· China will likely face U.S. sanctions over Hong Kong national security law, White House says
The U.S. government will likely impose sanctions on China if Beijing implements national security law that would give it greater control over autonomous Hong Kong, White House National Security Advisor Robert O’Brien said Sunday.
The draft legislation represents a takeover of Hong Kong, O’Brien said, and as a consequence U.S. Secretary of State Mike Pompeo would likely be unable to certify that the city maintains a “high degree” of autonomy. This would result in the imposition of sanctions against China under the Hong Kong Human Rights and Democracy Act of 2019, O’Brien said.
Pompeo has already called the proposal a “death knell” for Hong Kong’s autonomy. O’Brien warned that Hong Kong could lose its status as a major hub for global finance.
“It’s hard to see how Hong Kong could remain the Asian financial center that it’s become if China takes over,” O’Brien told NBC’s Chuck Todd on “Meet the Press.” He said financial services initially came to Hong Kong because of the rule of law that protected free enterprise and a capitalist system.
· Thousands protest Chinese security law as unrest returns to Hong Kong
Hong Kong police fired tear gas and water cannon to disperse thousands of people who rallied on Sunday to protest against Beijing’s plan to impose national security laws on the city.
In a return of the unrest that roiled Hong Kong last year, crowds thronged the Causeway Bay shopping area in defiance of curbs imposed to contain the coronavirus. Chants of “Hong Kong independence, the only way out,” echoed through the streets.
To Communist Party leaders, calls for independence for the semi-autonmous city are anathema and the proposed new national security framework stresses Beijing’s intent “to prevent, stop and punish” such acts.
· Hong Kong police fire tear gas to disperse anti-government protesters
Hong Kong police fired tear gas to disperse anti-government protesters on Sunday, as thousands thronged the streets to protest against Beijing’s plan to directly impose national security laws on the city.
The rally came as the city’s government sought to reassure the public and foreign investors over the laws that sent a chill through financial markets and drew a rebuke from foreign governments, international human rights groups and some business lobbies.
· Fresh U.S.-China tensions lift dollar; euro, offshore yuan slip
The dollar rose against a basket of currencies on Friday, helped by safe-haven demand as a move by Beijing to impose a new security law on Hong Kong further strained fast-deteriorating U.S.-China ties.
The U.S. Dollar Currency Index, which measures the greenback’s strength against six other major currencies, was up 0.4% at 99.789. For the week, the index was down about 0.6%.
The euro slipped 0.5% against the greenback.
The offshore Chinese yuan hit a two-month low of 7.1645. The onshore yuan hit eight-month lows.
A drop in oil prices on Friday on rising U.S.-China tensions and doubts about the pace of demand recovery from the coronavirus crisis hurt the currencies of oil-producing nations.
· Oil falls on China-U.S. tensions, energy demand doubts
Oil prices tumbled about 2% on Friday on rising U.S.-China tensions and doubts about how quickly fuel demand would recover from the coronavirus crisis.
Fuel demand plummeted in recent months as the pandemic caused governments to impose restrictions on movement and businesses closed their doors. Oil has rallied in recent days as activity started to resume.
But prices dropped after China said on Friday it would not publish an annual growth target for the first time. Beijing also pledged more government spending as the pandemic kept hammering the economy.
“The coronavirus has nullified a decade of global oil demand growth and the recovery will be slow,” said Stephen Brennock of broker PVM.
Brent crude futures fell 93 cents, or 2.6%, to settle at $35.13 a barrel. U.S. West Texas Intermediate (WTI) crude ended 67 cents, or 2%, lower at $33.25 a barrel.
China is set to impose new national security legislation on Hong Kong after last year’s pro-democracy unrest, a Chinese official said on Thursday, drawing a warning from President Donald Trump that Washington would react “very strongly.”
For the week, Brent and WTI gained 8% and 13%, respectively, but some said they may have come too far, too fast.
· Boston Feds' Rosengren: 'Main Street' loans to open beginning this week: CBS
The Federal Reserve’s “Main Street” program of loans for small and medium sized businesses should start taking applications this week and begin disbursing funds the first week after that, Boston Federal Reserve President Eric Rosengen said Sunday on CBS’s “Face the Nation.”
