European Briefing - Friday 22.05
Headlines
  • BoJ Holds MonPol Steady; Sets A New JPY75T SMEs Lending Program
  • China’s Abandons 2020 GDP Target On Virus; 2020 CPI Target: 3.5%
  • China Draft Laws Require Hong Kong To Enact National Security Rules
  • China Pledges To Implement Phase 1 Trade Deal; Keep Yuan Stable
  • China Targets Jobless Rate Of 6%; 2020 Budget Deficit Over 3.6%/GDP
  • China 2020 Defense Spending +6.6% Y/Y; Slowest Since 1991
  • Fed’s Powell: Fed Won't Rest Until Economy On Road To Recovery
  • Fed’s Clarida: May Wait Until The Fall To Give More Rate Guidance
  • Fed’s Bostic: Not A Big Fan Of Negative Interest Rates
  • Trump: Will Not Close The Country If A Second Wave Of Virus Hits
  • Senate's McConnell: Next US Covid-19 Rescue Package Not Far Off
  • BoC’s Poloz: Rates Will Stay Low; Economic Worries A Bit Overblown
  • NZ FinMin Roberston: NZ Is Considering Helicopter Money Handouts
  • Senators Propose Sanctions On Chinese Officials Over Hong Kong
  • Times: UK PM Seeking To End Reliance On Some China Imports
  • Fitch Revises Australia's Outlook To Negative, Affirms Rating At 'AAA'
  • Chipmaker Nvidia's Q1 Adj EPS Beats; Q2 Rev Guidance Also Beats
Commentary
Beijing Abandons 2020 Economic Growth Target

China will not set an economic growth target for the first time in 2020, Premier Li Keqiang confirmed at the National People’s Congress on Friday in Beijing. The move was expected in some quarters, with the economy having contracted by 6.8 per cent in the first quarter of 2020 compared to a year earlier, under huge pressure from the coronavirus pandemic.

 

“We have not set the specific [gross domestic product] target mainly due to the global pandemic and big uncertainties in the economy and trade,” read the work report, adding that China was facing an “unpredictable” time.

 

China's government has, though, set a target of creating 9 million new urban jobs, compared to 11 million last year, and a surveyed urban unemployment rate of around 6 per cent, compared to 5.5 per cent last year. The target for consumer price index (CPI) growth for the year is around 3.5 per cent, compared to 3 per cent last year.
(SCMP – Continue Reading)

BoJ Launches Its Version Of Fed's 'Main Street' Lending Scheme

Japan’s central bank created its own version of the U.S. Federal Reserve’s “Main Street” lending program to channel more money to small businesses, in a bid to keep the coronavirus pandemic from pushing the economy deeper into recession. In an emergency meeting on Friday, the Bank of Japan also extended the deadline for a raft of measures it has put in place to combat the fallout from the virus, including accelerated corporate debt purchases, by six months to March 2021.

 

“The BOJ will take additional monetary easing steps without hesitation if necessary, with a close eye on the impact from the coronavirus pandemic,” the central bank said in a statement.

 

As widely expected, the BOJ kept unchanged its short-term interest rate target of -0.1% and a pledge to guide 10-year government bond yields around 0%.

(Reuters – Continue Reading)

Fed's Powell: Economic Forecasts Filled With Uncertainty

Efforts to forecast the U.S. economy's path to recovery from the current deep downturn face “a whole new level of uncertainty," Federal Reserve Chairman Jerome Powell said Thursday. Not only is there the difficulty predicting how the coronavirus pandemic will play out, it is also unclear how American workers and consumers will react as lockdowns aimed at limiting the spread of the virus are lifted, Powell said in an address to a virtual Fed conference.

 

Successfully restarting the economy will depend in large part on the public’s confidence that the loosening of the stay-at-home orders will not trigger a resurgence of the virus, he said.  

 

“The pain of this downturn is compounded by the upending of normal life, along with great uncertainty about the future,” he said. “All of us have our own decisions to make ... and those decisions will depend on public confidence that it is again safe to undertake various activities.”

(Yahoo Finance - Continue Reading)

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