· Dollar gains as coronavirus fears recede
The greenback hit a more than two-year high against the euro on Wednesday as investors put more money into the U.S. stock market on growing optimism that the coronavirus will be contained.
The greenback has strengthened against the euro as economic data shows a brighter economic outlook for the United States than for the euro zone.
China reported on Wednesday its lowest number of new coronavirus cases in two weeks, bolstering a forecast by Beijing’s senior medical adviser for the outbreak in the country to end by April. Even so, fears of further international spread remained.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 99.015 after lows around 98.7 earlier.
The dollar gained 0.26% against the Japanese yen JPY= to 110.06 yen. The euro EUR= dropped 0.41% against the greenback to $1.0869, the lowest level since May 2017.
The S&P 500 and Dow Jones Industrials hit all-time highs on Wednesday.
Investors also grew more comfortable with risk on the view that central banks are likely to provide increased accommodation if the coronavirus harms the global economy.
· Fed Chair Powell: 'no reason' rising wages, job gains can't continue
Federal Reserve Chair Jerome Powell on Wednesday reiterated his confidence in the U.S. economic outlook, even as he said he expected some drag “soon” from China’s new coronavirus epidemic and called out the threat from income inequality and an expanding federal debt.
“There’s no reason why the current situation of low unemployment, rising wages, high job creation - there’s no reason why it can’t go on,” Powell told the Senate Banking Committee in his second day of congressional testimony.
The record-long U.S. economic expansion is now in its 11th year. U.S. wages are now growing at about a 3% annual pace, the unemployment rate is 3.6%, and job growth has more than kept up with an increase in the workforce.
· Interest rates should stay where they are as the economy grows and the consumer continues to be in good shape, Philadelphia Federal Reserve President Patrick Harker said Wednesday.
· CORONAVIRUS OUTBREAK
Daily death toll rises 250%
In addition to the rise of new cases, there has also been a significant rise in the death toll in the past 24 hours.
More than 245 deaths were recorded on Wednesday (figures published on Thursday). This compares with 97 deaths the previous day.
There has been no change to the way deaths are recorded, so this really is a significant increase in one day. It’s a rise of 250%.
Huge increase in new cases of virus
First up let’s have a look at the massive jump in reported new cases of coronavirus.
Nearly 15,000 new cases have been reported in a 24-hour period, taking the total number of cases to just under 60,000.
- To get an idea of the significance of this, the figure for confirmed new cases for Wednesday was 2,015.
The number of deaths in China has increased sharply by at least 245 as of midnight on Wednesday, according to health officials
All but three of the new deaths were recorded in Hubei province, taking the national total to 1,359
New cases in Hubei have also leaped by 14,887, a sevenfold increase on the day before. The national total is now nearly 60,000 cases.
- WHO says 'way too early' to predict end of coronavirus
The UN health agency has cautioned it is "way too early" to say whether COVID-19 might have peaked or when it might end, following a drop in the number of new cases.
"I think it's way too early to predict the beginning, the middle or the end of this epidemic right now," Michael Ryan, head of WHO's health emergencies programme told reporters.
- China works to boost economy
To combat a potential economic slowdown amid the outbreak, Chinese policymakers have taken major steps to restore investor confidence and boost business activity. Fiscal and monetary policies put in place over the past couple weeks include injections of cash by the central bank, tariff exemptions and targeted reserve requirement cuts.
- Chinese president promises aid to industries hit by virus
Chinese President Xi Jinping promised tax cuts and other aid to industries hurt by the virus outbreak in a renewed effort to rein in the rising damage to China's economy.
Xi's announcement comes as companies face increasing losses due to the closure of factories, offices, shops and many other businesses in the most sweeping anti-disease measures ever imposed. The measures have disrupted travel and other industries.
Beijing needs to "maintain stable economic operation and social harmony," Xi said in comments broadcast on state television.
- The ongoing coronavirus outbreak is speeding up the so-called “decoupling” between the U.S. and China more than their trade war did, according to an analyst from the Milken Institute.
“We talked about China and the U.S. decoupling. The coronavirus more than the trade war has sped some of that decoupling as countries, as businesses think about their supply chain for the long run,” said Curtis Chin, an Asia fellow at the Milken Institute, calling it an “increased disengagement” of both economies.
