GLOBAL NEWS:
U.S. President Donald Trump said on Friday that “a lot of strange things are happening” regarding the origins of the novel coronavirus. The source of the virus is a mystery. The broad scientific consensus is that the novel coronavirus originated in bats. Fox News reported on Wednesday that the virus originated in a Wuhan laboratory as part of China’s effort to demonstrate the capability of its efforts in identifying and combating viruses. Trump has said his government is seeking to determine whether the virus emanated from a laboratory in China. “A lot of strange things are happening but there is a lot of investigation going on. And we’re going to find out,” Trump told reporters at the White House. Trump also cast doubt on China’s death toll, which was revised up on Friday. China said 1,300 people who died of the coronavirus in the Chinese city of Wuhan - half the total - were not counted, but dismissed allegations of a cover-up. The U.S. president said on Friday that many more people must have died in China than in the United States, which is currently the epicenter of the global pandemic and has reported the largest number of deaths in the world linked to the virus. “We don’t have the most in the world deaths. The most in the world has to be China. It’s a massive country. It’s gone through a tremendous problem with this, a tremendous problem - they must have the most,” Trump told reporters. China reported that 4,632 people have died of the novel coronavirus within its borders. U.S. coronavirus deaths topped 35,400 on Friday, according to a Reuters tally. Washington and Beijing have publicly sparred over the virus repeatedly. Trump initially praised China’s response to the outbreak, but he and his top aides have also referred to it as the “Chinese virus.”
Chile’s economy is expected to contract by 2% in 2020, the government said on Friday, while stimulus measures to combat the coronavirus pandemic will deepen the nation’s fiscal deficit to 8%, the largest gap since at least 1990. The dire predictions from the country´s budget office came the same day center-right President Sebastian Pinera promised a gradual reopening of Chile’s economy, which has been largely shuttered for more than six weeks amid the crisis. Pinera, in a televised speech, said while his priority was the health of his fellow citizens, the economy was a close second. He promised a “gradual and cautious reopening” in the coming weeks. Chile has already announced a “historic” stimulus package of $17 billion, worth more than 5% of gross domestic product. The measures, including beefed-up unemployment checks and government-backed credit lines for small business, are expected to increase the country´s total debt to 32.7% of GDP, up from 29.6% previously, the budget office said. Even with the stimulus, domestic demand will fall by 3.3% in 2020, down from a previous estimate of 1.1% growth. Annual inflation was seen at 3.3%, the agency said in its quarterly public finances report. The Health Ministry said earlier this week it would begin handing out “health passports” next week to people deemed to have recovered from the illness. Those people, once screened to determine if they have developed antibodies to make them immune to the virus, could immediately rejoin the workforce. The economy of the world´s top copper producer, heavily reliant on exports, has been hammered by fast-falling prices and flailing demand for the red metal as the global trade withers amid the pandemic. The budget agency said it expects the price of copper to average $2.36 per pound in 2020, down from a previous forecast of $2.80.
In a blow to Mexican President Andres Manuel Lopez Obrador, ratings agency Moody’s Investors Service on Friday became the second main ratings agency to downgrade national oil company Petroleos Mexicanos to speculative grade, or junk, status. The new rating of Ba2 is expected to substantially increase the financing costs for Pemex and Mexico alike, as well as trigger a fire sale among investors whose mandates stipulate they must hold bonds of investment grade quality. Fitch Ratings labeled the bonds junk last year and has downgraded it twice more in April. Ratings agencies have for the past year criticized Lopez Obrador’s nationalist energy agenda, which includes building an expensive refinery and cutting private companies from participation in the energy sector. S&P Global Ratings, which uses a different scale and pegs Pemex ratings to the sovereign, in March cut the ratings of both Mexico and Pemex to BBB, keeping both in investment grade.
