly 2% the previous day. U.S. oil was down 90 cents, or 2.3%, at $38.67 a barrel, after gaining 2.6% on Tuesday.
U.S. crude oil and gasoline stocks rose last week, data from industry group the American Petroleum Institute showed, with crude inventories rising by 4.6 million barrels to about 495.2 million barrels, against analysts’ expectations in a Reuters poll for a build of 1.2 million barrels.
“The higher-than-expected build in U.S. crude stocks prompted fresh selling, while concerns over supply disruption from Hurricane Zeta have receded,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.
Energy firms and ports along the U.S. Gulf Coast prepared on Tuesday for Zeta, the 11th hurricane of the season, as it entered the Gulf of Mexico.
Reference: CNBC, Reuters
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