SPLENDID IS YOUR SUPERB SMILE. WISHING A MAGNIFICENT WEEKEND AHEAD.

Macro Economic News 23 May 2020

IMF chief suggests to halt bank dividends and buybacks now while US Job losses were sudden and swift. At first, workers and employers thought they would be temporary. For many, that is starting to look like wishful thinking while facing higher costs to keep workers and customers safe and an indefinite period of suppressed demand, businesses are navigating an ever-narrower path to profitability. There is a growing divide between those celebrating the end of restrictions and those fearful of Covid-19’s re-emergence. The reopening is in some ways turning out to be more difficult than the shutdown whereas European Central Bank officials are ready to step up bond purchases next month if they consider such a move necessary to combat the economic fallout and Bank of Japan shows ‘Whatever It Takes’ attitude with $700 billion plan. UK Central bank’s stimulus programme could increase from current €750bn level rising to the highest level for 57 years as public finances deteriorate. Many believe a no-deal Brexit amid the pandemic would be disgraceful while the wisest thing to do would be to reach a comprehensive free trade agreement with the EU.

FM urges lenders to ease flow of credit to MSMEs whilst 35% rise in sowing a silver lining in agriculture for RBI whereas Moody predicts Indian economy contracting in FY21 as India runs out of options, first full-year contraction in 4 decades all set to be reality along with RBI Governor predicted, during his announcement of a sharp 40-bp rate cut, GDP growth in 2020-21 likely to be negative.

FINANCIAL TIMES

[I]  ECB fuels investor expectations that bond-buying will rise in June

[I]  Top of Form

IMF agrees $5bn loan for Ukraine

[I]  UK government borrowing and debt surge

[I]  Top of Form

Bank of England pivots and starts to contemplate negative rates

[I]  A no-deal Brexit amid the pandemic would be disgraceful

[I]  The wisest thing to do would be to reach a comprehensive free trade agreement with the EU

[I]  Top of Form

IMF chief: halt bank dividends and buybacks now

REUTERS

[I]  Exclusive: U.S. accuses China of blocking U.S. flights, demands action

[I]  China's planned security agencies for Hong Kong a 'death knell' for autonomy - Pompeo

[I]  Organizers cancel 2020 New York auto show

[I]  Exclusive: Argentine debt talks could reach a breakthrough in days - source

[I]  Dozens of Chinese companies added to U.S. blacklist in latest Beijing rebuke

[I]  Argentina defaults on bond payments as debt talks heat up

BLOOMBERG 

[I]  Charting the Global Economy: Nations Pushing Envelope on Relief

[I]  U.S. Warns New China Law Jeopardizes Hong Kong’s Special Status

[I]  Argentina to Rework Debt Offer After Missing Interest Payment

[I]  Oxford Economics Sees Exodus of Expat Workers From Across Gulf

[I]  Why Delisting Chinese Firms Has Gained Traction in Washington

[I]  Steel Output Slumped by Most in a Decade in April Amid Virus

WALL STREET JOURNAL

[I]  The Job Market’s Long Road Back

[I]  State Jobless Rates for April Show Uneven Impact of Pandemic

[I]  The Covid Surcharge: Companies Confront the Unforgiving Economics of Coronavirus

[I]  ECB Is Ready to Expand Stimulus Program, Minutes Show

[I]  America Is Reopening for Summer, and Tensions Are High

[I]  Bank of Japan Shows ‘Whatever It Takes’ Attitude With $700 Billion Coronavirus Plan

BUSINESS LINE

[I]  Need to ensure that liquidity issues don’t turn into insolvency crisis, says DK Joshi

[I]  Karnataka working on quarantine procedures for domestic air travellers

[I]  Committee to reform drug regulatory system to table report in a month

[I]  More measures to deal with Covid-19 crisis soon, says Anurag Thakur

[I]  FPIs from China, Hong Kong to come under close scrutiny

ECONOMIC TIMES

[I]  RBI fortifies its war room as virus rages on

[I]  Migrants bank on lenders for work back home

[I]  India Inc wants govt to do more for economy

[I]  FM urges lenders to ease flow of credit to MSMEs

[I]  Sowing up by 35%, RBI sees silver lining in agriculture

[I]  Indian economy to contract in FY21, says Moody's

[I]  India runs out of options, first full-year contraction in 4 decades all set to be reality

[I]  GDP growth in 2020-21 likely to be negative: RBI Governor

BUSINESS STANDARD

[I]  Retail, MSME loans to get cheaper as RBI cuts repo rate in surprise action

[I]  RBI forecasts economic contraction, announces a sharp 40-bp rate cut

[I]  Job cuts in IT sector likely if biz climate doesn't improve soon: Nasscom

[I]  Restaurants urge FM for support as job losses across 500,000 outlets loom

[I]  RBI breather for trade: Higher export credit, more time to pay import bills

Best Regards, ARBIND

23 May 2020

SMILE ONCE AGAIN, ITS FRIDAY TODAY. WISHING A SUPERB DAY AHEAD.

