· Dollar dips as traders bet on pandemic recovery
The U.S. dollar weakened and higher-risk currencies including the Australian dollar jumped on Monday as investors focused on the prospect for an eventual economic recovery from the coronavirus pandemic.
Traders bought riskier currencies even after signs of setbacks in the battle to contain the coronavirus.
The World Health Organization (WHO) reported a record increase in global novel coronavirus cases on Sunday, with North America and South America showing the largest rises.
The dollar dipped 0.64% against a basket of currencies to 97.06.
The euro gained 0.72% versus the dollar to 1.1256, rising off recent two-and-a-half-week lows.
On Friday, EU leaders agreed urgent action was needed to haul their economies from the deepest recession since World War Two, but made no progress on a massive stimulus plan that has divided them for weeks.
· WHO says record number of coronavirus cases isn’t just because of more testing
Coronavirus cases reaching record numbers globally are not just the result of more countries testing, the World Health Organization said Monday.
“We do not believe that this is a testing phenomenon,” Mike Ryan, executive director of the WHO’s emergencies program, said at a news conference at the organization’s Geneva headquarters.
“Clearly when you look at the hospital admissions, [they] are also rising in a number of countries and deaths are also rising. They’re not due to increased testing per se. So there definitely is a shift in the sense that the virus is now very well established on a global level,” he said.
· Two more Trump campaign staff members test positive for coronavirus
Two more staff members of President Donald Trump’s campaign who were in Tulsa, Oklahoma, for his rally on Saturday have tested positive for the coronavirus, a Trump campaign spokesman said on Monday.
The campaign said on Saturday hours before the rally, Trump’s first since March, that six members of the campaign’s advance staff had tested positive.
· The Fed’s corporate bond buying is stoking bubble fears
The Federal Reserve’s move into the next phase of its corporate bond buying is generating renewed concerns over potential asset bubbles.
In the latest leg of its effort to keep markets functioning, the central bank said last week it will expand its purchases of exchange-traded funds into individual issuance of company debt.
While the initial announcement of the program provided a major lift to Wall Street, there now are worries that the risk-on sentiment could be getting carried away.
The worries are that the market has now gone too far as interest rates linger around record lows and issuers count on perpetual Fed support should buyer appetite wane.
· Fed's Powell, Treasury's Mnuchin to testify June 30 before House panel
Federal Reserve Board Chairman Jerome Powell and Treasury Secretary Steven Mnuchin will testify before the U.S. House of Representatives Financial Services Committee on June 30 about the coronavirus response, the panel said on Monday.
· U.S. home sales hit nine and a half year low; price growth cools
U.S. home sales dropped to their lowest level in more than 9-1/2 years in May, strengthening expectations for a sharp contraction in housing market activity in the second quarter following disruptions caused by the COVID-19 pandemic.
The report from the National Association of Realtors on Monday also showed the smallest annual home price increase in more than eight years. The slump in existing home sales reflected closings on contracts signed in March and April, when nearly the whole country was under lockdowns to slow the spread of the respiratory illness.
With applications for home loans surging to an 11-year high in recent weeks amid record low mortgage rates, May was probably the nadir for the existing housing market. Data last week showed a sharp rebound in building permits in May. But nearly 20 million people are unemployed and housing supply remains tight.
Existing home sales fell 9.7% to a seasonally adjusted annual rate of 3.91 million units last month, the lowest level since October 2010. It was the third straight monthly drop. Economists polled by Reuters had forecast existing home sales would fall 3% to a rate of 4.12 million units in May.
Home resales, which make up about 90% of U.S. home sales, decreased 26.6% on a year-on-year basis in May, the largest annual decline since 1982. There were 1.55 million previously owned homes on the market in May, down 18.8% from a year ago.
· Japan expected to compile next econ stimulus in fall, says PM Abe's ally
Japan is expected to compile a stimulus package to boost the economy in the autumn, as its previous two packages were aimed at preventing firms and households from bankruptcy amid the coronavirus pandemic, a close ally of Prime Minister Shinzo Abe said.
· World Bank chief sees progress on G20 debt relief; wants more private sector buy-in
The Group of 20 major economies have made good progress with a debt relief initiative for the world’s poorest countries, but additional relief and greater participation by private sector creditors is needed, World Bank President David Malpass said on Monday.
Malpass told Reuters in an interview that 35 of 73 eligible countries were participating in the G20 debt relief initiative, and more had expressed interest.
· Oil up above 2% on tighter supplies, eased lockdowns
Oil was up 2% on Monday on tighter crude supplies from major producers and as coronavirus lockdowns kept easing despite a record rise in cases globally.
Brent crude settled at $43.08 a barrel, up 89 cents, or 2.1%. The West Texas Intermediate (WTI) crude contract for August, the day’s more-active contract, settled at $40.73 a barrel, rising 90 cents, or 2.3%.
Prices got a boost from a plummeting U.S. and Canadian oil rig count, an indicator of future supply, which fell to a new low last week, said Andy Lipow, president of consultants Lipow Oil Associates.
Reference: CNBC, Reuters
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