RETHINK, RECREATE, AND REBOUND. WISHING A RECOVERING WEEK AHEAD.

Macro Economic News 16 May 2020

 

India is expected to produce a record 107 million tonnes of wheat this year. FM announced ₹1.5-lakh-cr booster targeting agriculture sector while a study finds more than 80% Indian households have already lost income during lockdown whereas ADB thinks global economy could witness losses worth up to $8.8 trillion due to Covid-19. U.S. House passes $3 trillion aid bill while Fed warns of significant hit to asset prices if crisis grows although Michigan sees budget gap twice as big as last recession’s. Industrial Production in U.S. fell by 11.2% in April, the steepest drop in records in more than 100 years. A current round of Brexit talks ended in a stalemate, adding another economic anxiety whilst Germany enters recession but fares better than neighbours leading to the Eurozone’s need to soften its rules and accept high-yield debt as collateral. China’s economic activity showed some signs of improvement though rising joblessness continued to weigh heavily on consumer spending. Record drops in spending and industrial output show the scale of economic disruption from lockdowns and soaring unemployment across geographies hurting women the  most while huge stimulus could lead to ‘red hot’ price rises over the longer term.

 

FINANCIAL TIMES

[I]  US escalates China tensions with tighter Huawei controls

[I]  Plunge in US industrial and retail activity in April laid bare

[I]  Brexit talks stall as UK resists EU demands on fair competition

[I]  German GDP shrinks by 2.2% in first quarter

[I]  Trump threatens to cut off relations with China

[I]  China industry rebounds in April from coronavirus lows

[I]  The ECB must shift to a wholesale acceptance of junk bonds 

 

REUTERS

[I]  U.S. House passes $3 trillion coronavirus aid bill opposed by Trump

[I]  Japan, U.S. to set up economic security dialogue: Yomiuri

[I]  Italy to allow travel to and from abroad from June 3

[I]  'We Are The World' to get an 'American Idol' alumni encore 

[I]  Indian farmers to harvest record rice, wheat crops this year

[I]  IMF's Georgieva urges tech firms to work on access to digital economy for all 

[I]  Argentina's creditors make counter offers as debt restructuring deadline nears

 

BLOOMBERG 

[I]  Fed Warns of Significant Hit to Asset Prices If Crisis Grows

[I]  U.S. Economy Adds to Grim Records, Signaling Yearslong Recovery

[I]  Michigan Sees Budget Gap Twice as Big as Last Recession’s

[I]  Argentina’s Top Creditors Submit New Debt Proposals

[I]  Australian Banks Defer Repayments on $98 Billion of Home Loans

[I]  France Outlook Revised to Negative by Fitch Amid Coronavirus

 

WALL STREET JOURNAL

[I]  Virus Drives Rapid Declines in Factory Output, Retail Sales

[I]  Industrial Production in U.S. Fell 11.2% in April

[I]  Coronavirus Employment Shock Hits Women Harder Than Men

[I]  Chinese Economy’s Recovery From Coronavirus Starts Off Slowly

[I]  Germany Enters Recession but Fares Better Than Neighbors

[I]  Brexit Talks Go Nowhere, Adding New European Economic Headache

 

BUSINESS LINE

[I]  Goods exports fall 60.28 per cent in April as virus takes its toll

[I]  Ending APMC monopoly: Centre bites the bullet at last

[I]  Atmanirbhar Bharat: Interest subvention to ease working capital crisis in dairy sector, says NDDB

[I]  Third tranche of ‘Aatmanirbhar Bharat Abhiyan’: Agriculture sector gets ₹1.5-lakh-cr booster

[I]  Monsoon may arrive over Kerala by June 5, says IMD

[I]  Global economy could witness losses worth up to $8.8 trillion due to Covid-19: ADB

 

