Closing Wrap - Monday 29.06
Headlines
  • Broad German Parliament Alliance Plans To Back ECB Bond Buying
  • WHO's Tedros: Pandemic 'Is Not Even Close To Being Over'
  • NY Gov Cuomo: May Slow NYC Reopening In Phase III
  • Fed's Daly: It's 'Far Too Early' To Judge Recovery
  • Fed: PMCCF Is Operational And Available For Use Beginning Monday
  • ECB’s Lagarde: ECB Is Constantly Evaluating Policy, Measures For Proportionality
  • BoE‘s Vlieghe: Neutral Rates Might Fall Further
  • Merkel Throws Her Support Behind Radical European Recovery Plan
  • OPEC's Sec-General, UAE Energy Minister Say Tough Times Ahead For Oil Mkts
  • FDA Approves Phesgo, An In-Home Breast Cancer Treatment
  • Gilead Does Not Expect Discounts On Remdesivir In US Commercial Market
  • Justices Won’t Take Up Ford’s Tariff Engineering Challenge
  • Facebook Sales At Risk After More Firms Halt Advertising On Site
  • Amazon’s Video Site Twitch Bans Trump For ‘Hateful Conduct’
  • NYT Pulls Out Of Apple News
Commentary
EZ Headline Inflation Set To Show Slight Gain In June

Annual consumer price growth in the Eurozone is expected to have moved slightly higher in June on increased costs for energy, but inflation is projected to remain well below the European Central Bank’s target of near but below 2pct as countries in the single currency area attempt to restart their economies after from Covid-19 lockdowns.

 

Headline June inflation in the euro area is forecast to show an increase this month to an annual rate of 0.2pct from the 0.1pct reading in May on energy price growth.

 

Futures prices for West Texas Intermediate (WTI) crude turned negative in the latter part of April but were more than $7 higher on Monday than at the end of May.

 

The Eurozone’s core rate inflation rate is expected to move lower with a drop to 0.8pct from 0.9pct last month, according to economists. (LiveSquawk – Continue Reading)

Global GDP Forecast Stable As Coronavirus Disruption Eases

Fitch Ratings still expects global GDP to fall by 4.6% in 2020 in its latest Global Economic Outlook (GEO), released today. The stabilisation in the forecast follows clearer evidence in recent weeks of sequential improvements in economic activity.

 

"Signs of sequential improvements in activity have become clearer over the past month, lending confidence to the view that April marked the trough of the coronavirus-related recession. Nevertheless, the risk of a resurgence of the virus and renewed nationwide lockdowns - which could severely interrupt the expected economic recovery path - remains high," said Brian Coulton, Chief Economist, Fitch Ratings.

 

Firmer signs of economic recovery have emerged since our previous GEO, in the form of sharp month-on-month increases in retail sales in the US, UK and Spain in May, a rise in US employment last month and improving PMI balances in May and June. Daily mobility data confirm a significant ongoing recovery in visits to retail and recreation venues as lockdown measures have eased. Construction activity is also reviving relatively quickly after having fallen particularly sharply amid lockdowns. (Fitch – Continue Reading)

ECB Could Boost Bond Buying By Another Trillion Euros, Economist Projects

The European Central Bank (ECB) could expand its bond-buying program by a further 1 trillion euros ($1.12 trillion) over the next two to three years as inflation takes center stage, according to Berenberg European Economist Florian Hense.

 

The central bank earlier this month increased its Pandemic Emergency Purchase Programme (PEPP) by 600 billion euros to a total of 1.35 trillion euros in a bid to shore up the economy against the fallout from the coronavirus pandemic.

 

In a note Friday, Hense said that while the market broadly anticipates one more expansion of the PEPP envelope by around 500-600 billion euros, the ECB could deliver a total increase of between 800 billion and 1.6 trillion euros, depending on the inflation outlook, the success of the ECB’s long-term loans, and the currently paused monetary policy strategy review. (CNBC – Continue Reading)

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