U.S. government debt prices were higher Friday morning as traders monitored coronavirus’ cases and new data.
At around 2:47 a.m. ET, the yield on the benchmark 10-year Treasury note dropped to 0.5692% and the yield on the 30-year Treasury bond also fell to 1.2193%. Yields move inversely to prices.
· U.S.-China tensions jolt yen to one-month high
A slide in the dollar paused and the safe-haven yen rose to a one-month high on Friday, as Sino-U.S. tensions escalated after China ordered the United States to shut its Chengdu consulate in retaliation for the closure of its consulate in Texas.
China’s foreign ministry said it told the U.S. embassy on Friday morning to close its consulate in the southwestern city of Chengdu, days after Washington abruptly ordered the closure of the Chinese consulate in Houston.
While Asian trading volumes were lightened by a public holiday in Japan, the escalating tensions lifted the yen to 106.38 per dollar, its strongest since late June.
The Chinese yuan, a barometer of Sino-U.S. tensions, looks set for its worst week in two months. It last sat at 7.0206 per dollar.
Other trade-exposed Asian currencies from the South Korean won to the Thai baht were also gently pressured.
Elsewhere the tearaway euro remained a tower of strength since busting through chart resistance in the afterglow of Europe’s leaders agreeing on a coronavirus rescue package.
It has gained 1.5% this week, its best since late June, and 3.3% for the month so far to sit at $1.1601, just below a 21-month high hit overnight.
Sterling hung on to early-week gains at $1.2733.
Besides Sino-U.S. tension, investors are looking to a slew of Purchasing Managers Index figures due across Europe and the U.S. later on Friday for a read on economic recovery progress.
Focus is also on the next U.S. fiscal rescue package, which is deadlocked in Congress while a month-end deadline looms as some unemployment benefits are due to expire.
· Economists See China Output Recovering to Hit 2% Growth in 2020
China’s economy will expand 2% this year, according to a survey of economists, signaling a slow but steady recovery from the historic slump in the first quarter.
Growth in the current quarter will be 5.2% from a year ago, faster than the 3.2% expansion in the three months to June. The survey of 67 economists was conducted in the week after second-quarter data showed a faster-than-expected recovery.
· China orders U.S. to close consulate in Chengdu
China’s Foreign Ministry announced Friday that it is revoking the license for the U.S. consulate general in the southwestern Chinese city of Chengdu.
The ministry also ordered the consulate general to cease operations, according to an online statement.
“The current situation between China and the U.S. is something the Chinese side does not want to see,” the foreign ministry said in an online Chinese-language statement, according to a CNBC translation.
“The responsibility lies entirely with the U.S. side,” the statement added. “We again urge the U.S. side to immediately revoke its relevant wrong decisions, to create necessary conditions for the two countries’ relationship to return to normal.”
· Senate GOP delays relief plan until next week
Senate Republicans have postponed the release of their coronavirus relief package until next week, guaranteeing Congress will miss a deadline to renew extra support for unemployed Americans.
“The [Trump] administration has requested additional time to review the fine details, but we will be laying down the proposal early next week,” Senate Majority Leader Mitch McConnell said. “We have an agreement in principle on the shape of the package.“
The Senate GOP had planned to reveal the legislation today. That would have allowed negotiations to begin with Democrats on a bill to pass both chambers of the divided Congress.
At the end of this week, states will stop paying the additional $600 per week of unemployment insurance that Congress passed in March.
· CORONAVIRUS UPDATES:
Ø Global cases: More than 15.6 million
Ø Global deaths: At least 636,575
Ø U.S. cases: More than 4.1 million
Ø U.S. deaths: At least 147,333
· HHS expects U.S. death rate to fall, contradicting CDC
The rate of deaths from the coronavirus in the U.S. should begin to fall in the “next couple of weeks,” according to the Department of Health and Human Services.
The seven-day rolling average of coronavirus infections is beginning to fall, and U.S. health officials predict hospitalizations will go down next week and mortality rates will follow in about two weeks, Brett Giroir, an assistant secretary for health at HHS, said during a press briefing with reporters.
· New York Gov. Andrew Cuomo says coronavirus infections among young people are on the rise
New York Gov. Andrew Cuomo said Thursday that there’s been a rise in coronavirus infections among young people compared with other age groups.
Infection rates in every age group in New York has either remained flat or declined, except for people between 21 and 30 years old, according to Cuomo.
· WHO warns there’s no going back to ‘old normal’ as coronavirus accelerates in three countries
The World Health Organization warned Thursday there is no going back to the “old normal” as the coronavirus pandemic accelerates in the United States and poorer, developing countries.