ECONOMIC TIMES

[I]  PMO weighs SOP for labourers, district help desk

[I]  Skilled NRI returnees’ database planned

[I]  Govt's new MSME definition sows confusion

[I]  Forex reserves surge by $4.235 billion to $485.31 billion

[I]  Government can use the escape clause in the FRBM Act to monetise the deficit: Usha Thorat

[I]  Stimulus packages will have impact of Rs 1.29 lakh cr on fiscal deficit: SBI Report

[I]  Govt prepares a list of 10 mega clusters across nine states to attract global companies

 

BUSINESS STANDARD

[I]  Covid-19 crisis: Donald Trump may tax firms manufacturing outside US

[I]  A 'Jai Kisan' stimulus: FM Sitharaman pushes long-sought agri reforms

[I]  FM's Day 3 stimulus: Agriculture, allied activities get Rs 1.5-trn package

[I]  Exports fall at fastest pace in 25 yrs in April due to coronavirus lockdown

[I]  More than 80% Indian households lost income during lockdown, says study

 

Best Regards, ARBIND

16 May 2020

MY REFUGE, MY FORTRESS, MY GOD WHOM I TRUST. WISHING A REASSURING DAY AHEAD.

Macro Economic News 15 May 2020

The country-wide lockdown, introduced in late March, has led to a labour shortage across rural India, crimping the harvest and preventing the bagging and movement of it. India is aggressively pushing a state-backed contact tracing app to fight the spread of COVID-19, raising fears that the world's second-most populous nation is on its way to Chinese-style methods of high tech social control. The economic shock hit lower-income households first and immediately left them much worse off, according to a new survey from the Federal Reserve. Without federal help, frugal and profligate states alike will have to tighten their belts, deepening the recession and slowing the recovery. Japan lifts state of emergency in most prefectures as Covid-19 cases fall. ILO warns Indian states on scrapping of workers' rights while FM extends Rs 3.2-trillion stimulus to migrant workers and farmers. Indian farmers gather record wheat crop, but cannot move it due to labour shortage whereas Centre looks to nudge more MSMEs into manufacturing to reduce imports and Govt refashions 'One Nation One Ration Card' as relief measure for migrants.

FINANCIAL TIMES

[I]  US jobless claims rise to 36m since start of lockdowns

[I]  Banking: the great return to the office

[I]  Resilient builders lay foundation for German economy to outperform

[I]  WTO chief Roberto Azevêdo to step down early

[I]  Modi the reformer reappears as coronavirus hits India’s economy

[I]  Germany faces €82bn tax receipts shortfall because of coronavirus

[I]  Japan lifts state of emergency in most prefectures as Covid-19 cases fall

[I]  US airlines eye job cuts once bailout strings expire

REUTERS

[I]  Farmers gather record wheat crop, but cannot move it

[I]  ILO warns Indian states on scrapping of workers' rights

[I]  France defends equal access to any vaccine as U.S. eyes its own plans

[I]  China's top energy firms to grow gas output despite spending cuts

[I]  China healthcare investment booms on virus-related spending bets

[I]  China stats bureau expects economic recovery to continue

[I]  U.N. gathering of world leaders unlikely to be 'business as usual'

[I]  India follows China's lead to widen use of coronavirus tracing app

BLOOMBERG 

[I]  China Unveils Financial Support to Tie Hong Kong, Macau Closer

[I]  China Posts Better Industrial Data While Retail Remains Weak

[I]  Fed Buys $305 Million of ETFs at Launch of Historic Program

[I]  Cryptocurrency Market Is Becoming Even More Concentrated

[I]  Banks Refusing to Lend in India Prompt $62 Billion Rescue Deal

[I]  Mexico Stirs Confusion Over When the Auto Industry Can Reopen

[I]  Japan’s Recession to Be Confirmed With Worse Yet to Come

WALL STREET JOURNAL

[I]  Economic Shock of Virus Hit Lower-Income Households Harder, Fed Finds

[I]  Nearly Three Million Sought Jobless Benefits Last Week

[I]  Coronavirus Drives 75% of Small Businesses to Seek Federal Aid

[I]  Newsletter: ‘The Recovery May Come More Slowly Than We Would Like’

