· Dollar reigns supreme on U.S. Treasury yields, economic recovery advantage
The dollar held near a 3 1/2-month high against its rivals on Tuesday as higher bond yields and expectations of faster economic normalisation from the pandemic in the United States put the U.S. currency at an advantage.
The dollar index against six major currencies rose 0.1% to 92.469, its highest since late November, building on a 0.5% gain on Monday.
Against the yen, the dollar rose to 109.235 yen, its highest level in nine months, while the euro was nearly flat at $1.18530, hovering near lows last seen in late November.
The safe-haven Swiss franc softened to 0.9369 per dollar, its lowest level since late July, while the British pound inched up 0.1% to $1.3834, having touched a three-week low of $1.3779 on Friday.
· U.S. House will take up Senate's $1.9 trillion coronavirus bill by Wednesday: Pelosi
The U.S. House of Representatives will take up by Wednesday the Senate version of the sweeping $1.9 trillion coronavirus relief package backed by President Joe Biden, Speaker Nancy Pelosi said on Monday.
Closing in on final approval of one of the biggest U.S. anti-poverty measures since the 1960s, Democrats aim to enact the massive legislation by Sunday, when enhanced federal unemployment benefits are set to expire.
· Senate passes stimulus package
The U.S. Senate passed the $1.9 trillion stimulus package, with minor amendments. The bill returns to the House of Representatives on Monday and may be voted through in its amended form on Tuesday, according to various reports.
The Senate left most of the package unchanged but trimmed plans for weekly unemployment benefits to $300 from an initial $400. The benefits will also now end in September, a month earlier than foreseen earlier. The proposal for a $15/hour federal minimum wage had been withdrawn at an earlier stage.
Despite some grumbling from the left wing of the party, the bill is expected to pass its second vote in the House and be signed into law later this week.
· Time to double down — not let up, WHO chief scientist warns as Covid cases rise
· UK consumer spending hit again as lockdown goes on: Barclaycard
British consumers cut back heavily on spending as they spent a second month in a COVID-19 lockdown in February but confidence in the economy hit a 12-month high, payment card firm Barclaycard said on Tuesday.
Consumer spending was 13.8% lower than a year before, similar to January’s plunge of around 16%, Barclaycard said.
Spending on essential items grew 5.3% and online grocery shopping surged. But spending on non-essentials plummeted 22.1% with many businesses still closed.
After suffering its biggest slump in three centuries last year, Britain’s economy is expected to grow strongly once the COVID restrictions are lifted between now and late June.
Barclaycard said a survey which it had commissioned showed consumers’ confidence in the wider economy rose by 4 percentage points to 28%, its highest point since the pandemic hit last year.
· Chinese official says Hong Kong electoral changes will 'protect' international role
Beijing’s plans to change Hong Kong’s electoral system will protect the city’s international role, a senior Chinese official said on Tuesday, as critics decry the move as an end of democratic hopes in the former British colony.
· China launches COVID-19 vaccination certificates for cross-border travel
China has launched a digital COVID-19 vaccination certificate for its citizens planning cross-border travels, joining other countries issuing similar documents as they seek ways to reopen their economies.
· Japan picks Nomura Asset CEO to join central bank board
Japan’s government picked Junko Nakagawa, the first female CEO of Nomura Asset Management, on Tuesday to join the central bank’s fragmented nine-member board that faces the challenge of tackling the side-effects of prolonged monetary easing.
· Japan downgrades fourth-quarter GDP as companies scale back spending
Japan’s economy expanded at a slower-than-initially-reported pace in October-December, with firms tightening spending on plant and equipment as the coronavirus pandemic clouded their business plans.
The slower growth was mainly due to a sharper contraction in private inventories and capital expenditure expanding less than previously thought in the fourth quarter, even as exports remained solid.
Separate data showed household spending was hit by a much bigger annual drop in January than in the prior month, a sign the COVID-19 pandemic was keeping consumers cautious about shopping.
The economy grew an annualised 11.7% in October-December, weaker than the preliminary reading of 12.7% annualised growth to mark the second straight quarter of growth, Cabinet Office data showed Tuesday.
The reading, which was weaker than economists’ median forecast for a 12.8% gain, translates into a real quarter-on-quarter expansion of 2.8% from October-December, versus a preliminary 3.0% gain.
