Stocks Climb to All-time Highs Amid Treatment Hope

US stocks rose to record highs and bonds fell on signs that the Trump administration may fast-track vaccines and treatments for coronavirus. The S&P 500 rose by 1.0% to 3,431.28 while Dow Jones was up 378.13 points (1.35%) to 28,308.46.

Fed Study Finds Virus Is a Powerful Downward Drag on Inflation

US inflation has slowed sharply since the onset of the coronavirus pandemic and a new Federal Reserve study squarely pins the blame on a collapse in demand as consumers sheltered in home to avoid infection. The Fed targets 2% inflation according to the personal consumption expenditure price index. It also pays close attention to a core reading of that gauge which strips out volatile food and energy prices.

US Recession Likely to End Late 2020 or 2021, NABE Survey Says

The US economy will emerge from the recession in the second half of this year or at some point in 2021, and a majority of economists said Congress needs to extend supplemental aid, according to a National Association for Business Economics survey. Two-thirds of panelists said the economy is still in the recession that started in February, while nearly 80% indicated that there is at least a one-in-four chance of a double-dip recession.

Consumer Confidence in Canada Approaching Pre-pandemic Levels

Consumer confidence in Canada continued its march higher as it quickly approaches pre-pandemic levels. The Bloomberg Nanos Canadian Confidence Index, a composite measure of financial health and economic expectations, ticked up to 52.8 last week, from 51.7 a week earlier. The index is at the highest since mid-March, and has made up more than four-fifths of its losses during the height of the pandemic.

‘Great Urgency’ to Make Over Singapore’s Economy, Says President

With the coronavirus pandemic threatening the global openness and integration that have allowed Singapore to prosper, President Halimah Yacob said there’s “great urgency” to transform the city-state’s economy. She said the country will resume air travel safely and help its companies develop links to new markets. Meanwhile, efforts to bolster resilience in critical areas such as food, health care and supply chain management can become new sources of growth, she said.

Asia's best-performing currency gets boost as central bank stands aside

The Philippine peso advanced closer toward the psychologically significant level of 48 per dollar after central bank Governor Benjamin Diokno said the market was free to determine its level. There are a number of benefits to having a strong currency, Diokno said. These include weaker inflationary pressure, lower foreign debt service costs, and the potential for beefing up international reserves.

China Is Hungry for Imported Farm Goods Amid Demand Recovery

China boosted imports of farm goods ranging from corn to pork to sorghum last month, signaling a demand recovery for protein in the world’s most-populous nation. Imports of corn, used in animal feed by the world’s second-largest consumer, climbed to a three-year high in July as the country sought more supplies to plug a widening shortage and cool surging prices.

Oil Gains as US Gulf Output and Refineries Halted Before Storm

Oil rallied and gasoline surged to a five-month high as energy companies suspended offshore operations and refiners shuttered Gulf Coast plants with Tropical Storm Laura expected to strengthen into a hurricane before making landfall later this week. Brent crude for October settlement gain US$0.78 to US$45.13 per barrel.

Source: Affin Hwang Research - 25 Aug 2020