GLOBAL NEWS

Stocks Rise for Third Straight Week; Dollar Falls

US stocks rose as investors digested this week’s initial burst of corporate earnings, economic data and coronavirus news. The dollar weakened and crude oil declined. The S&P 500 rose 0.3% to 3,224.73 while Dow Jones was down 62.76 points (0.2%) to 26,671.95.

World Bank Urges G-20 to Extend Debt Suspension Through 2021

World Bank President David Malpass called on the Group of 20 leading economies to extend the current suspension of debt repayments by the poorest countries through the end of 2021 and broaden the scope to deal with the global pandemic. The virus and worldwide recession will lead to rising poverty in impoverished nations and debt burdens for some countries are rising to crisis levels, Malpass said.

IMF Urges US to Move Quickly to Enact Fresh Round of Stimulus

The International Monetary Fund (IMF) urged the US to act fast in implementing another round of fiscal measures to speed the recovery from the Covid-19 pandemic in the world’s largest economy. “The US has fiscal space and it should be deployed quickly to hasten the recovery from the second-quarter contraction, permanently improve the social safety net, and facilitate a broader remaking of the US economy,” the IMF said.

Fed May Adopt Yield-curve Caps, Ex-chairs Bernanke, Yellen Say

Former Fed Chairs Ben Bernanke and Janet Yellen warned that the US economic recovery from the coronavirus shock could be slow and uneven and said the central bank may opt to cap yields on Treasury securities to help it along. “It is possible, though not certain,” that the Fed will implement yield-curve control, they said.

Merkel Casts Doubt on European Recovery Fund Deal This Week

German Chancellor Angela Merkel raised doubts that European Union leaders, meeting in person for the first time in five months, would be able to agree this week on a landmark 750bn-euro (US$855bn) recovery fund to help their economies heal from the pandemic. “We’re entering these discussions with plenty of vigor, but I have to say that the differences remain very, very great, so I can’t predict whether we’ll reach an agreement here,” Merkel said.

Germany Pledges Extra 3bn Euros for Global Aid at G-20

German Finance Minister Olaf Scholz pledged an additional 3bn euros (US$3.4 bn) to the world’s poorest countries through the International Monetary Fund’s “poverty reduction growth trust.” The extra funding is designed to help countries access longterm loans and overcome liquidity bottlenecks, especially during the coronavirus crisis, Germany’s finance ministry said. Germany is providing 8.7bn euros in international aid in 2020 and 2021, the ministry said.

Australia Boosts Small Business Support With Loan Extension

The Australian government will ramp up support for small businesses hit by the coronavirus pandemic, offering guaranteed loans of up to A$1mn to about 3.5mn firms. Announcing the extended support package, Treasurer Josh Frydenberg said it would ensure credit continued to flow through the economy. The cap on the loan guarantee will be lifted from A$250,000, with the maximum term extended by two years to five.

Oil Slips With Weak Economic Data Reinforcing Sour Demand View

Crude clung to losses amid a combination of weak economic data and signals that a recovery in consumption may be slowing. Brent crude for September settlement fell US$0.23 to US$43.14 per barrel.

Source: Affin Hwang Research - 20 Jul 2020