[I]  Powell Says Washington Will Need to Spend More to Battle Downturn

[I]  WSJ Survey: Coronavirus to Cause 17% Unemployment in June

BUSINESS LINE

[I]  In second tranche, FM puts migrants, farmers first

[I]  Covid-19 to have significant deflationary impact due to fading demand: CEA

[I]  WPI food inflation declines in April to 3.60 per cent

[I]  Electricity bills will come down by 25%, says Power Minister

[I]  Fiscal deficit to balloon to 7.9 per cent in FY21: Report

[I]  MGNREGA support: Work generated in coming days is the key

ECONOMIC TIMES

[I]  Consumer firms ready with jobs, but where are the workers?

[I]  Hindi heartland states gear up for spike in cases

[I]  PE, VCs eye slice of Rs 50k-cr MSME fund

[I]  Yields fall as bond street cheers enhanced credit flow

[I]  Kaushik Basu warns against overdependence on RBI for stimulus

[I]  Not create unnecessary trade barriers, allow essential cross-border travel: G-20 trade ministers

[I]  No TDS cut for salaried to avoid compliance burden: Finance Secy

BUSINESS STANDARD

[I]  FM extends Rs 3.2-trillion stimulus to migrant workers and farmers

[I]  Changes in consumer behaviour to drive brands to rethink positioning norms

[I]  Urge all states to take special loan, pass benefit to consumers: R K Singh

[I]  Work from home to be new normal for govt offices after lifting of lockdown

[I]  Centre looks to nudge more MSMEs into manufacturing to reduce imports

[I]  Govt refashions 'One Nation One Ration Card' as relief measure for migrants

[I]  Sebi relaxes 25% minimum public shareholding norms, deadline postponed

MARKETS (10:30 am)

[I]  SGX NIFTY Fut: 9075;  USDINR DGCX: 75.5400;  DJIA Mini: 23585;  FTSE 100 Fut: 5781;  NIKKEI 225 Fut: 20020;  EUR-USD: 1.0806; Crude Oil (WTI): 27.87;  Gold (Spot): 1732

Best Regards, ARBIND

15 May 2020

TRANQUIL IS THY PLACID SMILE. WISHING A GENTLE DAY AHEAD.

Macro Economic News 14 May 2020

India’s government has redefined MSMEs and said it will offer nearly $60 billion of loan guarantees for small businesses, shadow banks and power companies as part of measures to combat the economic damage caused by the novel coronavirus pandemic. Poor, farm sector are likely to be FM Nirmala Sitharaman's next focus while ASSOCHAM is hopeful to see around 4% growth if PM Modi’s package is pumped into economy. A monthly WSJ survey found economists expect gross domestic product to shrink 6.6% this year, and the unemployment rate to hit 17% this June. FED Chairman Jerome Powell urged to spend more money to ensure their initial response to the coronavirus-induced economic contraction isn’t wasted amid evidence that recovery will take longer than first thought. European holidaymakers hoping to catch a plane this summer will have to wear masks and travel light under guidelines set out by the European Commission. Workers stoical as easing spurs fears of overcrowding although European investment plunge raises fears for future growth. People's Daily writes, China needs more active fiscal policy as pressure on economy increasing whereas Hong Kong’s economic crisis just keeps getting worse. Australia employment slumps by record number while farmers’ hopes are dashed in Australia on souring of china ties.

FINANCIAL TIMES

[I]  Fiscal stimulus ‘worth it’ to tackle pandemic, says Fed chief

[I]  Workers stoical as easing spurs fears of overcrowding

[I]  European investment plunge raises fears for future growth

[I]  EU damps hopes of business as usual for holidaymakers

[I]  German judge warns EU over ‘very difficult to resolve’ legal crisis

[I]  ECB rebuffs bank complaints on negative interest rates

[I]  Lockdown reveals a US civil fabric healthier than many thought

REUTERS

[I]  India unveils $60 billion credit line for small businesses and lenders

[I]  In nod to grim U.S. outlook, Fed's Powell calls for more fiscal support

[I]  China needs more active fiscal policy as pressure on economy increasing - People's Daily

[I]  Less than zero? Powell shows no love for negative rates

[I]  Australian employment plunges, jobless rate at five-year high on pandemic...

