US Briefing - Monday 10.08
Headlines
  • Fed's Evans: Another Covid-19 Aid Package 'Incredibly Important'
  • Fed’s Kashkari: Advocates 6-Week Lockdown To Defeat Covid-19
  • Pelosi, Mnuchin Open Door To Narrower Covid-19 Aid Through 2020
  • Trump Authorizes Extending Special Unemployment Benefit At $400/Wk
  • Florida, Arizona Covid-19 Cases Slow, Texas Positive Rate Hits Record
  • WH's Kudlow: US Is Making Inroads Against The Covid-19 Crisis
  • China Fighter Jet Briefly Crosses Strait; US Offers Taiwan 'Strong' Support
  • China Sanctions US Officials Including Rubio, Cruz Over Hong Kong
  • China Cites It Is Necessary To Ensure ‘Candid’ Dialogue With US
  • China Resumes Tourist Visas To Macau, Lifting Recovery Hopes
  • Bank Of France: See Slight Improvement If Any To French Econ In Aug
  • UK's Covid-19 Daily Infections Rise To Highest Level Since June
  • Turkey Lowers Key Banking Ratio To Slow Credit As Lira Falls
  • Turkey Starts Naval Exercises South Of Greece’s Kastellorizo
  • Australia Reports Biggest One Day Rise In New Covid-19 Deaths
  • Oil Climbs With Saudi Aramco Seeing Demand Recovery Continuing
  • Twitter, TikTok Have Held Preliminary Talks About Merger
  • UK Transport Firms Gain As UK Gvt Promises More Covid-19 Aid
  • Barrick's Adj. Q2 Profit More Than Doubles On Higher Output, Prices
Commentary
Fed's Evans: Another Covid-19 Aid Package 'Incredibly Important'

The United States should implement another support package to ensure workers can stay safely at home while the novel coronavirus continues to spread, Chicago Fed President Charles Evans said in an interview with CBS News released on Sunday.

 

Evans said it was up to U.S. lawmakers to protect small businesses and vulnerable communities with measures that ensure they can continue to pay their rent and buy food as long as the virus was not under control. “I think that public confidence is really important and another support package is really incredibly important,” Evans said on CBS’s Face the Nation program.

 

He also said that the most pessimistic economic projections involved not supporting state and local governments, which in turn would have to implement drastic cuts to support some of the federal aid measures. Evans’ comments come after U.S. lawmakers failed to strike an agreement on a second aid package after weeks of negotiations, leaving tens of millions of unemployed Americans without direct federal support.

(Reuters - Continue Reading)

Pelosi, Mnuchin Open Door To Narrower Covid-19 Aid Through 2020

US House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin on Sunday said they were open to restarting COVID-19 aid talks, after weeks of failed negotiations prompted President Donald Trump to take executive actions that Democrats argued would do little to ease Americans’ financial distress.

 

Discussions over a fifth bill to address the impact of the coronavirus pandemic fell apart on Friday, a week after the expiration of a critical boost in unemployment assistance and eviction protections, exposing people to a wave of economic pain as infections continue to rise across the country. Trump on Saturday sought to take matters into his own hands, signing executive orders and memorandums aimed at unemployment benefits, evictions, student loans and payroll taxes.

 

Trump told reporters in New Jersey before returning to Washington on Sunday that his suspension of the collection of the payroll tax could be made permanent. He said doing so would have no impact on Social Security because reimbursement would be made through the general fund.

(Reuters - Continue Reading)

German ZEW Investor Confidence Set For 2nd Straight Drop

Frankfurt, 10 August July 2020 (LS NEWS) – Financial market experts responding to the August ZEW survey are expected to express less optimism about the next six months as analysts warn of a flattening of Germany’s recovery curve. Economists predict that the ZEW’s forward-looking economic sentiment index will decline for the second-straight month with a drop to 58.0 from 59.3 in July. The current sentiment indicator is expected to rise to -68.8 from last month’s -80.9 reading.

 

 “The optimism for future improvement should be dampened somewhat by the recent global uptick in Covid-19 cases,” HSBC said. Analysts have said the pace of the Germany’s rebound could be slowing, and a number of observers predict vacillations in the growth rate as the world continues to deal with the pandemic.

 

“While we are seeing early signs of plateauing in other high-frequency indicators, the financial market surveys might be an unsuitable gauge for the real economy in current times, given their forward-looking nature based on expectations as well as a marked disconnect from the real economy, in part aided by the ample monetary and fiscal easing put in place,” said Angel Talavera, head of Europe economics at Oxford Economics.

(LiveSquawk - Continue Reading)

August Economic Update: A Cruel Summer

It’s a cruel summer. Back in 1984, Bananarama were singing about hot summer streets, unsuccessful attempts to smile and being left on their own.

 

A feeling many will have these days when wanderlust has to be subdued and the nearby lake has to make up for a sandy coastal beach. The summer is also cruel as it finally added numbers to the Covid-19 crisis. For most economies, the GDP data for the second quarter followed the pattern of ‘worst quarter since x years for country y’. We only had to fill in the numbers.

 

In all honesty, as severe as these GDP readings were, they are yesterday’s story. In fact, they are a painful illustration of the costs of a lockdown. The longer and the stricter a lockdown, the more severe was the impact on the economy. This pattern nicely explains the differences across the Eurozone. The (too) early lifting of lockdown measures in the US is also the main reason why the contraction was somewhat less severe than in the Eurozone. At the same time, China’s recovery continued. The fact that Chinese exports in June surprised to the upside could be another sign that the Eurozone and the US are recovering.

(ING Think – Continue Reading)

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