GLOBAL NEWS:
U.S. President Donald Trump’s firing of the State Department’s top internal watchdog “could be unlawful” if it was intended to retaliate against one of his investigations, House Speaker Nancy Pelosi said on Sunday. Trump late Friday ousted Inspector General Steve Linick, the fourth inspector general he has fired since early April, following his February acquittal by the Republican-controlled Senate in his impeachment trial. “The president has the right to fire any federal employee, but the fact is if it looks like it’s in retaliation for something the IG, the inspector general, was investigating, that could be unlawful,” Pelosi said on CNN’s “State of the Union.” The top Democrats on the House and Senate Foreign Relations Committee on Saturday began a probe into the firing, saying it was their understanding that Secretary of State Mike Pompeo personally recommended Linick’s sacking because the inspector general “had opened an investigation into wrongdoing by Secretary Pompeo himself.” White House adviser Peter Navarro, meanwhile, downplayed the firing, saying that what Trump terms the “deep state” has caused problems and those who are not loyal must go. “There’s a bureaucracy out there. And there’s a lot of people in that bureaucracy who think they got elected president and not Donald J. Trump.” Trump and his allies have long pushed conspiracy theories that target what they denounce as the “deep state,” career civil servants meant to be nonpolitical who, they say, are working to undermine Trump.
China’s new home prices rose at a slightly faster pace in April, adding to signs of gradual recovery in the property market as the government eases virus-busting restrictions on movement and re-opens the world’s second-largest economy. Average new home prices in 70 major cities rose 0.5% in April from the prior month, a pace not seen since October, and following a 0.1% increase in March, Reuters calculated based on data from the National Bureau of Statistics. On an annual basis, home prices picked up 5.1% in April, compared with 5.3% in March. As China has largely stemmed the spread of the virus, sales are recovering quickly as authorities let developers reopen showrooms and property agents conduct viewings. Market sentiment has also been underpinned by easier access to mortgages and lower interest rates as the government increases liquidity to rekindle economic activity. Average mortgage interest rates in 41 cities for first- and second-home purchases declined in April from March, as banks followed the central bank’s cut in its key lending rate. While the government has so far refrained from substantial easing in property policies, local authorities have relaxed purchase restrictions or introduced measures to help soothe developers’ financial strain. Zhang Dawei, a Beijing-based analyst with property agency Centaline, estimates the property market in April recovered as much as 80% to 90% of its pre-virus level, with some areas even outperforming. Robust gains were recorded across all city tiers. The top performers were Nanjing, the capital city of eastern Jiangsu province, and Tangshan, in the northern Hebei province, with both notching up monthly price increases of 1.8%.
Japan’s economy slipped into recession for the first time in 4-1/2 years, putting the nation on course for its deepest postwar slump as the coronavirus crisis ravages businesses and consumers. Monday’s first-quarter GDP data underlined the broadening impact of the outbreak, with exports plunging the most since the devastating March 2011 earthquake as global lockdowns and supply chain disruptions hit shipments of Japanese goods. Analysts warn of an even bleaker picture for the current quarter as consumption crumbled after the government in April requested citizens to stay home and businesses to close, intensifying the challenge for policymakers battling a once-in-a-century pandemic. The world’s third-largest economy contracted an annualised 3.4% in the first quarter, preliminary official gross domestic product data showed, less than a median market forecast for a 4.6% drop. The slump came on top of an even steeper 7.3% decline in the October-December period, with the consecutive quarters of contraction meeting the technical definition of a recession. The last time Japan suffered recession was in the second half of 2015. The coronavirus, which first emerged in China late last year, has ravaged the global economy as many nations went into strict lockdowns to curb the outbreak that has so far killed over 310,000 people worldwide. The pandemic has been massively disruptive on supply chains and businesses, particularly in trade-reliant nations such as Japan. Indeed, the fallout of the virus on corporate Japan was telling with exports diving 6.0% in the first quarter, the biggest decline since April-June 2011.
