US stocks fall with Congress at odds on aid bill

US stocks fell after Republican demands left Congress without a deal on a federal spending bill. The S&P 500 fell by 0.35% to 3,709.41 while Dow Jones was down 124.32 points (0.41%) to 30,179.05.

Congressional leaders agree on pandemic relief

Congressional leaders said they have agreed on the terms of a roughly US$900bn plan to help the US economy weather the coronavirus pandemic, though the legislation is still being written and the House and Senate won’t vote on it until Monday. Congress will pass a one-day temporary extension of government funding to avoid a partial shutdown of federal agencies before the package is voted on and signed into law.

Fed’s Daly welcomes more fiscal aid as stimulus deal nears

Another US$900bn of fiscal support would “absolutely” make a significant difference to the US economy’s ability to endure Covid-19, but “challenging months” lie ahead, a top Federal Reserve official said. “This support in unequivocally beneficial,” Mary Daly, president of the Federal Reserve Bank of San Francisco, said.

BOE’s Vlieghe says may need subzero rates for full recovery

The Bank of England should be prepared to add monetary stimulus including negative interest rates to complete the economic recovery from the pandemic, according to policy maker Gertjan Vlieghe. While vaccines may mean current measures are enough to get through the health crisis, the hit to jobs and investment -- combined with the need to deal with Brexit “whether there is a deal or not” -- could mean the recovery peters out sooner than desired, the Monetary Policy Committee member said.

German businesses are optimistic about recovery in 2021

German businesses are hopeful that Europe’s largest economy will pick up in the first half of next year. A gauge measuring expectations for the next six months rose to 92.8 in December from 91.8 the previous month, according to the Ifo institute. Companies were also more optimistic about the current situation, a sign that tough new coronavirus restrictions only affect certain sectors.

Kuroda to keep investors guessing with three-month policy review

Haruhiko Kuroda conjured up another surprise at the Bank of Japan’s latest meeting, promising a review of its ultra-easy monetary policy without a total overhaul and leaving economists and investors with three months to speculate about possible changes. At its last meeting of a testing year, the BOJ officials led by Governor Kuroda extended by six months its special support programs for pandemic-hit businesses and kept its key interest rates and asset purchases unchanged.

Philippine pandemic recovery steps await Duterte’s approval

The Philippines has lined up key measures to support economic recovery for President Rodrigo Duterte’s approval, as it aims for a strong rebound in 2021 after plunging into recession this year amid the pandemic. Congress has approved a record 4.5 trillionpeso ($93.6 billion) spending plan for 2021, and allowed unspent funds from this year’s budget and pandemic relief package to be rolled over to next year. A measure helping banks manage bad loans is also up for Duterte’s approval.

Oil posts weekly gain with stimulus hopes aiding vaccine rally

Oil rose for a seventh straight week as efforts to pass another US virus relief package added to optimism that the vaccine’s rollout will provide a long-awaited boost to demand. Brent crude for February settlement gained US$0.76 to US$52.26 per barrel.

Source: Affin Hwang Research - 21 Dec 2020