Worldwide: Headlines
U.S. stock futures fall as infections spike hits confidence
TOKYO (Reuters) – U.S. stock futures dropped in early Asian trade on Monday as rising coronavirus cases in the United States raised more doubts about a quick economic rebound from the massive downturn triggered by the pandemic.
U.S. S&P 500 futures ESc1 were down 0.4% at 2323 GMT, having fallen as much as 1.05% in earlier trade.
Chicago-traded futures NIYc1 indicate Japan’s Nikkei .N225 is on course to fall 1.3%.
Apple Inc (AAPL.O) said on Friday it would temporarily shut 11 U.S. stores as coronavirus cases continue to rise in southern and western states.
Data from Johns Hopkins University shows new U.S. cases on Saturday hit the highest level since early May.
“The second wave is becoming a theme for markets. The increase in states such as Florida and South Carolina is big enough to be labelled as second wave,” said Yoshinori Shigemi, global strategist at JPMorgan Asset Management.
Full Coverage: Reuters
WHO reports largest single-day increase in coronavirus cases
GENEVA (AP) — The World Health Organization on Sunday reported the largest single-day increase in coronavirus cases by its count, at more than 183,000 new cases in the latest 24 hours.
The UN health agency said Brazil led the way with 54,771 cases tallied and the U.S. next at 36,617. Over 15,400 came in in India.
Experts said rising case counts can reflect multiple factors including more widespread testing as well as broader infection.
Overall in the pandemic, WHO reported 8,708,008 cases — 183,020 in the last 24 hours — with 461,715 deaths worldwide, with a daily increase of 4,743.
More than two-thirds of those new deaths were reported in the Americas.
In Spain, officials ended a national state of emergency after three months of lockdown, allowing its 47 million residents to freely travel around the country for the first time since March 14. The country also dropped a 14-day quarantine for visitors from Britain and the 26 European countries that allow visa-free travel.
Full Coverage: Associated Press
EU and China to seek to cool tensions at video summit
BRUSSELS (Reuters) – The European Union and China will seek to cool tensions on Monday at a video summit, their first formal talks since ties soured over European accusations that Beijing has spread disinformation about the novel coronavirus.
European Commission President Ursula von der Leyen and European Council President Charles – the EU’s chief executive and chairman – will hold video conferences with Premier Li Keqiang and President Xi Jinping.
“We are ready to work with China. But we also expect China to assume its responsibilities as one of the world’s largest economies,” said a senior official helping prepare the summit. “The pandemic has heightened some (EU) concerns.”
No joint statement is expected after the summit, scheduled to start at 0800 GMT.
EU officials say China has sought to pressure EU countries that criticise its handling of the novel coronavirus, using social media to spread fake reports of European neglect of COVID-19 patients. Beijing has denied wrongdoing.
Even before the pandemic, the two trading partners had differences, including over Hong Kong and an investment pact that is being negotiated.
Full Coverage: Reuters
American Airlines seeks $3.5 billion in new financing
(Reuters) – American Airlines Group Inc (AAL.O) said on Sunday it plans to secure $3.5 billion in new financing, to improve the airline’s liquidity as it grapples with travel restrictions caused by the coronavirus.
The company plans to raise $1.5 billion by selling shares and convertible senior notes due 2025, the airline said in a statement.
Additionally, the airline said it will offer $1.5 billion in senior secured notes and that it intends to enter into a new $500 million term loan facility due 2024.
The company expects to use the net proceeds from the stock and convertible notes offerings for general corporate purposes and to enhance its liquidity position, the airline added.
The stock and convertible notes offerings, first reported by Bloomberg News, include a 30-day option for the underwriters to purchase up to $112.5 million of additional common shares and up to $112.5 million of additional convertible notes respectively, the company said.
Goldman Sachs & Co. LLC, Citigroup, BofA Securities and JP Morgan will be acting as representatives for the underwriters.
