GLOBAL NEWS

US Stocks Halt Rally as Dollar Falls; Oil Gains

US stocks halted a six-day winning streak as investors debated whether commitments by the Federal Reserve and the Biden administration to let the economy run hot will spark destabilizing inflation. The S&P 500 fell by 0.11% to 3,911.23 while Dow Jones was down 9.93 points (0.032%) to 31,375.83.

Biden Backs Tighter Income Rules for Aid Checks

President Joe Biden backed House Democrats’ proposal for quicker phase-outs of planned US$1,400 stimulus checks. House and Senate Democrats are clashing on the design of expanded support for the unemployed, an early sign of the intra-party squabbling in the US$1.9 trillion pandemic relief bill in the coming weeks. The debate comes as the House continues to release elements of the bill.

Fed’s Kaplan Expects Temporary Inflation Spikes During Recovery

Bouts of higher inflation won’t be surprising and while they’ll likely be transitory, it’ll be something to watch closely, said Federal Reserve Bank of Dallas President Robert Kaplan. A recovery from the Covid-19 pandemic this year, bolstered by vaccine distributions and increased economic activity, will drive growth, lower unemployment and probably propel some increase in prices as consumers return to more widespread economic engagement.

UK Retail Sales Fall as New Variant of Virus Spooks Consumers

England’s third lockdown hit non-essential retailers harder than the previous one in November, with the new variant of the coronavirus hampering spending and confidence last month, according to the British Retail Consortium. Clothing and footwear stores fared particularly badly as retailers on the whole saw the value of sales decline from a year earlier.

French Economy Stabilizes at 5% Below Pre-pandemic Levels

French economic activity is running at 5% below pre-crisis levels as the government holds off from imposing a full Covid-19 lockdown beyond the current curfew and closures in some sectors, the Bank of France said. After dipping to 7% below normal during November’s lockdown, the economy improved somewhat in December and is expected to remain steady through February, according to the central bank’s monthly survey.

Korea’s Jobless Rate Hits Highest Since 1999 Amid Virus Hit

South Korea’s jobless rate climbed to the highest since 1999 in January as the country kept tight restrictions in place to rein in local coronavirus outbreaks. The unemployment rate jumped to 5.4% in January from a revised 4.5% the prior month, the statistical office reported. Economists had forecast a 4.5% rate. The nation shed 982,000 jobs from a year earlier for an 11th straight month of lower employment.

India Spending on Growth Later Leaves Little for Vulnerable Now

India has vowed to spend almost half-a-trillion dollars to bring the pandemic-ravaged economy back onto a growth path, but that risks leaving vulnerable sections that still need support without immediate help. Prime Minister Narendra Modi’s administration sees a 26% jump in capital expenditure -- money for creating or maintaining assets, including infrastructure -- for the year starting April 1.

Oil Climbs With Market Structure Firming on Tightening Supplies

Oil continued its advance for the seventh straight session on expectations of a strong rebound in demand and as the dollar weakened. Brent crude for April settlement rose US$0.53 to US$61.09 per barrel.

Source: Affin Hwang Research - 10 Feb 2021