Half of all Covid-19 cases reported so far are from the United States, Brazil and India, WHO Director-General Tedros Adhanom Ghebreyesus said during a news conference from the agency’s Geneva headquarters. “It’s completely understandable that people want to get on with their lives, but we will not be going back to the old normal.”
The United States has the worst outbreak in the world with more than 3.8 million Covid-19 cases so far, according to data from the WHO. That’s followed by Brazil with 2.1 million cases and India with 1.1 million cases, according to the organization. There are more than 14 million cases globally.
Even though cases are high in the U.S., Brazil and India, there’s still a chance to bring the virus under control, said Dr. Maria Van Kerkhove, head of the WHO’s emerging diseases and zoonosis unit.
· U.S. sets global benchmark for COVID-19 vaccine price at around the cost of a flu shot
The U.S. government has set a benchmark for COVID-19 vaccine pricing in a $2 billion deal announced on Wednesday with Pfizer Inc (PFE.N) and German biotech BioNTech SE (22UAy.F) that will likely pressure other manufacturers to set similar prices, industry analysts told Reuters.
The deal, which is contingent on an approvable product, secures enough vaccine to inoculate 50 million Americans for about $40 a person, or about the cost of annual flu shots, and is the first to provide a direct window into likely pricing of successful COVID-19 vaccines.
· Pompeo urges more assertive approach to 'Frankenstein' China
U.S. Secretary of State Mike Pompeo took fresh aim at China on Thursday and said Washington and its allies must use “more creative and assertive ways” to press the Chinese Communist Party to change its ways, calling it the “mission of our time.”
· Pompeo’s speech slamming China will have the ‘opposite effect,’ says former U.S. diplomat
Specifically, Pompeo’s seeming attempt to rally the Chinese people against the Communist Party of China has the opposite effect of increasing support for the ruling party, he said.
· China's economy seen growing 2.2% in 2020, weak demand, U.S. tensions cloud outlook: Reuters poll
China’s economy is expected to recover steadily in the rest of the year, boosted by stimulus measures to reverse the damage from the coronavirus crisis, but weak global demand and rising Sino-U.S. tensions are key risks, a Reuters poll showed on Friday. The world’s second-biggest economy is now expected to expand by 2.2% in 2020, according to the median of 42 analysts surveyed by Reuters, up from 1.8% projected in the last poll in April.
· EU economics commissioner sees recovery fund payment in second half of 2021: paper
Payments of the massive coronavirus stimulus approved by leaders of the European Union will start in the second half of next year, the bloc’s economy commissioner, Paolo Gentiloni, was quoted as saying on Friday.
adding that the bloc would have to approve new resources, such as the digital tax and the CO2 tax, to repay the common debt between 2026 and 2056.
“Otherwise, individual countries will find themselves having to repay the money because Europe has not been able to repay the common debt,” Gentiloni said.
· U.S. must remove tariffs on European products and French wine: Le Maire
The United States government must remove tariffs imposed on European products such as French wine, said French Finance Minister Bruno Le Maire on Friday.
· UK retail sales jump by nearly 14% in June: ONS
British retail sales grew more strongly than expected in June when non-essential stores in England were allowed to reopen to the public in the middle of the month.
Retail sales in June grew by 13.9% from May, above the average 8% growth forecast in a Reuters poll of economists.
Compared with June last year, sales were down 1.6%.
· Vietnam took drastic early action to fight the coronavirus — and has reported zero deaths
Vietnam has reported zero deaths from Covid-19. It has just 412 cases, despite having a population of more than 95 million people.
Vietnam has confirmed 412 cases of Covid-19 and reported no deaths in a country of 95.5 million. The response wasn’t perfect, and some found it repressive, but it is now one of the most successful in the world.
What went well: Aggressive contact tracing, quarantine, and a clear communication campaign from the government.
Vietnam now resembles normalcy, with its bars and restaurants open.
· Oil edges higher on weaker dollar, but demand threats cap gains
Oil prices edged higher on Friday on the back of a weaker U.S. dollar, although demand concerns stemming from rising coronavirus cases and escalating U.S.-China tensions kept a cap on prices.
The dollar slid to 22-month lows against a basket of currencies. A weaker dollar usually spurs buying of commodities priced in the greenback, like oil, because they become cheaper for holders of other currencies.
Brent crude rose by 6 cents, or 0.1%, to $43.37 a barrel by 0634 GMT, and U.S. West Texas Intermediate (WTI) crude rose by 1 cent to $41.08.
Reference: CNBC, Reuters, Worldometers, Bloomberg
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