Posted Jun 24, 2020 by Martin Armstrong
Indian and Chinese military commanders have agreed to disengage troops from a heavily disputed stretch of their border where a clash last week left 20 Indian soldiers dead, an Indian government source said on Tuesday. Senior military officials from both sides met for several hours on Monday in an attempt to reduce tensions in the Ladakh region in the western Himalayas.
India has imposed an anti-dumping duty on flat rolled steel products that are plated or coated with an alloy of aluminum and zinc originating in or from China, Vietnam, and South Korea, according to a government order here issued on Tuesday. The duty will be in the range of $13.07-$173.10 per tonne for 5 years, according to the statement. In the last few days, India has taken steps to protect its domestic industry and push local manufacturing as Prime Minister Narendra Modi wants to make the nation self-reliant to bolster its sagging economy and create jobs.
Taiwan’s Foxconn is planning further investment in India and may announce details in the next few months as the world’s largest contract manufacturer views the outlook there very favorably, its chairman said on Tuesday. Chairman Liu Young-way told Foxconn’s annual general meeting that looking ahead, India was a bright spot for development even though there was a “certain impact” at present due to the virus.
The International Monetary Fund (IMF) on Wednesday projected a sharp contraction of 4.5 percent for the Indian economy in 2020, a “historic low,” citing the unprecedented coronavirus pandemic that has nearly stalled all economic activities, but said the country is expected to bounce back in 2021 with a robust six percent growth rate. The (IMF) projected the global growth at –4.9 percent in 2020, 1.9 percentage points below the April 2020 World Economic Outlook (WEO) forecast.
The major Asian stock markets had a mixed day today:
- NIKKEI 225 decreased 14.73 points or -0.07% to 22,534.32
- Shanghai increased 8.93 points or 0.30% to 2,979.55
- Hang Seng decreased 125.76 points or -0.50% to 24,781.58
- ASX 200 increased 11.30 points or 0.19% to 5,965.70
- Kospi increased 30.27 points or 1.42% to 2,161.51
- SENSEX decreased 561.45 points or -1.58% to 34,868.98
- Nifty50 decreased 165.70 points or -1.58% to 10,305.30
The major Asian currency markets had a mixed day today:
- AUDUSD decreased 0.00481 or -0.69% to 0.68891
- NZDUSD decreased 0.00733 or -1.13% to 0.64238
- USDJPY increased 0.38 or 0.35% to 106.84
- USDCNY increased 0.01136 or 0.16% to 7.07186
- Gold decreased 2.60 USD/t oz. or -0.15% to 1,766.25
- Silver decreased 0.36 USD/t. oz or -1.99% to 17.6230
Some economic news from last night:
Corporate Services Price Index (CSPI) (YoY) remain the same at 0.8%
RBNZ Interest Rate Decision remain the same at 0.25%
Some economic news from today:
Leading Index decreased from 85.1 to 77.7
Loans (YoY) (May) decreased from 5.73% to 3.04%
The United States is studying the possibility of slapping $3.1 billion in additional tariffs on goods from the United Kingdom, France, Germany, and Spain — in another step that’s likely to exacerbate tensions between both sides of the Atlantic. In a document issued Tuesday evening, the Office of the United States Trade Representative said it is considering an “additional list” of products from France, Germany, Spain and the U.K. to be placed with duties of up to 100%, according to Bloomberg. The goods include olives, coffee, chocolate, beer, gin, some trucks and machinery.
Swissport has announced plans to cut 4,000 jobs in the United Kingdom, and Ireland as the airport services firm prepares for years of depressed demand for air travel. The company, which provides airport ground services and handles air cargo, said the coronavirus pandemic has caused its revenue to drop by 75%. The planned job cuts comprise half its workforce in Britain and Ireland.
Unemployment in Britain is beginning to climb despite a modest rebound in economic activity in the past month as coronavirus lockdown restrictions are lifted, according to a report published by Guardian analyst. Britain’s economy shrank by a record 20.4%, according to the latest figures for April, and job losses appeared to be mounting, with thousands of businesses forced to close.
The IMF has projected that the UK economy is expected to contract more than 10% this year, followed by a partial recovery in 2021. The IMF’s managing director, Kristalina Georgieva, had already warned that the April forecast had been overtaken by events, and that the likely path of the global economy was looking worse. In its latest report IMF has said the biggest contractions in economic activity envisaged by the IMF this year are in developed economies particularly in Europe. The UK is likely to be one of the deepest.
German authorities in the state of North Rhine-Westphalia have reimposed lockdown restrictions in two districts after a spike in cases, with more than half a million people affected. One area is home to a meatpacking plant where more than 1,500 workers have tested positive. State premier Armin Laschet said the “preventative measures” in Gütersloh district would last until June 30.