[I]  Treasury's Mnuchin says U.S. will slowly reopen economy

[I]  New Zealand unveils record spending to deal with pandemic shock

[I]  Travel light with a mask: Europe unveils plans to get planes back in sky

[I]  Sun, sea, silence: lack of tourist dollars crushes small economies

BLOOMBERG 

[I]  Powell Warns of Broad Virus Danger, Bats Down Negative Rates

[I]  Tepper Piles on to Bank Woes, Calling Them ‘Tough’ Investments

[I]  Vast Numbers of Unemployed Will Undermine China’s Recovery

[I]  Hong Kong’s Economic Crisis Just Keeps Getting Worse

[I]  Australia Employment Slumps by Record 594,300

[I]  Hong Kong Land Auction Fails in Rare Property Market Setback

[I]  U.K.’s Housing Revival Plan Seen Unlocking $100 Billion of Deals

[I]  Farmers’ Hopes Are Dashed in Australia on Souring of China Ties

[I]  Hong Kong’s Small Brokers Are Disappearing at a Record Pace

WALL STREET JOURNAL

[I]  WSJ Survey: Coronavirus to Cause 17% Unemployment in June

[I]  Abbott’s Coronavirus Test Falls Short of Rival Device

[I]  Powell Says Washington Will Need to Spend More to Battle Downturn

[I]  Coronavirus Lockdowns Trigger Big Drop in Consumer Prices

[I]  Newsletter: Has the Economy Bottomed Out?

[I]  Fed Survey Finds Big Deterioration in Consumer Views

BUSINESS LINE

[I]  21 States staring at ₹97,100-crore revenue hit in April: Ind-Ra

[I]  Equalisation levy on e-commerce companies may be deferred to second half of FY 2020-21

[I]  Cost of packaging material to shoot up post-Covid-19 lockdown

[I]  Transporters to get higher liquidity on account of lesser TDS

[I]  Electricity demand down by a quarter in April: Crisil

ECONOMIC TIMES

[I]  The anatomy of FM's first tranche of Rs 20L cr Covid package

[I]  Bharat is fighting a dual battle for survival

[I]  MSMEs redefined: Here is what it means now

[I]  Collateral-free automatic loans for MSMEs

[I]  Rs 20 lakh crore Atmanirbhar Bharat package: What’s in it for MSMEs

[I]  Atmanirbhar Bharat Abhiyan: FM Nirmala Sitharaman on EPF contributions' relief

[I]  Will see around 4% growth if PM Modi’s package is pumped into economy: ASSOCHAM

BUSINESS STANDARD

[I]  Poor, farm sector likely to be FM Nirmala Sitharaman's next focus

[I]  Govt likely to purchase gold from households without seeking the source

[I]  Bigger reforms coming, we'll see a V-shaped recovery: CEA Subramanian

[I]  India to grow at 1.2% in CY20, global GDP to shrink by 3.2%, says UN

[I]  Without more stimulus, India's GDP may contract 9% in FY21: Pronab Sen

[I]  India's window of opportunity for attracting companies is closing

[I]  Labour law changes in India should adhere to global standards, says ILO

MARKETS (08:30 am)

[I]  SGX NIFTY Fut: 9260;  USDINR DGCX: 75.3700;  DJIA Mini: 23184;  FTSE 100 Fut: 5839;  NIKKEI 225 Fut: 20110;  EUR-USD: 1.0814; Crude Oil (WTI): 25.47;  Gold (Spot): 1715

Best Regards, ARBIND

14 May 2020