Macro Economic News 22 May 2020

 

Chinese government wouldn’t set an economic target for 2020, in a stark acknowledgment of the challenges facing the world’s second-largest economy as it continues to grapple with the uncertainties around the coronavirus pandemic. Downturn in economic activity starts to ease across Eurozone although business activity and labor markets in the U.S., Europe and Japan continued to fall in May, though at a slower pace than in prior months, offering early signs that the global economy may have already experienced the worst of the damage. The Bank of Japan introduced new funding for banks that it estimated would reach $280 billion to help them make loans to companies affected by the coronavirus pandemic. Sales of previously owned homes plunged in April, as the coronavirus pandemic shut down much of the country’s economic activity and sellers and buyers stayed on the sidelines. U.S. Treasury Secretary Steven Mnuchin said there is a strong likelihood the U.S. will need another stimulus package, and said there is a need to fix a ‘quirk’ that enables some to earn more on unemployment than from a job. UN says that half a billion children miss out on education due to lockdowns while US health chief warns of virus flare-up this year.

 

FINANCIAL TIMES

[I]  China risks new Hong Kong protests by imposing security law

[I]  Half a billion children miss out on education due to lockdowns, says UN

[I]  Italy’s record casts shadow over hopes of post-Covid recovery

[I]  Downturn in economic activity starts to ease across eurozone

[I]  US health chief warns of virus flare-up this year

[I]  Brazil emerges as a top global coronavirus hotspot

[I]  UN experts probe dispatch of Russian-made warplanes to Libya

[I]  India and China trade accusations after Himalayan spats

 

REUTERS

[I]  U.S. to pull out of Open Skies treaty, Trump's latest treaty withdrawal

[I]  China drops GDP goal, vows spending as virus overshadows parliament

[I]  Bank of Japan launches its version of Fed's 'Main Street' lending scheme

[I]  Japan Finance Minister Aso welcomes BOJ's new loan scheme

[I]  GM gradually restarts in Mexico as Lear Corp readies for return

[I]  Hong Kong leads Asian shares lower as Beijing readies new security law

[I]  New Zealand discussing 'helicopter money' handouts to stimulate economy

[I]  Japan's elderly workers, once key to Abenomics, suffer as pandemic closes businesses

 

BLOOMBERG 

[I]  U.S. Jobless-Claims Data Become Much Trickier as Economic Gauge

[I]  Japan’s Corporate Profit Tumbles Most Since Financial Crisis

[I]  Bond Rally Creates a Dilemma for Africa Issuers Facing Debt Wall

[I]  Key Test Looms for Indonesian Bonds Amid Rising Debt Supply

[I]  Fed Has Purchased $1.8 Billion of Corporate-Bond ETFs So Far

 

WALL STREET JOURNAL

[I]  China Scraps GDP Target for 2020

[I]  Coronavirus Revives Debate Over Drug Pricing

[I]  Workers File 2.4 Million Unemployment Claims

[I]  Mnuchin: Strong Likelihood We’ll Need Another Stimulus Package

[I]  Global Business Activity Starts to Steady, but Recovery Looks Far Off

[I]  Bank of Japan Unveils New Funding for Banks

[I]  Fed’s Williams Optimistic for a Rebound, But Uncertain on Pace

[I]  U.S. Existing-Home Sales Dropped 17.8% in April

 

BUSINESS LINE

[I]  Sagarmala is passe; Government begins work on new maritime vision

[I]  Coronavirus pandemic pushes private healthcare industry into financial stress

[I]  Centre allows use of drones to control locusts

[I]  Finance Ministry issues norms for Partial Credit Guarantee Scheme 2.0

[I]  Gujarat may see surge in groundnut sowing

[I]  Farmers shun the fibre crop due to lower price, pest menace

 

ECONOMIC TIMES

[I]  The unease of doing business in a lockdown

[I]  Grocery bills are rising. Here's the culprit

[I]  Locusts from Pakistan threaten standing crops on 2 lakh hectare

[I]  Current account may turn surplus in FY21

[I]  Fruit, veggie exports fall 70% during lockdown

[I]  No restrictions on utilisation of additional borrowing by states: FinMin official

 

BUSINESS STANDARD

[I]  Labour Ministry to object to states' Ordinance plan on labour laws

[I]  Govt mulls faster drug approval process, regulatory system overhaul

[I]  Advertisers retune the gender pitch, show women as decision makers

[I]  PE firms express concerns over new FDI rules, say investments will get hit

[I]  IT firms seek higher volume of work from clients amid price discount demand

[I]  Income Tax department notifies safe harbour rates for fiscal year 2019-20

 

MARKETS (09:45 am)

[I]  SGX NIFTY Fut: 8983;  USDINR DGCX: 75.7800;  DJIA Mini: 24213;  FTSE 100 Fut: 5958;  NIKKEI 225 Fut: 20395;  EUR-USD: 1.0924; Crude Oil (WTI): 31.89;  Gold (Spot): 1726

 

Best Regards, ARBIND
22 May 2020

SMILE WITH TRUST FOR BLESSINGS. WISHING A DIVINE DAY AHEAD.

