GLOBAL NEWS:
The U.S. Treasury Department on Monday said it plans to borrow nearly $3 trillion in the second quarter of 2020 - more than five times larger than the previous record - as the federal government spends at a frantic pace to mitigate the impact of the coronavirus on the U.S. economy. In a statement, Treasury said it would borrow $2.999 trillion during the April-June quarter - higher also than the previous record borrowing for a full fiscal year of $1.8 trillion in 2009. Monday’s estimate is $3.055 trillion more than the original target for the quarter issued in early February, when it was still unclear whether the coronavirus would spread widely in the United States. At that time, it appeared as though the federal government would pay down $56 billion of debt in the current quarter, leading Treasury to forecast a negative estimate for new net marketable debt in the period. But with the virus spreading rapidly soon after that projection - and tanking the economy along with it - Congress has appropriated nearly $3 trillion to help individuals and companies weather the business shutdowns implemented to slow the pace of the pandemic. Monday’s estimate assumes a cash balance of $800 billion at the end of June. Treasury said it expects to borrow $677 billion during the July-September quarter, assuming an end-September cash balance of $800 billion. It borrowed $477 billion through credit markets in the January-March quarter, ending the period with $515 billion in cash.
Almost a month after Tokyo declared a state of emergency, dozens of call centre employees for telecom KDDI Corp still commute into their crowded office, where the fear of coronavirus infection has taken a back seat to data security. Call centres have exposed one of the fault lines in Japan’s fight against the pandemic, as it takes a less forceful approach than many countries. In the past few weeks, 17 infections were confirmed at a post office call centre in the northern island of Hokkaido and 11 at a Kyoto mail-order business. Japan Inc has been reluctant to embrace telecommuting, with firms citing concerns about data security. Companies also fear a decline in worker productivity and customer service. Until recently, the KDDI Evolva office in Tokyo was packed at peak hours with nearly 80 operators sitting less than a metre apart without partitions, said the worker, who spoke on condition of anonymity. Staff numbers have now been thinned, but not enough to dispel infection concerns, the worker said.KDDI Evolva said it was taking measures to protect workers, including reducing the number of operators and installing partitions. A Fuji Xerox spokesman said it made no distinction between contractors and regular employees in allowing telecommuting. He said it was expanding telecommuting, but some workers need to be in the office and in front of physical photocopiers and printers to troubleshoot for customers. Japan declared a state of emergency in Tokyo and six other areas on April 7 that has since been extended nationwide until the end of May. It has targeted a 70%-80% reduction in person-to-person contact, but as of April 26, Google mobility data showed traffic to workplaces was just 27% lower than before the pandemic.
Indian shares rebounded on Tuesday, led by a jump in beaten-down banking stocks, as Asian markets tracked Wall Street higher after governments eased coronavirus lockdowns. The NSE Nifty 50 index was up 1.64% at 9,445.60 by 0350 GMT, while the S&P BSE Sensex was 1.68% higher at 32,250.50. The indexes had fallen nearly 6% lower on Monday. Stocks across Asia followed a late Wall Street surge on Monday, as the easing of lockdown restrictions in Italy and parts of the United States spurred hopes of a pick up in economic activity. India had tallied more than 40,000 cases of the new coronavirus and deaths from the COVID-19 disease it causes had crossed 1,500 by Tuesday.
Gold prices edged lower on Tuesday as moves by some countries to relax coronavirus restrictions reduced the metal’s safe-haven appeal, even though markets remained wary of souring relations between China and the United States. Spot gold eased 0.2% to $1,698.39 per ounce by 0330 GMT. U.S. gold futures fell 0.5% to $1,704.80. We are holding quite steady around the $1,700 level. On one side, you’ve got easing in lockdowns and that is probably improving investor sentiment and a move away from safe havens towards risk assets. On the other side, the tensions between China and the U.S. in relation to COVID-19 are reigniting once again. These two opposing forces are keeping the market on hold at the moment. Italy and the United States were among a slew of countries tentatively easing the lockdowns on Monday to revive economies, which propped up equities and oil markets. Gold, which is considered an alternative asset during times of economic and political turmoil, rose 18% last year due to the tariff war and interest rate cuts by the U.S. Federal Reserve. It has gained 12% so far this year as the Fed has kept its benchmark rate at near zero and pumped trillions in emergency funding into U.S. financial markets, while other central banks and countries have taken similar measures to prop up their virus-hit economies. Among other metals, palladium rose 0.6% to $1,859.47 per ounce. Platinum eased 0.2% to $764.56 per ounce, while silver slipped 0.4% to $14.79.
Oil prices climbed in early trade on Tuesday, adding to gains in the previous session, on expectations that fuel demand will begin to pick up as some U.S. states and nations in Europe and Asia start to ease coronavirus lockdown measures. West Texas Intermediate crude CLc1 futures rose as much as 8.2% to a three-week high of $22.06 and were up 7.6%, or $1.55, at $21.94 at 0108 GMT. The U.S. benchmark is on a five-day win streak that started on April 29. Brent crude LCOc1 futures hit a high of $28.37 a barrel in early trade and were up 4.1%, or $1.12 cents, at $28.32. Brent is up for a sixth straight day. Both benchmark contracts rose about 3% on Monday. Global oil demand probably collapsed by as much as 30% in April, analysts have said, and the recovery is likely to be slow, especially with airlines expected to remain largely grounded for months to come. With Saudi Arabia, Russia other major producers and companies slashing output, the market shrugged off a decision by the Texas energy regulator to cancel a vote on mandating a 20% output cut in the United States’ biggest oil-producing state.The Texas Railroad Commission had been due to hold the vote on Tuesday, but Commissioner Ryan Sitton was unable to win support from his fellow commissioners for the plan. The proposal was strongly opposed by oil trade groups and major shale producers.