GLOBAL NEWS:
The White House coronavirus task force will wind down as the country moves into a second phase that focuses on the aftermath of the outbreak, President Donald Trump said on Tuesday. Trump confirmed the plans after Vice President Mike Pence, who leads the group, told reporters the White House may start moving coordination of the U.S. response on to federal agencies in late May. “Mike Pence and the task force have done a great job,” Trump said during a visit to a mask factory in Arizona. “But we’re now looking at a little bit of a different form and that form is safety and opening and we’ll have a different group probably set up for that.” Trump said Anthony Fauci and Deborah Birx, doctors who assumed a high profile during weeks of nationally televised news briefings, would remain advisers after the group is dismantled. Fauci leads the National Institute of Allergy and Infectious Diseases and Birx was response coordinator for the force. More than 70,000 people in the United States have died from COVID-19, the respiratory illness caused by the virus. The U.S. death toll is the highest in the world. Trump acknowledged there might be a resurgence of the virus as states loosen the restrictions on businesses and social life aimed at curbing its spread. Trump placed Pence in charge of the task force, which has been meeting almost every day since it was formed in March. Democratic politicians and some Republicans have criticized Trump for playing down the threat and encouraging states to start to reopen their economies.
China’s exports and imports are expected to record double-digit declines in April after a tentative recovery in March as the coronavirus pandemic batters global demand and disrupts manufacturing supply chains, a Reuters poll showed on Wednesday. The pessimistic projections reinforce concerns that the collapse in global demand will restrain the recovery in the world’s second-biggest economy as it gets back on its feet after weeks of paralysis due to the virus outbreak.Shipments out of China are likely to have fallen 15.7% in April from a year earlier, according to a median estimate from the survey of 28 economists, far worse than a 6.6% contraction in March. Exports contracted by 17.2% in the first two months of the year. Imports, meanwhile, are expected to have shrunk 11.2% from a year earlier, the sharpest drop since July 2016 and versus a 0.9% fall the previous month as domestic demand remained tepid. The trade surplus for the month was forecast at $6.35 billion, down from $19.9 billion in March. The bank is forecasting exports will drop 15% on year in the second quarter, compared with a 13.3% fall in the first quarter. China’s factories suffered a collapse in export orders in April, latest surveys showed, amid reports that foreign customers cancelled a bulk of orders as the coronavirus health crisis shut down large parts of the world economy. The second quarter is usually a busy season for container business at Chinese ports, China’s port association said last month, but as the COVID-19 respiratory disease spreads globally, growth in container traffic has been crimped by a slowdown in global logistics and capacity cuts at shipping companies. Last month, China announced that its parliamentary meeting or National People’s Congress would open on May 22, when Beijing reveals major economic and social targets for the year. China is also facing fresh pressure on the trade front as U.S. President Donald Trump threatens new tariffs on Beijing in retaliation for the pandemic.
The yen scaled a three-year high against the euro and a seven-week peak on the dollar on Wednesday, after a court decision challenging German participation in Europe’s stimulus programme and worries about a bumpy global recovery spooked investors. Germany’s highest court on Tuesday gave the European Central Bank three months to justify purchases under its bond-buying programme, or lose the Bundesbank as a participant in a scheme aimed at cushioning the economic blow from the coronavirus. The news sent the euro to a one-week low of $1.0826, where it has stayed, and a three-year trough of 115.09 yen that it hit in the Asian session, as traders worried about both the scheme and euro zone turmoil. The yen also edged up against the dollar, pushing through resistance to a seven-week high of 106.22, though volumes were light with Japanese markets shut for the final day of a national holiday. “The level of yields is biggest driver of yen strength and they’d have to go up a fair bit globally to make the yen weaken.” Long-dated U.S. yields rose overnight, as the U.S. plans a borrowing spree, but remain near historic lows. The yen is up about 2% on the dollar and nearly 6% on the euro for the year so far. It hit a three-week high against the Korean won KRWJPY= on Wednesday and is not far from a month high against the Australian dollar. The Aussie last sat at $0.6432 and the New Zealand dollar at $0.6052. The pound was steady at $1.2431. The pandemic’s heavier toll on debt-laden Italy and Spain, compared with Germany, has revived tensions between wealthy northern and poorer southern European member states - leaving politicians divided and the ECB to do the heavy lifting. Elsewhere, U.S. President Donald Trump again pressed China about the origins of the outbreak that has killed more than a quarter of a million people since it started in the Chinese city of Wuhan late last year.
India late on Tuesday increased its taxes and duties on petrol and diesel instead of passing on the benefit of lower crude oil prices to consumers, as the government moves to raise revenues in an economy that ground to a halt in the coronavirus crisis. Taxes and duties on petrol and diesel were increased by 10 rupees/litre and 13 rupees/litre, respectively, but the federal government said in a statement that local pump prices would not be affected. India pegs retail prices of petrol and diesel to moves in the international markets, where prices of fuel have declined substantially amid the slump in global crude oil demand. Some state governments earlier on Tuesday sharply raised taxes on alcohol in a bid to bolster their own coffers that have also taken a hit amid the nationwide lockdown that began on March 25. India reported more than 3,900 new infections of the novel coronavirus on Tuesday marking its highest single day increase in cases, and taking its tally to 46,711. The death toll in India stood at 1,583 people, the health ministry said.
Oil prices soared on Tuesday, as some European and Asian countries along with several U.S. states began to ease coronavirus lockdown measures. The rally extended Brent crude’s gains to six straight days, while U.S. benchmark West Texas Intermediate has now rallied for five consecutive sessions. Fuel demand worldwide was down roughly 30% in April, but demand is rising modestly due to efforts to lift travel restrictions. International benchmark Brent crude LCOc1 rose $3.77, or 13.9%, to settle at $30.97 a barrel. U.S. West Texas Intermediate crude CLc1 futures gained $4.17, or 20.5%, to close at $24.56 a barrel. Prices extended their gains in after-hours trading despite industry data showing a larger-than-forecast weekly build in U.S. crude inventories, as the report also showed a surprise large fall in gasoline stocks. U.S. crude inventories rose 8.4 million barrels last week, data from industry group the American Petroleum Institute showed late Tuesday. Analysts forecast a build of 7.8 million barrels ahead of the government’s report on Wednesday morning. The API also reported gasoline stocks fell 2.2 million barrels, compared with analysts’ expectations in a Reuters poll for a 43,000-barrel increase, signaling that demand was recovering. The top exporter is cutting production from May under a supply pact with the Organization of the Petroleum Exporting Countries and allies like Russia. However, Vitol Chief Executive Russell Hardy told Reuters long-term peak demand may be permanently eroded. Global oil demand sank by 26 million to 27 million barrels per day in April, and Hardy predicts a year-on-year drop of more than 8 million bpd. In addition, air traffic is not expected to rebound soon, which will slow the recovery for fuel demand.