Full Coverage: Reuters
Inflation dog may finally bark, investors bet
LONDON (Reuters) – Gold, forests, property stocks, inflation-linked bonds – these are just some of the assets investors are pouring money into on the view that the recent explosion of government spending and central bank stimulus may finally rouse inflation from its decade-long slumber.
With the world economy forecast to shrink 6% this year, it may seem like a strange time to fret about inflation.
And sure enough, market-based gauges suggest an uptrend in prices may not trouble investors for years. U.S. and euro zone inflation gauges indicate that annual price growth will be running at barely over 1% even a decade from now. USBEI10Y=RR EUIL5YF5Y=R.
So if inflation really is, as the IMF put it in 2013, “the dog that didn’t bark”, failing to respond to all the central bank money-printing unleashed in the wake of the 2008-9 crisis, why should investors prepare for it now, especially as demographics and technology are also conspiring to tamp down inflation across the developed world?
The answer is that some think the dog really will bark this time, partly because – unlike in the post-2008 years – governments around the world have also been rolling out massive spending packages, in a bid to limit the impact of the coronavirus pandemic.
“We will be pushing, pushing, pushing on the string and dropping our guard, then 3-5 years from now…that’s when the (inflation) dog will start barking,” said PineBridge Investments’ head of multi-asset Mike Kelly, who has been buying gold on that view.
Full Coverage: Reuters
China ‘unsurprisingly’ keeps benchmark loan rate unchanged for second straight month
China left its benchmark lending rate unchanged for the second straight month at its June fixing on Monday, matching market expectations, after the central bank kept borrowing costs on medium-term loans steady last week.
The one-year loan prime rate (LPR) remained at 3.85 per cent, while the five-year LPR was also steady at 4.65 per cent.
The move in the LPR affects the price lenders charge companies and households for loans, and the five-year rate influences the pricing of mortgages.
A Reuters survey of traders and analysts conducted last week showed more than 70 per cent of all participants expected China to keep the lending benchmark unchanged this month. Only 20 per cent of all respondents predicted a marginal cut to the one-year LPR.
The People’s Bank of China (PBOC) rolled over some maturing medium-term loans last week, while keeping interest rates unchanged for the second straight month in a row.
The medium-term lending facility (MLF), one of the PBOC’s main tools in managing longer-term liquidity in the banking system, serves as a guide for the new LPR. The interest rate on one-year MLF stands at 2.95 per cent.
Full Coverage: South China Morning Post
Hong Kong wealth managers can’t wait for new Connect programme, with Singapore ready to pounce on city’s troubles
China’s plan to turn the Greater Bay Area into a hub for wealth management products will help turbocharge Hong Kong’s fund industry, giving it an invaluable edge in warding off challenges from Singapore, market players said.
While Singapore is firmly entrenched in Southeast Asia, the former British colony could stake in a leading role in the broader Asian region with the opening up of the Greater Bay Area in the coming years, according to the Hong Kong Investment Funds Association (HKIFA).
“The Wealth Management Connect will expand the customer size of Hong Kong fund houses by 10 times,” Chairman Bruno Lee said in an interview with the Post. “This will be an important driving force to help Hong Kong to win over Singapore as a leading hub in Asia.”
The programme cannot come soon enough for the city whose future has been clouded by back-to-back turmoil, first from the anti-government protests last year and now the controversy over the national security law. Singapore, a perennial rival and a pillar of stability, is seen as benefiting from capital outflows from Hong Kong.
The new Connect programme will be the fourth China-Hong Kong cross-border financial plan, after the introduction of several stock and bond connections between 2014 and 2017. Mainland investors now contribute 5 to 10 per cent of daily stock transactions on the Hong Kong stock exchange, according to market data.
“These previous connect schemes have proven to be successful for their high turnover,” Lee said. “We expect the new wealth management scheme will follow the same growth pattern.”
Full Coverage: South China Morning Post