The major Europe stock markets had a negative today:
- CAC 40 decreased 146.32 points or -2.92% to 4,871.36
- FTSE 100 decreased 196.43 points or -3.11% to 6,123.69
- DAX 30 decreased 429.82 points or -3.43% to 12,093.94
The major Europe currency markets had a mixed day today:
- EURUSD decreased 0.00349 or -0.31% to 1.12758
- GBPUSD decreased 0.00839 or -0.67% to 1.24391
- USDCHF increased 0.00211 or 0.22% to 0.94675
Some economic news from Europe today:
Unemployment Rate (Apr) increased from 3.6% to 4.2%
French Business Survey (Jun) increased from 71 to 77
ZEW Expectations (Jun) increased from 31.3 to 48.7
German Business Expectations (Jun) increased from 80.5 to 91.4
German Current Assessment (Jun) increased from 78.9 to 81.3
German Ifo Business Climate Index (Jun) increased from 79.7 to 86.2
Wall Street closed in the red this Wednesday after numerous states reported a rise in coronavirus cases.
New Jersey and Connecticut joined New York in imposing a two-week quarantine period for travelers arriving from states experiencing a higher rate of COVID-19 infections. “As of today, the states that are above that level are Alabama, Arkansas, Arizona, Florida, North Carolina, South Carolina, Washington, Utah, Texas,” NY Gov. Cuomo said, stating that the travel restriction is subject to change. The restrictions apply to states with positive cases exceeding 10 people per 100,000 on a seven-day rolling average or if 10% of the total population. Over the weekend, Florida Gov. DeSantis commented on Cuomo’s mishandling of nursing home patients. “I would just ask them if that’s done, just please do not quarantine any Floridians in the nursing homes in New York,” DeSantis stated.
Secretary of State Mike Pompeo stated that the US and the EU are working together to develop a plan to resume safe travel. “I’m very confident in the coming weeks, we’ll figure that out, as between, not only the United States and the EU, but the United States and other parts of the world,” Pompeo stated during a news conference this Wednesday. Although the EU plans to resume some travel in July, they intend to prohibit incoming travelers from countries where cases are on the rise, such as the US.
Tax day, initially April 15, was pushed back to July 15 in the midst of the coronavirus crisis. At a recent virtual event, Treasury Secretary Steven Mnuchin said that the Trump administration “may consider” postponing the deadline again until September 15. However, he urged Americans to file their returns if they are able to do so.
The US determined that Huawei Technologies and video surveillance company Hikvision are controlled by the Chinese government, and therefore may be liable for sanctions. The People’s Liberation Army of China allegedly controls 20 separate companies, which will be presented to Congress to determine further steps. The news further corroborates rumors that Chinese-backed tech companies, like Huawei, are attempting to steal intelligence.
US Market Closings:
- Dow declined 710.16 points or -2.72% to 25,445.94
- S&P 500 declined 80.96 points or -2.59% to 3,050.33
- Nasdaq declined 222.2 points or -2.19% to 9,909.17
- Russell 2000 declined 49.6 points or -3.45% to 1,389.74
Canada Market Closings:
- TSX Composite declined 270.37 points or -1.74% to 15,294.38
- TSX 60 declined 15.75 points or -1.68% to 921.79
Brazil Market Closing:
- Bovespa declined 1,597.8 points or -1.66% to 94,377.36
India’s oil imports in May hit the lowest since October 2011 as refiners with brimming storage cut purchases after a continuous decline in fuel demand, preliminary data obtained from industry sources showed. In May, India imported 3.18 million barrels per day (bpd) of oil, a decline of about 31% from April, and about 26% from a year ago, the data showed. Data also showed that Oil from the Organization of the Petroleum Exporting Countries (OPEC) as a share of India’s imports fell to an all-time low of 71.3%, while the share of US oil hit a record high of nearly 8% in May.
The oil markets had a mixed day today:
- Crude Oil decreased 2.11 USD/BBL or -5.23% to 38.2600
- Brent decreased 2.18 USD/BBL or -5.11% to 40.4500
- Natural gas increased 0.004 USD/MMBtu or 0.25% to 1.6250
- Gasoline decreased 0.0882 USD/GAL or -6.78% to 1.2120
- Heating oil decreased 0.0446 USD/GAL or -3.71% to 1.1567
The above data was collected around 13.30 EST on Wednesday.
- Top commodity gainers: Rice (0.64%), Coffee (0.31%), Live Cattle (0.40%), and Oat (0.33%)
- Top commodity losers: Gasoline (-6.78%), Crude Oil (-5.23%), Brent (-5.11%), and Lumber (-3.90%)
The above data was collected around 13:40 EST on Wednesday.
Japan 0.01%(+0bp), US 2’s 0.19% (-0bps), US 10’s 0.69%(-2bps); US 30’s 1.45%(-3bps), Bunds -0.44% (-4bp), France -0.11% (-2bp), Italy 1.34% (+0bp), Turkey 11.55% (+3bp), Greece 1.29% (+0bp), Portugal 0.48% (-2bp); Spain 0.49% (+0bp) and UK Gilts 0.19% (-2bp).
- US 5-Year Note Auction decreased from 0.334% to 0.330%