· Dollar holds breath waiting for Trump health updates, fiscal package
The dollar index slipped slightly on Monday but was little changed from Friday’s close as financial markets waited for news about U.S. President Donald Trump’s health and developments in fiscal aid talks in Washington.
Investors are also waiting for developments in talks in Washington about a coronavirus relief package after U.S. House Speaker Nancy Pelosi on Sunday reported progress i the discussions.
The dollar slipped slightly against a basket of currencies, but its index held close to recent ranges, down less than 0.1% on the day at 93.785 at 0650 GMT =USD.
Dollar-yen rose 0.3% to 105.615 at 0659 GMT, recovering from its sharpest fall in more than a month on Friday JPY=EBS.
The euro was up 0.1% at $1.17260 at 0712 GMT EUR=EBS.
British Prime Minister and the head of the European Union’s executive, Ursula von der Leyen, agreed in a phone call on Saturday to step up negotiations on a post-Brexit deal, as the Dec. 31 deadline approaches.
The pound was at $1.2917 at 0721 GMT, down 0.2% on the day GBP=D3.
In focus this week are the U.S. Federal Reserve’s meeting minutes due on Wednesday and European Central Bank meeting minutes follow on Thursday. Flash estimates for annual euro zone inflation came in weaker than expected on Friday, raising pressure on the European Central Bank to increase its stimulus.
· The Fed is clearly ‘more worried’ about deflation at the moment: BNP Paribas
· Trump's medical status unclear as doctors say he could be discharged on Monday
President Donald Trump could be discharged from the hospital where he is being treated for COVID-19 as soon as Monday, according to his doctors, although his condition remains unclear and outside experts warn that his case may be severe.
Trump’s doctors have said his health is improving and he could be sent back to the White House as soon as Monday.
A return to the White House might help Trump project a sense of normalcy as he faces a difficult re-election battle against Democrat Joe Biden.
A Reuters/Ipsos poll released on Sunday showed Trump trailing Biden by 10 percentage points. About 65 percent of Americans said Trump would not have been infected had he taken the virus more seriously.
· Experts raise questions about severity of Trump's COVID-19
Doctors not involved in treating President Donald Trump for COVID-19 said the fact that he has been started on dexamethasone - a generic steroid widely used in other diseases to reduce inflammation - is the strongest evidence yet that his case may be severe.
“We give dexamethasone to patients who require supplemental oxygen,” said Dr. Amesh Adalja, an infectious disease specialist at Johns Hopkins University.
If Trump no longer requires supplemental oxygen and is able to return to his normal activities, his doctors could discharge him from the hospital, he said.
“The biggest question would be is there a risk of deterioration, or is he on a good trajectory?” Dr. Adalja said.
Doctors said COVID-19 patients who have had a good response to treatment can leave the hospital relatively quickly, but they will still need to be closely monitored.
Dr. David Battinelli, chief medical officer at New York’s Northwell Health said “it’s entirely plausible” that Trump could get discharged on Monday, but cautioned that a full recovery would take time.
“It would be very unlikely for him to be out and about, and on the campaign trail in less than 14 days,” he said.
· COVID-19 and no-deal Brexit could cost UK $174 billion a year: Baker & McKenzie
The combination of COVID-19 and a failure to secure a post-Brexit trade deal with the European Union could cost the United Kingdom around 134 billion pounds ($174 billion) each year in lost GDP for a decade, research by law firm Baker & McKenzie showed.
Prime Minister Boris Johnson has set Oct. 15 as a deadline for clinching a post-Brexit trade deal which would kick in when the United Kingdom leaves informal EU membership at the end of this year.
The COVID-19 outbreak will cut Britain’s GDP by 2.2% below the levels anticipated before the outbreak, Baker & McKenzie said in a report titled “The Future of UK Trade: Merged Realities of Brexit and COVID-19.”
On top of that, Brexit, even with a trade deal, would cut GDP by 3.1% in the long-run relative to a hypothetical scenario where the UK remained in the EU, while exports of goods would be 6.3% lower, Baker & McKenzie said.
But without a trade deal, the cost of Brexit would increase to 3.9% of GDP in the long run, Baker & McKenzie said.
· UK technical failure in COVID-19 testing data system now fixed, minister says
A technical failure in England’s COVID-19 testing data system has now been fixed and should not be repeated, Work and Pensions Secretary Thérèse Coffey said on Monday.
· Euro zone economic recovery floundered in Sept as services struggled: PMI
The euro zone’s economic recovery faltered in September as the reimposition of some restrictions on activity to halt a resurgence in the coronavirus sent the bloc’s dominant service sector into reverse, a survey showed.
But that didn’t stop IHS Markit’s final composite Purchasing Managers’ Index, seen as a good barometer of economic health, falling to 50.4 in September from August’s 51.9, close to the 50 mark separating growth from contraction.
