· Safety-bid drives up dollar as U.S. coronavirus surge dim quick recovery hopes
The dollar held the upper hand on Thursday as an increase in coronavirus cases in the United States and fresh trade tensions undermined hopes for a quick global recovery and prompted investors to trim bets on riskier currencies.
The dollar’s index against a basket of currencies advanced 0.1% to 97.27.
The euro retreated to $1.1246 while the British pound stepped back to $1.2411.
New daily U.S. virus cases surged to nearly 36,000 in the latest tally, near a record of 36,426 hit in late April. The percentage of positive results in tests is also climbing.
The governors of New York, New Jersey and Connecticut ordered travelers from nine other U.S. states to quarantine for 14 days on arrival as Covid-19 showed signs of surging in the southern and western parts of the country.
In California, which has seen sharp rises in new cases in the past few days, Disney Parks said it will delay re-opening of theme parks and resort hotels.
While some investors expect the economic impact from second wave infections could be smaller than the first one, others worry that policymakers might fail to respond forcefully and risk further economic damage.
Also souring the mood was news that Washington is considering changing tariff rates for various European products as part of the trading partners’ aircraft dispute.
The Australian dollar dipped slightly to $0.6859 after losing 0.90% the previous day while the Canadian dollar drooped to C$1.3642 to the dollar, not helped by Fitch’s downgrade of Canada’s sovereign rating.
The rating firm cut Canada’s rating to “AA+” from “AAA,” citing deterioration of the country’s public finances in 2020 because of the Covid-19 pandemic.
Against the yen, the dollar also jumped back to 107.18 yen from a 1-1/2-month low of 106.075 touched on Tuesday.
· Treasury yields fall with coronavirus surge, economic data in focus
U.S. government debt prices were higher Thursday morning after a resurgence in coronavirus cases across the country.
At around 2:25 a.m. ET, the yield on the benchmark 10-year Treasury note was lower at 0.6741% and the yield on the 30-year bond was down at 1.4258%. Yields move inversely to prices.
A slew of economic data is expected at 8:30 a.m. ET, led by last week’s jobless claims figures after the previous week saw 1.5 million Americans filed for unemployment.
The final first-quarter GDP growth figure is due at the same time, along with May’s durable goods orders, first-quarter GDP price index and corporate profit figures and first-quarter PCE (personal consumption expenditure) price index readings.
· U.S. hits highest single day of new coronavirus cases with more than 45,500, breaking April record
The U.S. saw a record number of new coronavirus cases in a single day, with 45,557 diagnoses reported Wednesday, according to a tally by NBC News.
Wednesday’s cases top the previous highest daily count from April 26 — during the first peak of the pandemic in the U.S. — by more than 9,000 cases, according to NBC News’ tracking data. The World Health Organization reported its single-day record on Sunday, with more than 183,000 new cases worldwide.
Health experts said Monday that the resurgence in cases in Southern and Western states can be traced to Memorial Day, when many officials began loosening lockdowns and reopening businesses.
· Countries are ‘highly unlikely’ to impose full lockdowns again if there’s a second wave, analysts say
“This second wave of virus is a concern for investors ... but I think the key difference is that unlike last time in March, this time it’s highly unlikely that we would see a shutdown of the global economy,” said Suresh Tantia, senior investment strategist at Credit Suisse’s APAC CIO office.
Hartmut Issel, head of APAC equities at UBS Global Wealth Management, also told CNBC on Tuesday that countries are “very unlikely” to go down the path of a total lockdown again.
“Locking down an entire country ... cost(s) you up to 3% of GDP per month, so even the richest nations on the planet cannot afford another two, three months complete lockdown,” he said.
· The EU is discussing reopening its borders, and U.S. citizens could remain barred
The European Union is discussing how to reopen its external borders as the region looks to slowly revive its economy, with visitors from countries like the United States potentially still being barred from entering the bloc.
Thirty European countries decided to close their external borders in March to contain the spread of Covid-19. The travel restriction has been extended three times but it’s now due to end on Tuesday.
The European Commission, the executive arm of the EU, suggested earlier this month that European nations should open their internal borders by June 15 and slowly lift the travel ban on foreign visitors from July 1. The Commission also said that reopening external borders should be a coordinated exercise among European governments and reviewed on a regular basis.
“It is way too early to say which countries will be in the list,” an EU official told CNBC on Wednesday, referring to which non-EU countries may be granted access.
· Japan to disband panel of coronavirus experts after criticism
Japan is to disband a panel of medical experts advising Prime Minister Shinzo Abe’s cabinet on the response to the novel coronavirus after criticism of its transparency and lack of independence.
Japan has been spared the kind of explosive coronavirus outbreak seen elsewhere, with some 18,000 cases and 969 deaths, but it is far from over and questions about the government’s response linger.
The number of daily new cases in the capital, Tokyo, climbed to 55 on Wednesday, the highest tally in 1-1/2 months after a cluster of infections was found at an office.
· Oil prices extend losses on U.S. stock build, virus fears
Oil prices slipped further on Thursday after tumbling more than 5% in the previous session, as a record build in U.S. crude inventories and a rapid resurgence in COVID-19 cases cast doubts on a recovery in fuel demand.
U.S. West Texas Intermediate (WTI) crude futures fell 26 cents, or 0.7%, to $37.75 per barrel at 0640 GMT, after dropping $2.36 on Wednesday.
Brent crude futures fell 31 cents, or 0.8%, to $40.00 per barrel after falling $2.32 on Wednesday. A day earlier, the benchmark contract hit its highest price since early March, just before pandemic lockdowns and a Saudi-Russian price war slammed markets.
· Satellite images show new Chinese structures near site of border clash with India
China appears to have added new structures near the site of a deadly border clash with India in the western Himalayas, fresh satellite pictures show, heightening concerns about further flare-ups between the nuclear-armed neighbours.
Reference: CNBC, Reuters, CDC Gov
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