· Dollar buoyed by rising U.S. yields amid new stimulus prospects
The dollar held four days of gains against major peers on Tuesday as the prospect of massive fiscal stimulus pushed U.S. yields higher.
President-elect Joe Biden, who takes office on Jan. 20 with his Democratic party in control of both Houses, has promised “trillions” in extra pandemic-relief spending.
The dollar index has rebounded from a nearly three-year low reached last week as the benchmark 10-year U.S.
Treasury yield topped 1% for the first time since March and rose as high as 1.148% overnight.
The dollar index was little changed at 90.578 in Asian trading, having risen as high as 90.73 overnight for the first time since Dec. 21. It dipped to 89.206 on Jan. 6, a level not seen since March 2018.
“It’s complicated because higher U.S. yields are giving the dollar a bounce, but stimulus could support U.S. equities, and the dollar would remain weak,” said Osamu Takashima, head of G10 FX strategy at Citigroup Global Markets Japan in Tokyo.
“In the medium-term, we remain bearish on the dollar. Dollar assets look expensive.”
The greenback added 0.1% to 104.305 yen, after rising to a one-month high of 104.40 on Monday.
The euro was largely steady at $1.21425 after slipping to $1.21320 in the previous session for the first time since Dec. 21.
Meanwhile, China’s yuan edged up against the dollar on demand for cash ahead of next month’s Lunar New Year holiday.
Onshore spot yuan opened at 6.4770 per dollar and was changing hands at 6.4712 at midday, 81 pips stronger than the previous late session close.
Bitcoin was trading at $35,186 as its red-hot rally has faltered since it soared to an all-time high of $42,000 on Jan. 8.ฃ
· U.S. President-elect Joe Biden on Monday received the second dose of the COVID-19 vaccine, four weeks after he was administered the first shot.
Biden was injected the second dose of the Pfizer-BioNTech vaccine at a hospital in Newark, Delaware, his home state where his transition headquarters is based. He received the first dose on Dec. 21.
· President-elect Biden receives second vaccine dose
President-elect Joe Biden received his second course of the Pfizer-BioNTech Covid-19 vaccine at Christiana Hospital in Newark, Delaware. The vaccine was administered by Chief Nurse Executive Ric Cuming.
After receiving his injection, the pool asked Biden if he had confidence in his coronavirus task force given reports that he was disappointed in their progress. “Number one, my number one priority is getting vaccine into peoples’ arms like we just did today as rapidly as we can. And we’re working on that program now. I’ll be meeting on a Zoom call with my team a little later this afternoon,” Biden said.
· Moderna doesn’t expect Covid vaccine data for young children until 2022
Moderna CEO Stephane Bancel said the company doesn’t expect to have clinical trial data on its coronavirus vaccine in young children until 2022.
The company has already begun a study testing the vaccine in adolescents as young as 12, and Bancel expects that study will be done by the time the fall semester starts in September. It expects to start a study for young children between ages 1 and 11 “soon,” but Bancel said that study will take “much longer.”
“We have to start a lower dose, so we should not see clinical data in 2021 but more [likely] in 2022,” he said during a presentation at the JPMorgan Healthcare Conference.
· Rite Aid CEO says retailers could get tapped for vaccine rollout sooner than expected
· WHO warns new Covid variants are ‘highly problematic’
World Health Organization’s top official warned that new Covid-19 variants that appear to be more infectious than previous strains are “highly problematic” and could burden hospitals already under intense pressure.
WHO officials were notified over the weekend of a new Covid-19 strain discovered in Japan, joining other variants first identified in the United Kingdom and South Africa, WHO Director-General Tedros Adhanom Ghebreyesus said during a press briefing.
· More than 375,000 people in the U.S. have died from Covid
More than 375,000 people have now died from Covid-19 in the U.S., according to the latest tally from Johns Hopkins University.
The national death toll continues to rise rapidly, with more than 3,200 people succumbing to the virus each day on average.
Only one other country, Brazil, has reported a death toll north of 200,000 people, according to JHU.
· Top LA County health official: Covid kills someone every 8 minutes
The coronavirus kills someone in Los Angeles County every eight minutes, Public Health Director Barbara Ferrer said during a press briefing. In just the past seven days, the county has reported more than 1,500 Covid-19 deaths, she said.
Coronavirus cases in Los Angeles County have increased nearly 900% since Nov. 1, prior to the holiday season, Ferrer said. The county is now reporting roughly 10 positive Covid-19 cases every minute, and at least 10% of all infections end up in the hospital, she said.
“Now is the time to stay home as much as possible,” Ferrer said. “Now is the time to avoid, as much as possible, contact with others that aren’t in your household.”
· Japan to reportedly widen state of emergency beyond Tokyo as Covid surges
Japanese Prime Minister Yoshihide Suga told a meeting of ruling party executives on Tuesday he would declare a state of emergency for the three western prefectures of Osaka, Kyoto and Hyogo to stem the spread of COVID-19, Kyodo news reported.
Responding to pressure from Tokyo and three neighboring prefectures in eastern Japan, Suga last week declared a one-month state of emergency for that region until Feb. 7.
· Covid-19 update: India reports over 12k new cases, 167 deaths
India recorded 12,584 new cases of coronavirus in the last 24 hours on Tuesday, which is country's lowest single-day figure in over seven months. With the new addition, India's overall tally to 1,04,79,179. Prior to this, the lowest number was recorded on June 17 last year, when the country had logged in 12,881 fresh Covid cases in a day.