“It can’t all be in China, we’ve seen some of the consequences of over reliance on just one key market,” he told CNBC at the Milken Institute’s Middle East and Africa Summit in Abu Dhabi on Tuesday.
- OPEC says coronavirus to trim 2020 oil demand
OPEC cut its forecast for global growth in oil demand this year due to the coronavirus outbreak and said its output fell sharply in January as producers implemented a new supply-limiting pact.
In a monthly report, OPEC said 2020 demand for its crude will average 29.30 million barrels per day (bpd) 200,000 bpd less than previously thought.
- Canceled China flights top 85,000
Airlines have canceled more than 85,000 China flights because of outbreak, according to aviation consulting firm Cirium. That count is set to rise in the coming weeks as more than a dozen international airlines have scrapped or reduced China service altogether. The cancellations, logged between Jan. 23 through Feb. 11, account for more than a third of scheduled flights, to, from and within China, Cirium said. Close to 20% of international flights to and from China, or 9,239 trips were cancelled, and 37%, or 76,338 flights were canceled. The impact will likely dent airlines’ first-quarter results as they process refunds to customers booked on those routes. Between Jan. 29 and Feb. 4, refunds were up 1,140% for U.S-to-China travel, and up 731% for U.S.-bound travel from China, according to the Airlines Reporting Corporation, which processes airline tickets.
- Singapore's UOB allocates $2.1bn for companies impacted by coronavirus
Singapore lender United Overseas Bank (UOB) said it has allocated S$3 billion ($2.16bn) to companies in the city-state as relief assistance to help tide them over during the coronavirus outbreak.
"In the face of the likely economic fallout and its impact on industries and businesses, UOB sees the need to help its corporate clients, in particular the SMEs (small-and-medium enterprises), in addressing their near-term liquidity needs," it said in a statement.
- Carnival says earnings could take a big hit if it has to halt Asia operations
Carnival Cruise Lines said the coronavirus epidemic could dent earnings this year by as much as 65 cents per share if the cruise line is forced to suspend Asia operations. “While not currently planned, if the company had to suspend all of its operations in Asia through the end of April, this would impact its fiscal 2020 financial performance by 55 cents to 65 cents per share, which includes guest compensation,”
- Mobile World Congress canceled after major tech companies pull out
Organizers of Mobile World Congress, the world’s largest trade show for the mobile phone industry, have canceled the conference slated to start in Barcelona in less than two weeks. Facebook and other major companies have pulled out of MWC in recent days amid growing fears over the outbreak. “With due regard to the safe and healthy environment in Barcelona and the host country today, the GSMA has cancelled MWC Barcelona 2020 because the global concern regarding the coronavirus outbreak, travel concern and other circumstances, make it impossible for the GSMA to hold the event,” GSMA said in a statement.
· Mnuchin and Blankfein say Bernie Sanders would 'ruin' U.S. economy
Former Goldman Sachs head Lloyd Blankfein and U.S. Treasury Secretary Steven Mnuchin both said that Democratic presidential candidate Bernie Sanders would destroy the U.S. economy if he wins.
Blankfein, who was the chairman of Wall Street bank Goldman Sachs during the financial crisis, tweeted the criticism about Sanders as the U.S. senator from Vermont led the New Hampshire primary Tuesday night.
Sanders and rival Democratic contender Senator Elizabeth Warren have made fixing the country’s wealth inequality a focus of their presidential campaigns.
· Oil rises over 3% as demand worries ease amid fewer new coronavirus cases
Oil prices rose over 3% on Wednesday as China reported its lowest daily number of new coronavirus cases since late January, stoking investor hopes that fuel demand in the world’s second-largest oil consumer may begin to recover.
Brent LCOc1 futures gained $1.78, or 3.3%, to settle at $55.79 per barrel, while U.S. West Texas Intermediate (WTI) CLc1 crude gained $1.23, or 2.5%, to settle at $51.17.
Those were the highest settles for both futures since January even though the U.S. government reported a larger-than-expected weekly build in crude inventories that was countered by a decline in fuel stocks, including an unexpected gasoline drawdown.
Crude inventories USOILC=ECI rose 7.5 million barrels last week, the Energy Information Administration said, compared with analysts’ expectations in a Reuters poll for a 3 million-barrel rise.
Reference: CNBC, Reuters, Aljazeera, The Guardian, BBC
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