GLOBAL NEWS
U.S. President Donald Trump on Tuesday gave North Carolina’s Democratic governor a week to agree to host the Republican National Convention or face the prospect that Trump will take his event elsewhere. Trump set the deadline for Governor Roy Cooper after Republicans in Florida, Georgia and Texas offered to host their party’s four-day nominating convention, which is scheduled to open in Charlotte, North Carolina, on Aug. 24. “We’re not going to sacrifice the health and safety of North Carolinians,” Cooper said, citing the coronavirus pandemic. He said state officials would work with Republican organizers to ensure everyone’s safety. At the White House, Trump told reporters he wanted assurances that convention attendance would not be limited by social distancing restrictions. Georgia, Texas and Florida, all led by Republican governors, have loosened stay-at-home orders at a faster clip than North Carolina. Trump has been critical of Democratic governors over the pace of their economic reopening following nationwide lockdowns to curb the spread of the coronavirus. Like Trump, Cooper is up for re-election on Nov. 3. The pandemic has forced Trump and presumptive Democratic nominee Joe Biden to halt campaign rallies. Democrats have delayed their convention in Milwaukee and left the door open to a revised format.
Japan will compile a fresh stimulus package worth $1.1 trillion that will include a sizable amount of direct spending to cushion the economic blow from the coronavirus pandemic, a draft of the budget obtained by Reuters showed on Wednesday. The stimulus, which will be funded partly by a second extra budget, will be on top of a $1.1 trillion package already rolled out last month, putting the total amount Japan spends to combat the virus fallout at 234 trillion yen - roughly 40% of Japan’s gross domestic product. The government’s 117 trillion yen ($1.1 trillion) in fresh stimulus, to be compiled on Wednesday, will include 33 trillion yen in direct spending, the draft showed. To fund the costs, Japan will issue an additional 31.9 trillion yen in government bonds under the second supplementary budget for the current fiscal year ending in March 2021, according to the draft. Japan compiled a record 117 trillion yen stimulus package in April that centred on cash payouts to households and steps to cope with the immediate damage from the pandemic. Given the widening fallout from the virus, Abe had ordered his cabinet to compile on Wednesday another stimulus plan funded by a second extra budget for the current fiscal year. Japan’s economy slipped into recession for the first time in 4-1/2 years in the last quarter, putting the nation on course for its deepest postwar slump as the virus hurts businesses.
Asian shares slipped on Wednesday as investor concerns about rising tensions between the United States and China tempered optimism about a re-opening of the world economy. U.S. President Donald Trump said late on Tuesday he is preparing to take action against China this week over its effort to impose national security laws on Hong Kong, but gave no further details. Hong Kong shares led declines among major regional indexes, with Hang Seng falling 0.46%, though it kept a bit of distance from a two-month low touched on Monday. MSCI's ex-Japan Asia-Pacific index lost 0.12%, with mainland Chinese shares down a similar amount. Japan's Nikkei was almost flat. E-Mini futures for the S&P 500 ESc1 rose 0.4%, reclaiming the 3,000 chart level. The index had cleared 3,000 points in Wall Street overnight before pulling back, as some traders returned to the New York Stock Exchange floor for the first time in two months. Still, the index of world’s 49 stock markets stood near 2 1/2-month highs, having gained 2.6% so far this month on hopes of economic recovery in the developed world as countries ease social restrictions. Gold prices rebounded from losses as some investors played it safe, with spot gold unchanged at $1,710.9 per ounce.
Indian shares edged lower on Wednesday due to losses in conglomerate ITC, and as surging domestic coronavirus infections dampened economic growth outlook, while rising U.S.-China tensions also weighed on sentiment. The NSE Nifty 50 index fell 0.2% to 9,014 by 0413 GMT, while the S&P BSE Sensex dropped 0.2% to 30,546.97. ITC Ltd fell 2.4% and was the top drag on the bluechip Nifty 50 index. Meanwhile, the number of coronavirus cases in India surged past 151,700 as of Wednesday, with growth rate of new infections showing no sign of slowing despite a strict weeks-long lockdown. Shares of Titan Company Ltd fell 2.3% after the company said on Tuesday its operating cash flow was negative in the last two months due to virtually zero sales during the first 6 weeks of lockdown. India has been under a nationwide lockdown since March 25 to contain the spread of the coronavirus, but Asia’s third-largest economy has taken a huge hit as a result. Fitch on Tuesday projected Indian economy to contract 5% this fiscal year.
Gold was trading near a two-week low on Wednesday as optimism around several economies re-opening dulled the metal’s safe-haven appeal, although increasing Sino-U.S. frictions over Beijing’s proposed security law for Hong Kong tempered losses. Spot gold eased 0.1% to $1,710.01 per ounce by 0301 GMT, trading near last session’s low of $1707.10, when prices dropped as much as 1.3%. U.S. gold futures were also down 0.1% to $1,703.20. Asian shares shed some of their recent gains after U.S. President Donald Trump said on Tuesday Washington was working on a strong response to China’s planned national security law for Hong Kong, adding it would be announced before the end of the week. Despite the pullback in bullion prices, the outlook remains positive for gold, which is seen as a safe-haven asset during political and economic uncertainties, analysts said. Economic prospects for the developed world this year have darkened again in the past month, with a V-shaped sharp recovery expected by less than one-fifth of economists polled by Reuters. Palladium fell 1% to $1,937.38 per ounce, platinum slipped 0.5% to $825.90, and silver inched down 0.1% to $17.08.
Oil prices fell on Wednesday on revived concerns over how quickly fuel demand will recover even as coronavirus lockdowns begin to ease in many countries, while U.S.-China tensions added to negative sentiment. Brent crude futures fell 21 cents, or 0.6%, to $35.96 by 0120 GMT. U.S. West Texas Intermediate (WTI) crude futures were down 31 cents, or 0.9%, at $34.04 a barrel. The Organization of the Petroleum Exporting Countries and producers including Russia, a grouping referred to as OPEC+, are cutting their output by nearly 10 million barrels per day in May-June to buttress prices as measures to rein in the coronavirus pandemic have slashed fuel demand. In the United States, where some states are opening up after lockdowns, optimism about an increase in demand has supported sentiment, but the recovery is fragile, analysts caution. The Memorial Day holiday just passed typically heralds the start of the peak U.S. demand season. Some analysts and banks are predicting a balanced oil market as soon as June, but that could be too optimistic, according to Eurasia Group. Still as U.S. demand picks up, however slowly, there are signs that inventories are falling. U.S. crude inventories are forecast to have fallen for a third week last week, according a Reuters poll of analysts. Prices were also under pressure after U.S. President Donald Trump’s economic adviser, Larry Kudlow, said China was making “a big mistake” with national security legislation on Hong Kong. Beijing’s proposed security law would reduce the territory’s separate legal status. China’s parliament is expected to approve it by Thursday.