Meanwhile, the country reported 167 deaths in the past 24 hours, taking the overall fatality toll of the country to 1,51,327, the Ministry of Health and Family Welfare said. It is the second consecutive day when the country had reported below 200 deaths in a single day. Since the last 18 days, less than 300 new deaths per day have been recorded across the country. According to the Ministry, till now, 1,01,11,294 people have recovered. Currently, there are 2,16,558 active cases in the country. The recovery rate stands at 96.43 per cent while the fatality rate is 1.44 as per cent.
· Democratic drive to impeach Trump after Capitol siege speeds ahead
Democrats will give President Donald Trump one last chance on Tuesday to leave office days before his term expires or face an unprecedented second impeachment over his supporters’ deadly Jan. 6 assault on the U.S. Capitol.
The Democratic-led House of Representatives plans to vote as soon as Wednesday on formal charges of misconduct, known as articles of impeachment, unless Trump resigns or Vice President Mike Pence moves to oust him under a provision in the U.S. Constitution.
· Deutsche Bank will not do future business with Trump: NYT
Deutsche Bank will not do business in the future with U.S. President Donald Trump or his companies in the wake of his supporters’ deadly Jan. 6 assault on the U.S. Capitol, the New York Times reported.
Deutsche Bank is Trump’s most important lender, with about $340 million in loans outstanding to the Trump Organization, the president’s umbrella group that is currently overseen by his two sons.
Reuters reported in November that Deutsche was looking for ways to end its relationship with Trump after the U.S. elections, as it tires of the negative publicity stemming from the ties.
· Biden could struggle with Taiwan issue rocking U.S.-China relations, says political risk expert
· Japan's price expectations weaken as pandemic stokes deflation fears
Japanese household inflation expectations hit an eight-year low in the three months to December, a central bank survey showed on Tuesday, suggesting the coronavirus pandemic has heightened deflationary risks in the world’s third-largest economy.
The outcome highlights the challenge the Bank of Japan faces in firing up inflation to its elusive 2% target, and keeps it under pressure to support an economy hit by a newly issued state of emergency to combat the pandemic.
The ratio of households who expect prices to rise a year from now stood at 60% in December, down from 63.3% in September and hitting the lowest level since December 2012, the BOJ’s quarterly survey on households showed.
In a sign deflationary pressure was already heightening, the ratio of those who thought prices have risen from a year ago fell to 60.5% in December from 65.9% in September, it showed.
· ‘A dangerous game of chicken’: Iran sets up challenge for Biden with nuclear ramp-up
What does 20% enrichment mean?
Just how important is that 20% nuclear enrichment figure? For starters, 20% constitutes highly-enriched uranium and was the level at which Iran was enriching uranium between 2010 and 2013, before the JCPOA was agreed. Its activities led Iran to be hit with the toughest sanctions ever coordinated by the U.S. and EU together.
Under the nuclear deal, by contrast, Iran was only allowed to enrich to 3.67% U-235. U-235 is the isotope of uranium that can sustain a fission chain reaction.
“Iran appears to be trying to maximize its leverage with the Biden administration in the hope that the U.S. will agree to re-enter, rather than attempt to renegotiate, the JCPOA,” Anne Harrington, professor of international relations and a specialist in nuclear non-proliferation at Cardiff University in Wales, told CNBC.
Behnam Ben Taleblu, a senior fellow at the Foundation for Defense of Democracies, shared Harrington’s prediction. “By upping the nuclear ante, Tehran is hoping to create a crisis, a crisis which it hopes the U.S. will defuse with premature sanctions relief.”
The minimum threshold for a crude nuclear weapon is 400kg of uranium enriched to 20% U-235 — but weapons grade uranium is 90% U-235, nuclear experts told CNBC. Still, they explained, reaching 3 to 4% enrichment equates to roughly two-thirds of the work done toward that 90% figure, as any increases beyond that amount disproportionately speed up breakout time.
Biden has expressed his aim to return to some form of the 2015 deal;
some of his top foreign policy picks were the original negotiators and architects of the deal. But Tehran is not likely to make it an easy return, demanding compensation for the economic damage it suffered under the last few years of sanctions and other U.S. concessions.
“This is a double edged sword, both for the Iranians and the Biden administration,” said Sanam Vakil, deputy head of Chatham House’s MENA Program. The Iranians are wary of returning to the table too quickly, while for Biden, “the optics are quite difficult to justify giving in to the Islamic Republic and giving in to pressure tactics, particularly in light of the past criticism of the deal.”
By ramping up the leverage with the nuclear moves and the South Korean tanker seizure, “Iran wants to remind the international community, and particularly the Biden administration, that Iran doesn’t only have the diplomatic path,” Vakil said.
“There is this impulse inside the country to use pressure to extract concessions.”
· India’s supreme court puts on hold the implementation of new controversial farm laws
India’s Supreme Court on Tuesday temporarily paused the implementation of new agricultural laws that have led to widespread protests from farmers.
The court will form a committee to hear farmers’ grievances against the laws, Chief Justice Sharad Arvind Bobde said during a hearing.
· Oil prices rise on expected inventory drawdown; virus concerns cap gains
Oil prices rose on Tuesday on expectations of a drawdown in crude oil inventories in the United States for a fifth straight week, but investor worries over climbing coronavirus cases globally capped price gains.
Brent crude oil futures climbed 22 cents, or 0.4%, to $55.88 a barrel by 0703 GMT, while U.S. West Texas Intermediate (WTI) gained 25 cents, or 0.5%, to $52.50 a barrel.
Reference: CNBC, Reuters
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