It was dragged down by the PMI for services industries, which accounts for around two thirds of GDP, which slumped to 48.0 from August’s 50.5, albeit slightly better than a preliminary 47.6 estimate.
· German economic recovery remains on course despite slacking services: PMI
Germany’s service sector barely grew in September, but strong manufacturing helped the private sector in Europe’s largest economy to remain on track for a solid recovery in the third quarter, a survey showed on Monday.
IHS Markit’s final services Purchasing Managers’ Index (PMI) fell to 50.6 from 52.5 in the previous month.
· Weaker services weighs on French business activity in September: PMI
French business activity fell in September for the first time since June as the service sector kept losing momentum in the face of concerns about rising COVID-19 infection rates, a survey showed on Monday.
Data compiler IHS Markit said its purchasing managers index, covering the services and manufacturing sectors, fell to 48.5 from 51.6 in August, unchanged from a preliminary reading.
· No tax increases in Germany during the pandemic: Economy Minister
Germany should not raise taxes during the pandemic, Economy Minister Peter Altmaier said on Monday, adding that there was a case for lowering taxes in some areas, such as for high-earning skilled workers.
· Lira slide towards eight-per-dollar highlights Turkey economic pressure points
The Turkish lira’s move towards the 8-to-the dollar mark will compound its 25% slide this year, amplifying existing pressures on companies and the broader economy.
Below are three charts illustrating the pressure points for Turkey, where the currency is enduring its eighth straight year of losses, having lost more than 80% of its value in the past decade.
· China’s tech giants face ‘new business realities’ across the world
China — China’s technology giants — like their U.S. counterparts — have seen business thrive during the coronavirus pandemic. But the tech industry is at a crossroads, facing an uncertain economic and geopolitical environment.
China’s gradual though uneven economic recovery, Beijing’s focus on domestic consumption, and the digital trends that have been accelerated by Covid-19 are all set to benefit the technology sector. But risks remain.
· Japan's September service sector activity shrinks at slowest pace since pandemic's start
Activity in Japan’s services sector contracted for the eighth straight month in September but at the slowest pace since the coronavirus pandemic started wreaking havoc on the economy, a private business survey showed on Monday, in a sign that demand is starting to steady.
The final Jibun Bank Japan Services Purchasing Managers’ Index (PMI) rose to its highest in eight months, coming in at a seasonally adjusted 46.9 from 45.0 in the previous month.
· BOJ's Kuroda warns pandemic to keep economic uncertainty 'very high'
Bank of Japan Governor Haruhiko Kuroda said on Monday uncertainty over the country’s economic and price outlook remained “very high” as the coronavirus pandemic continued to inflict pain on global growth.
Kuroda said the world’s third-largest economy was emerging from a severe downturn caused by the pandemic and was likely headed for a moderate recovery.
· Taiwan hopes Trump gets better so he can keep resisting China
Taiwan hopes that U.S. President Donald Trump can get better from the coronavirus soon so that he can continue to lead the free world in resisting China’s “outrages”, the speaker of the island’s parliament said on Monday.
· Malaysia’s debt is set to rise as it grapples with the Covid-19 pandemic
Malaysia’s debt levels are set to go up, says its finance minister, as the country embarks on measures to support businesses and citizens to deal with the economic fallout from the conoravirus.
“We’re anticipating and forecasting that deficit will go up this year for Malaysia,” Tengku Zafrul Aziz told CNBC, adding that fiscal deficit will come in at around 5.8% to 6%. So far, fiscal injections into the economy stand at around 20% of its GDP, according to Zafrul.
“We are still focused on fiscal responsibility, of course. We have debt-to-GDP now at around 53%, it will end at around 56%. We have approval from parliament to go up to 60%,” he said Monday during an interview on CNBC’s “Asia Squawk Box.”
· Oil prices rebound 2% on Trump's health, Norway strike escalation
Oil prices rose more than 2% on Monday, lifted by comments from doctors for U.S. President Donald Trump suggesting he could be discharged from hospital as soon as Monday, just a few days after his positive coronavirus test sparked widespread alarm.
Trump’s health update eased political uncertainty in global markets, pushing Brent up to $40.10 a barrel by 0613 GMT, gaining 83 cents or 2.1%. U.S. West Texas Intermediate (WTI) crude was at $37.94 a barrel, up 89 cents, or 2.4%.
Oil was also supported by an escalating workers’ strike in Norway that has shut four of Equinor’s oil and gas fields. The strike could reduce the country’s production capacity by as much as 330,000 barrels of oil equivalent per day (boepd) or 8% of its total output, according to the Norwegian Oil and Gas Association.
Reference: Reuters, CNBC
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