Automakers in India want a temporary tax cut on cars, trucks and motorbikes as well as incentives to scrap old vehicles, to try to boost sales and generate revenue after the coronavirus outbreak has brought the economy to a standstill. Passenger vehicle sales in India fell 18% in the year to end-March 2020, their steepest recorded fall in years, after weak economic growth in the country over the last year. That has been compounded by a nationwide lockdown to slow the spread of the novel coronavirus. The Society of Indian Automobile Manufacturers, an industry body whose members include domestic companies such as Maruti Suzuki and Tata Motors and local units of global car makers such as Volkswagen AG and Toyota Motor Corp, said on Friday it has sought government aid. Companies want a temporary, 10% cut in tax on the sale of all automobiles and auto parts and incentives, in the form of tax rebates, for car owners to scrap their old vehicles, SIAM said in a media statement. The automotive industry is the backbone of India’s manufacturing sector in terms of the employment it generates and its economic contribution. In common with other industries, auto manufacturing has ground to a halt and car showrooms have been shut since late March when Prime Minister Narendra Modi announced a 21-day lockdown to contain the virus’ spread. The lockdown has been extended until May 3 at least. The coronavirus is expected to delay the recovery of passenger vehicle sales, rating agency ICRA said in a note, adding that it expects sales to dealerships to decline by 10%-12% in the current fiscal year ending March 2021, after an 18% decline last year.
Gold fell as much as 2% on Friday after President Donald Trump’s new guidelines to re-open the U.S. economy and encouraging early data related to a potential COVID-19 treatment drove investors towards riskier assets. Spot gold was down 1.7% at $1,689.22 an ounce by 11:53 a.m. EDT, more than $60 lower than the 7-1/2 peak hit earlier this week on concerns over the worst recession in decades. “Gold and stocks are negatively correlated today with the overnight equity rally pressuring gold. The guidelines from Trump for re-opening the economy have boosted equity markets,” said Tai Wong, head of base and precious metals derivatives trading at BMO. “If stocks can extend overnight gains it could trigger more profit-taking in gold,” he added. World stock markets sprinted towards a second straight week of gains after Trump laid out plans to gradually reopen the coronavirus-hit U.S. economy. Late on Thursday, Trump outlined a plan to ease the shutdown in a staggered, three-stage process, but the plan was a set of recommendations rather than orders and left the decision largely up to state governors. “Gold will remain supported by the boatload of monetary and fiscal stimulus that will be in place for the foreseeable future. In the event of a deeper pullback, the $1,650 level remains key support.” U.S. gold futures slipped 1.6% to $1,704.70 an ounce, narrowing their lead over London spot prices, signalling hopes for an improvement in strained supply chain logistics that have hampered bullion shipments to the United States to meet contract requirements. Among other precious metals, palladium gained 0.9% to $2,173.44 an ounce, silver dropped 3.3% to $15.11 and platinum fell 1.8% to $768.98.
Oil prices were mixed on Friday, with weak Chinese economic figures and rapidly filling U.S. crude storage offsetting bullishness built on U.S. President Donald Trump’s outlines for the U.S. economy to emerge from the coronavirus shutdown. U.S. crude futures hit a more than 18-year-low, extending their losses in comparison to global benchmark Brent, in part due to the coming expiration of the current May contract. However, later-dated futures contracts were also down as the country’s storage rapidly fills, and producers and traders expect output cuts in coming months. Oil prices have remained weak even after the Organization of the Petroleum Exporting Countries and other producers last weekend announced a deal to cut output by nearly 10 million barrels per day in response to weak demand. Brent futures LCOc1 rose 26 cents, or 0.9%, to settle at $28.08 a barrel while West Texas Intermediate crude contract for June CLc2, which became the day’s more active contract, ended the session down 50 cents, or 2%, at $25.03. The less active prompt WTI for May delivery CLc1 tumbled by $1.60, or 8.1%, to $18.27, ahead of its April 21 expiration as investors rapidly switched out of that contract into June futures. The contract slumped to a low of $17.31 a barrel during the session, the lowest since November 2001. China’s economy shrank 6.8% year-on-year in the three months to March 31, the first such decline since quarterly records began in 1992. The nation’s daily refining output fell to a 15-month low, though there are some signs of recovery as the country begins to ease coronavirus containment measures.