Macro Economic News 21 May 2020

 

Australia central bank governor says future remains 'unusually uncertain' and FED worries to financial stability and discussed plans to provide more economic support. Britain borrows at negative interest rate for first time while Singapore gets closer and closer to a sub-zero interest rate and RBNZ increases pressure on banks to lower mortgage lending rates. Federal Reserve officials began contemplating last month how to communicate their plans to keep interest rates near zero and to purchase Treasury securities to spur a stronger economic recovery. Nearly half of adults live in households that have lost income since the coronavirus pandemic led to a nationwide economic shutdown and more than a third expect to lose income over the next four weeks, the Census Bureau said. Major layoffs at big companies including Uber and Airbnb, as well a host of smaller startups, have shaken any sense that the tech industry is insulated from the broader employment destruction. While countries lift lockdowns despite surge in Covid-19 cases, economists feel RBI may need to aggressively cut rates alongside fiscal stimulus.

 

India allows airlines to begin some domestic flights from May 25. Icra warns of deep recession, GDP to contract 5 per cent in FY21 whereas an online study by CMEE finds Indians are more worried about economic crisis than virus. Bank credit grows 6.5% to Rs 102.5 trillion whereas net enrolments with EPFO dip to 5.72 lakh in March from 10.21 lakh in Feb.

 

FINANCIAL TIMES

[I]  UK set for new clash with Brussels over Northern Ireland Brexit plan

[I]  Frustrated sports punters turn to US stock market

[I]  Countries lift lockdowns despite surge in Covid-19 cases

[I]  Argentines take no chances as default fears grow

[I]  Chinese business pleads for more help from Beijing

[I]  Trump lashes out at states’ plans to expand mail-in voting

[I]  Spain’s moneyed classes step up anti-government protests

[I]  The eurozone’s bailout fund remains unfairly toxic

 

REUTERS

[I]  RBI may need to aggressively cut rates alongside fiscal stimulus - economists

[I]  Japan exports fall most since 2009 as pandemic wipes out global demand

[I]  Australia central bank governor says future remains 'unusually uncertain'

[I]  India to allow some domestic flights from May 25 - civil aviation minister

[I]  In cash-rich Japan, a fifth of firms now see risk of insufficient capital

 

BLOOMBERG 

[I]  Fed Worries Turned to Financial Stability in April Meeting

[I]  Singapore Gets Closer and Closer to a Sub-Zero Interest Rate

[I]  Wave of Dollar Liquidity Shrinks Japan, Korea Bond Returns

[I]  RBNZ Increases Pressure on Banks to Lower Mortgage Lending Rates

[I]  What to Watch as China Unveils Stimulus in Policy Meeting

[I]  Australia’s Recession-Busting Pillars Set to Topple Post-Virus

[I]  First 20-Year Treasury Sale in a Generation Is Well-Received

 

WALL STREET JOURNAL

[I]  Fed Discussed Plans to Provide More Economic Support

[I]  Nearly Half of Adults Live in U.S. Households That Lost Income Amid Lockdowns

[I]  What Unemployment Claims Tell Us About Virus Job Losses

[I]  Fed’s Bullard Doesn’t See Virus Second Wave as Major Threat

[I]  Virus Layoffs Remake Silicon Valley Job Market

[I]  U.S. Orders Breakup of Exoskeleton Firm’s Venture With Chinese Investors

[I]  Newsletter: Baby Busts and Slow Rebounds

 

BUSINESS LINE

[I]  Indians more worried about economic crisis than virus, says online study by CMEE

[I]  Icra warns of deep recession, GDP to contract 5 per cent in FY21

[I]  Recovery in steel demand to be delayed on lockdown extension

[I]  EPF contribution cut: Labour Ministry notification adds twist to the tale

[I]  Emergency credit for MSMEs: Interest rate capped at 9.25-14%

[I]  CBDT exempts some B2B transactions from deploying certain e-payment facilities

 

ECONOMIC TIMES

[I]  US needs H-1B visa holders more than ever

[I]  Britain borrows at negative interest rate for first time

[I]  Cabinet clears stimulus package for fisheries

[I]  Stimulus package lacks major near-term support for economy: Report

[I]  India Inc's foreign direct investment dips 62 pc to USD 976 mn in April

[I]  Govt to soon start pan-India helpline number for migrant workers

[I]  Debt woes derail India’s plan to deliver stronger fiscal support

 

BUSINESS STANDARD

[I]  Govt to use RBI money to support struggling NBFCs for just three months

[I]  Centre reverses stance, allows domestic flights to resume on May 25

[I]  MSMEs to get loans at 9.25% under Centre's Rs 3-trillion package

[I]  Resume operations, says FM Sitharaman; India Inc cites hurdles in way

[I]  Bank credit grows 6.5% to Rs 102.5 trillion, deposits rise 10.64%

 

MARKETS (09:15 am)

[I]  SGX NIFTY Fut: 9062;  USDINR DGCX: 75.7725;  DJIA Mini: 24357;  FTSE 100 Fut: 6031;  NIKKEI 225 Fut: 20580;  EUR-USD: 1.0961; Crude Oil (WTI): 33.70;  Gold (Spot): 1742

 

Best Regards, ARBIND

21 May 2020