Asian shares were led higher by S&P 500 futures on Monday and oil prices hit a five-week peak as countries’ efforts to re-open their economies stirred hopes the world was nearer to emerging from recession. Summer weather is enticing much of the world to emerge from coronavirus lockdowns as centres of the outbreak from New York to Italy and Spain gradually lift restrictions that have kept millions cooped up for months. Federal Reserve Chairman Jerome Powell took a cautious line in an interview over the weekend, saying a U.S. economic recovery may stretch deep into next year and a full comeback might depend on a coronavirus vaccine. Data out on Friday showed retail sales and industrial production both plunged in April, putting the U.S. economy on track for its deepest contraction since the Great Depression. Closer to home, data in Japan confirmed the world’s third largest economy slipped into recession in the first quarter, putting it on course for its worst postwar slump as the coronavirus takes a heavy toll. MSCI's broadest index of Asia-Pacific shares outside Japan still edged up 0.4%. Japan's Nikkei rose 0.6% and Chinese blue chips 0.3%.More carefree were E-Mini futures for the S&P 500 ESc1 which added 1.1%, even though results from a raft of U.S. retailers this week are likely to make grim reading. The dollar has also been largely range-bound, with its safe-haven appeal keeping it well supported overall. Against a basket of currencies, it was last at 100.380 having drifted 0.7% higher last week. The euro was steady at $1.0826, while the dollar was a fraction firmer on the Japanese yen at 107.10. In commodity markets, the flood of liquidity from central banks combined with record-low interest rates to help lift gold to a seven-year peak. The metal was last up 1.2% to $1,762 an ounce, with silver and palladium also on a roll. Oil prices rose as demand picked up as countries around the world eased travel restrictions. Brent crude futures firmed 96 cents to $33.46 a barrel, while U.S. crude rose 98 cents to $30.41.
India on Sunday extended a nationwide lockdown to May 31, as cases exceeded 90,000 and further clashes erupted between police and stranded migrants. Schools, malls and other public places will remain mostly closed, though rules will be relaxed in areas with low numbers of cases, according to an order from the interior ministry. Large gatherings are still prohibited, but outside of containment zones with high numbers of active cases “all other activities will be permitted”, it said, potentially allowing commerce and industry to reopen across much of the country. Several Indian states, some of which had lobbied the federal government for a relaxation in the lockdown, immediately said they would allow many businesses to restart.Gujarat Chief Minister Vijay Rupani said all industries and offices would be allowed to operate, barring those in containment zones. India has now reported more cases than China, where the virus first emerged late last year, although deaths, at 2,872, remain much lower than China’s 4,600. The death toll in the United States and some European countries is much higher. With no work - and little public transport - many urban migrants attempting to return to their home villages have set out on gruelling journeys on foot or hitched rides in the back of trucks. He also notified Congress that he was firing the inspector general of the U.S. intelligence community, Michael Atkinson, who was involved in triggering the impeachment investigation. In an interview on CNN’s “State of the Union,” Senate Homeland Security and Governmental Affairs Committee Chairman Ron Johnson said he felt “not all inspector generals are created equal” and noted they “serve at the pleasure of the president.”
Oil prices climbed by more than $1 a barrel on Monday, supported by output cuts and signs of gradual demand recovery amid easing coronavirus curbs, with U.S. oil showing no signs of last month’s contract expiry price rout. Brent crude was up $1.06, or 3.3%, at $33.56 a barrel by 0452 GMT, after touching its highest since April 13. U.S. West Texas Intermediate crude was up $1.29, or 4.4%, at $30.72 a barrel, after rising to its highest since March 16. “Oil prices may show further upside momentum as the easing in mobility restrictions grows,” said Stephen Innes, chief global market strategist at AxiCorp in a note, referring to curbs that were designed to counter the coronavirus. Production is also falling as U.S. energy firms cut the number of oil and natural gas rigs operating to an all-time low for a second consecutive week. That partly helped ease concerns about the WTI contract’s delivery point in Cushing, Oklahoma, running out of space. The Chicago Mercantile Exchange, which hosts trading in WTI futures, brokerages and the United States Oil Fund LP, the largest oil-focused exchange-traded product in the country, have all taken steps that reduce open positions ahead of the WTI contract’s expiry. Also supporting oil prices are production cuts by the Organization of the Petroleum Exporting Countries and its allies, including Russia, a grouping known as OPEC+.