US stocks grind higher with focus on stimulus

US equities eked out a gain as investors tried to gauge the outlook for a stimulus bill to blunt the economic impact of the coronavirus pandemic. The S&P 500 rose by 0.36% to 3,306.51 while Dow Jones was up 164.07 points (0.62%) to 26,828.47.

Fed’s Daly says US needs longer bridge of support for economy

The US economy needs more support than originally thought as a resurgence in the coronavirus pandemic weighs on growth, said Federal Reserve Bank of San Francisco President Mary Daly. The economic recovery is stalling in parts of the country experiencing new peaks in virus cases while Congress debates its next round of fiscal stimulus. An extra US$600 per week in benefits for the unemployed expired at the end of July, as did a federal eviction moratorium.

White House, Democrats aim for virus relief deal by end of week

US Treasury Secretary Steven Mnuchin said the White House and Democrats aim to strike a deal on virus-relief legislation by the end of the week, even though the two sides remain far apart on some key issues. Mnuchin and White House Chief of Staff Mark Meadows said that Republicans would agree to a moratorium on evictions through the end of the year, and made an offer on supplemental unemployment insurance, one of the main sticking points in the negotiations.

ECB’s Lane warns of slow recovery amid virus resurgence

European Central Bank chief economist Philip Lane cautioned against reading too much into recent economic data and warned that a global resurgence of coronavirus cases will weigh on consumers and businesses for some time. It would be “unwise” to draw strong conclusions from the euro area’s less-bad-than-expected second-quarter performance, which should be jointly assessed with the three months through September, Lane said.

UK plans US$1.7bn in building projects to lift economy

Boris Johnson’s government will invest nearly 1.3bn pounds (US$1.7bn) in building projects and provide 2bn pounds in energy efficiency grants in an effort to create jobs and rally the pandemic-hit UK economy. Housing Secretary Robert Jenrick said 300 “shovel-ready” projects will receive a share of a 900mn pound Getting Building Fund, and a further 360mn pounds will go toward homes on previously developed “brownfield” land.

Australia central bank resumes bond buying after 3-month hiatus

Australia’s central bank is returning to the government bond market after a three-month hiatus as it aims to re-anchor yields on the three-year security that it targets through its purchasing program. Reserve Bank Governor Philip Lowe announced the resumption of bond buying, when the board kept its interest rate and yield target unchanged at 0.25%.

New Zealand jobless rate unexpectedly fell in second quarter

New Zealand employment fell less than forecast in the second quarter and the jobless rate unexpectedly declined even as the economy slumped. Employment fell 0.4% from the first quarter; economists expected a 2% contraction. The jobless rate dropped to 4% from 4.2%, Statistics New Zealand said.

Oil jumps as Lebanon explosion sparks fears over instability

Oil climbed to the highest level in nearly two weeks after an explosion at Lebanon’s main port rocked the capital Beirut, stoking fears over instability in the region. Brent crude for October settlement rose US$0.28 to US$44.43 per barrel.

Source: Affin Hwang Research - 5 Aug 2020