MACRO ECONOMIC NEWS

TOGETHER, WE WILL TRANSCEND - STRONGER, CLEARER AND CHEERFUL. WISHING A RESILIENT WEEK AHEAD.

Macro Economic News 11 May 2020

 

News stories often describe the coronavirus-induced global economic downturn as the worst since the Great Depression. This is likely to be literally true, yet for many, the comparison does more to terrify than clarify. Economists say there is likely to be a big difference between a downturn that is the worst since the Depression and conditions as bad as the Depression. The wealth concentration (top 0.1% richest adults’ share of total household wealth) was close to 25% in 1930s, while unemployment rose to 25% over three years whereas 2020 witnesses similar wealth concentration (highest since 1930s) with unemployment rising to similar level in just three months. Seems speed is the most significant difference between these two, so as the recovery. World is heading to reopen although new virus outbreaks hamper efforts to reopen global economy. Prime Minister Boris Johnson said that there will be no immediate end to the coronavirus lockdown in Britain, setting out plans to begin gradually easing some of the measures which have shut down much of the economy for nearly seven weeks as UK retailers warn of ‘imminent collapse’ without more state help. Federal Reserve officials are unlikely to consider using negative interest rates to stimulate economic growth after concluding the tool’s clear costs outweigh its uncertain benefits. French, Dutch join forces to urge EU to show teeth on trade while China Pledges Stronger Monetary Policy to Soften Growth Hit and Argentina on brink of ninth debt default. India issues guidelines for post-lockdown factory restarts after fatal gas leak and Indian Railways to resume select passenger train services from May 12 while Govt mulls credit guarantee scheme for loans for payment of wages by MSMEs.

 

FINANCIAL TIMES

[I]  New virus outbreaks hamper efforts to reopen global economy

[I]  Will it be a downsized Dubai that emerges from pandemic?

[I]  Wall St banks’ trading risk surges to highest since 2011

[I]  Coronavirus deepens north-south divides in Italy and Spain

[I]  Argentina on brink of ninth debt default

[I]  Sweden unlikely to feel economic benefit of no-lockdown approach

[I]  Multinationals fear rise in protectionism because of pandemic

[I]  UK retailers warn of ‘imminent collapse’ without more state help

 

REUTERS

[I]  India issues guidelines for post-lockdown factory restarts after fatal gas leak

[I]  White House considers more coronavirus aid as jobs picture worsens

[I]  No end to UK lockdown but some measures will be eased, says PM Johnson

[I]  Japan PM says ready to take more stimulus steps to combat pandemic

[I]  Washington in talks with chipmakers about building U.S. factories

[I]  French, Dutch join forces to urge EU to show teeth on trade

[I]  U.S. unemployment rate will get worse, Treasury's Mnuchin says

[I]  UK wants to 'slowly and cautiously' ease lockdown to restart economy - minister

 

BLOOMBERG 

[I]  ‘Stealth’ RBI Support May Turn to Large Scale India Bond Buying

[I]  South Africa’s Rand at Rock Bottom May Have Nowhere to Go But Up

[I]  Fed Flying Blind on Economic Outlook as U.S. Slowly Reopens

[I]  Argentina Awaits Creditor Counteroffers as Deadline Passes

[I]  Clouds Hover Over Australian Wheat Output

[I]  IMF Keeps Faith That One of Global Fiscal Outliers Can Beat Odds

[I]  Australia Budget Deficit Will Swell to 7.2% of GDP in 2020, 2021

[I]  Risks Abound in Emerging Markets as Traders Grapple With Shocks

[I]  China Pledges Stronger Monetary Policy to Soften Growth Hit

 

WALL STREET JOURNAL

[I]  Coronavirus Downturn Versus Great Depression

[I]  Despite Recent Bets, Fed Isn’t Likely to Consider Negative Interest Rates

[I]  Economy Week Ahead: Inflation, GDP, Retail Sales

[I]  April Jobs Report Shows Record Unemployment

[I]  Company Layoffs Mount as Recovery Appears Elusive

 

BUSINESS LINE

[I]  FM to review credit flow by PSBs on May 11

[I]  Time for textiles industry to reorient, stop seeking packages, says Smriti Irani

[I]  India’s coal production to clock record 700 million tonnes in FY21: Coal Secretary

[I]  India’s fuel consumption dips 46 per cent in April; expected to rebound in May

[I]  From May 12, Indian Railways to resume select passenger train services

[I]  MSMEs may get working capital boost with overdraft

 

ECONOMIC TIMES

[I]  Economic revival depends not just on money, but also faith

[I]  Covid crushes students' dreams of studying abroad

[I]  Ex-RBI governor on India's ideal spending plan

[I]  Taxmen are preparing to go hard on defaulters

[I]  Second coronavirus stimulus could be unveiled this week

[I]  Rising stress: About 70% micro loan borrowers want moratorium as household cash flow depletes

[I]  Govt mulls credit guarantee scheme for loans for payment of wages by MSMEs

 

BUSINESS STANDARD

[I]  Mumbai scrambles to add critical care infrastructure amid Covid-19 spread

[I]  India may set 10% beneficial ownership cap for FDI flowing from 7 countries

[I]  Lockdown 3.0: Re-starting production a task cut out for India Inc

[I]  Lockdown 3.0: Elders going big on e-commerce and use of digital wallet

[I]  India needs large fiscal stimulus in face of slowdown risk: Kaushik Basu

[I]  Bond yields expected to jump 15-20 bps on govt's extra borrowing

 

MARKETS (07:30 am)

[I]  SGX NIFTY Fut: 9361;  USDINR DGCX: 75.7525;  DJIA Mini: 24450;  FTSE 100 Fut: 5976;  NIKKEI 225 Fut: 20510;  EUR-USD: 1.0847; Crude Oil (WTI): 24.18;  Gold (Spot): 1710

 

Best Regards, ARBIND
11 May 2020