“I think money will go out over the next two weeks,” said Rosengren, whose bank is overseeing the program, among several the Fed has started to offset the economic impact of the coronavirus pandemic.
· CORONAVIRUS UPDATES:
· New York coronavirus fatalities fall to lowest level since March
Coronavirus deaths in New York state have fallen below 100, Gov. Andrew Cuomo said on Saturday, marking the lowest daily death toll from the virus since March 24.
The governor said the 84 new reported deaths was a “tragedy” but that the downward trend in daily deaths was a sign that the state is making significant progress.
· Doctor testing Moderna vaccine says it’s ‘simply mind-boggling’ that injection may be ready in 2020
A doctor involved in a U.S. coronavirus vaccine study said he is hopeful but not convinced that an injection will be available for circulation this year.
Dr. Carlos del Rio, an Emory University professor of medicine, told CNBC on Friday that a Covid-19 vaccine could be ready in some form for distribution by the end of 2020 but cautioned that it’s an unprecedented timeline.
“I am cautiously optimistic,” del Rio said on “Power Lunch,” echoing comments earlier that day from immunologist Dr. Anthony Fauci. “We are developing at a pace that has never been done before.”
· Thailand begins coronavirus vaccine trials on monkeys
Thailand on Saturday began testing a vaccine against the coronavirus on monkeys after positive trials in mice, an official said.
Thailand’s minister of higher education, science, and research and innovation, Suvit Maesincee, said researchers had moved testing of the vaccine to monkeys and hoped to have a “clearer outcome” of its effectiveness by September.
· Coronavirus could cost Mexico a million jobs: president
Mexican President Andres Manuel Lopez Obrador said on Sunday that the novel coronavirus could cost as many as a million jobs in the country as many industries considered not essential remain shut.
The Mexican economy was already in recession before the pandemic struck and different investment banks have forecast contractions as large as 9% for this year with only a gradual recovery next year.
· S&P forecasts South Africa's economy to shrink 4.5% in 2020
S&P Global Ratings on Friday said it projects South Africa’s economy to shrink by 4.5% this year as a result of the COVID-19 pandemic that has impacted production and consumption.
In April, S&P downgraded South Africa’s credit rating further into non-investment-grade territory, saying COVID-19-related pressures would have significant adverse implications for the country’s already-ailing economy and for tax revenues.
It lowered its long-term foreign-currency rating on South Africa to “BB-minus” from “BB” and its long-term local-currency rating to “BB” from “BB-plus,” with a stable outlook.
· Brazil revises 2020 deficit, debt forecasts to record levels as crisis deepens
Brazil’s government on Friday sharply revised its 2020 budget deficit and national debt forecasts to record levels, reflecting the hit to tax revenues and need for massive emergency spending caused by the coronavirus crisis.
Based on the government’s economic forecasts, gross national debt is expected to reach 93.5% of GDP this year from around 78% currently, and net debt to rise to 67.6% of GDP, the Economy Ministry said in a presentation.
Taking into account emergency measures yet to be formally approved, the central government budget deficit excluding interest payments could balloon to 675.7 billion reais ($121 billion), or 9.4% of gross domestic product, the presentation said.
The broader public sector deficit, meanwhile, would reach 708.7 billion reais, or 9.9% of GDP, assuming these emergency measures are approved.
The projections were announced after the ministry issued new official forecasts in its latest bimonthly revenue and expenditure report, which included a central government primary deficit of 540.5 billion reais.
Even that would be more than four times the 124.1 billion reais shortfall originally projected at the start of the year.
Brazil’s economy is on course for its steepest annual downturn since records began in 1900. The government expects GDP to contract by 4.7%. The consensus in the central bank’s latest weekly survey of economists is for a 5.1% fall.
· Nie Wen, economist at Shanghai-based Hwabao Trust, said Li’s report indicates China will “not resort to mass stimulus that some market players have been betting on.”
Nie expects GDP growth to slow sharply this year to around 2% or 3% from last year’s 6.1%.
“This year’s economic growth needs to reach around 3% to create 9 million new urban jobs,” Nie said, adding that the size of the fiscal stimulus announced by Li is about 4 trillion yuan.
Reference: CNBC, Reuters
Thai
Eng