Capital spending grew 4.3% from the previous quarter, lower than a preliminary 4.5% rise, but outpacing the median forecast for a 4.1% increase
Private inventories, including raw materials and manufactured products, subtracted 0.6 percentage point from revised gross domestic product growth (GDP), which was more than a negative preliminary contribution of 0.4 percentage point.
“Although vaccination started in Japan, it will take time to yield its impact, so the economy is forecast to go though some ups and downs,” said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute.
“We expect the economy will pick up from the second quarter but it will be difficult to regain soon what it will lose in the first quarter.”
· Southeast Asia's first Bitcoin fund launches to meet local institutional demand
The Malaysia-based BCMG Genesis Bitcoin Fund-I, or BGBF-I, has officially launched, claiming to have become the first insured institutional crypto product available in the Southeast Asian region.
An announcement states the fund launched in response to a growing demand for institutional crypto products in Southeast Asia. The fund leverages an Artificial Intelligence (AI) powered blockchain-based platform provided by Calfin Global Crypto Exchang, which purports to offer increased security for customer holdings.
· Indonesia approves AstraZeneca vaccine for emergency use
· Myanmar protesters able to leave Yangon district after being trapped
Hundreds of young Myanmar protesters who had been trapped by security forces in a district of Yangon overnight have been able to get out, activists said on Tuesday, after calls from western powers and the United Nations for them to be allowed to leave.
· Malaysia court allows rights groups to challenge Myanmar deportations
· $70 Oil May Cause Slowdown In Demand Recovery
While the unexpected rollover of the OPEC+ production cuts sent Brent Crude prices up to $70 a barrel, the highest oil prices in more than a year could dampen global oil demand recovery, which the OPEC+ group itself still sees as fragile.
After the surprise OPEC+ move last week, crude oil prices rallied faster and higher than many forecasters had predicted just a week ago as the market expects supply shortages amid recovering demand.
Oil at $70 a barrel is good for oil bulls, oil companies, and the oil-dependent budgets of most OPEC+ producers, but it is not good news for prices at the pump or oil-importing nations, including the key demand growth drivers China and India.
In addition, higher oil prices will put additional inflationary pressure on economies recovering from the pandemic slump, and raise the prices of many goods and services, including airplane tickets and imported goods in the United States, Dion Rabouin of Axios notes.
· U.S. Oil Refineries Still Down And Out After Freeze
Just seven U.S. oil refineries out of the 18 that were down due to the Texas Freeze are operating normally as of Monday, according to Bloomberg.
Those 18 refineries that were down accounted for as much as 5.5 million barrels of crude processing capacity per day.
As a result of the Texas Freeze, according to Energy Information Administration data, weekly U.S. percent utilization of refinery operable capacity dipped to 56% during the week ending February 26—the lowest operable utilization of operable capacity since the EIA began tracking the data in November 1990.
· U.S. Sells 10 Million Barrels Of Oil From Strategic Petroleum Reserve
The U.S. Department of Energy has awarded contracts for the sale of 10.1 million barrels of crude oil from the Strategic Petroleum Reserve (SPR) as part of a recent Congressionally-directed SPR crude oil sale.
The Department of Energy’s Office of Fossil Energy issued in early February 2021 a notice of sale from the SPR to fulfill the requirements of a mandatory sale of 10.1 million barrels during the fiscal year 2021. The proceeds of the sale will be deposited in the U.S. Treasury by the end of the fiscal year, DOE said last month.
· Oil prices fall as Saudi supply risks abate, stronger dollar
Oil prices fell on Tuesday, reversing earlier gains, on receding fears of a supply disruption in Saudi Arabia, the world’s biggest oil exporter, after an attack on its export facilities, and on concerns a stronger U.S. dollar would crimp demand.
Prices rose earlier on expectations of a recovery in the global economy after the U.S. Senate approved a $1.9 trillion stimulus bill and on a likely drawdown in crude oil inventories in the United States, the world’s biggest fuel consumer.
Brent crude futures for May fell by 46 cents, or 0.7%, to $67.78 a barrel by 0736 GMT, after earlier rising to a session high of $69.
U.S. West Texas Intermediate (WTI) crude for April slipped by 52 cents, or 0.8%, to $65.53, after earlier rising to as high as $65.68.
“Crude prices are declining as the strong dollar trade shows no signs of weakening,” said Edward Moya, senior market analyst at OANDA.
Reference: CNBC, Reuters, Investing, Oilprice, Bloomberg
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