US, allies agree to work to improve supply chains

The United States and 17 allies have agreed to work together to improve and diversify global supply chains to avoid the shortages that plagued the economy during the pandemic, officials said Wednesday.

US Secretary of State Antony Blinken and Commerce Secretary Gina Raimondo co-hosted the Supply Chain Ministerial Forum on Tuesday and Wednesday. 

China was not a part of the meeting, and US officials have said they aim to increase "friend-shoring" to move production of key supplies to allied nations.

"The shocks to global supply chains from pandemics, wars and conflicts, extreme climate impacts, and natural disasters have put in stark relief the urgent need to further strengthen supply chains, to work to reduce and end near-term disruptions, and to build long-term resilience," the participants said in a joint statement at the conclusion of the virtual event.

Supply chain snarls that began during the pandemic have been exacerbated by Russia's war in Ukraine and stringent COVID-19 restrictions in China.

COVID-19 lockdowns in China has led to shortages of key components, particularly of microchips and auto parts, that have caused global inflation to skyrocket to record highs.

Forum attendees agreed to collaborate on solutions to short-term issues including transportation and "supply chain disruptions and bottlenecks," as well as long-term challenges "that make our supply chains vulnerable and cause spillover effects for consumers, large and small businesses, workers, and families," the statement said.

Goals include increasing transparency of trade information, diversifying sources, and increasing the security and sustainability of supply chains.

Officials from Australia, Brazil, Canada, the Democratic Republic of Congo, the European Union, France, Germany, India, Indonesia, Italy, Japan, Mexico, the Netherlands, South Korea, Singapore, Spain and the United Kingdom participated in the meeting.

Agence France-Presse

Asia facing 'stagflationary outlook' amid Ukraine war: IMF

WASHINGTON - Asian nations, like the rest of the world, are being battered by countervailing forces such as the war in Ukraine that are raising prices while holding back growth, the IMF said.

"The region faces a stagflationary outlook, with growth being lower than previously expected, and inflation being higher," said Anne-Marie Gulde-Wolf, acting director of the IMF's Asia and Pacific Department.

The regional outlook, which follows the World Economic Outlook released last week, shows the growth forecast for Asia was cut to 4.9 percent, impacted by the slowdown in China, which is having ripple effects on other closely-linked economies.

Inflation is now expected to rise 3.2 percent this year, a full point higher than expected in January, she said.

"Despite the downgrade, Asia remains the world's most dynamic region, and an important source of global growth," Gulde-Wolf said in remarks prepared for delivery to a press briefing.

But the Russian invasion of Ukraine and Western sanctions on Moscow have driven up food and fuel prices worldwide, while major central banks are raising interest rates to combat inflation, which will pressure countries with high debt loads.

A larger-than-expected slowdown in China due to prolonged or more widespread Covid-19 lockdowns or a longer-than-expected slump in the property market presents "a significant risk for the region."

"This a challenging time for policymakers as they try to address pressures on growth and tackle rising inflation," the IMF official said, noting that the headwinds will exacerbate the damage from the Covid-19 pandemic.

Outlooks vary within the region, depending on countries' reliance on imported energy and links to China, with growth in Pacific island nations slowing sharply, while Australia saw a slight upgrade, she said.

Governments will need strong responses, starting with targeted aid to poor families most harmed by higher prices, the IMF said.

Many will need to tighten monetary policy amid rising inflation, while those with high debt loads may have to cut spending and even seek debt relief, the fund economists said in a blog post.

"Slower growth and rising prices, coupled with the challenges of war, infection and tightening financial conditions, will exacerbate the difficult policy trade-off between supporting recovery and containing inflation and debt," the blog said.

Agence France-Presse

Weather disasters cost $20 billion more than last year: NGO

PARIS - The ten most expensive weather disasters this year caused more than $170 billion (150 billion euros) in damage, $20 billion more than in 2020, a British aid group said Monday.

Each year, UK charity Christian Aid calculates the cost of weather incidents like flooding, fires and heat waves according to insurance claims and reports the results. 

In 2020, it found the world's ten costliest weather disasters caused $150 billion in damage, making this year's total an increase of 13 percent.

Christian Aid said the upward trend reflects the effects of man-made climate change and added that the ten disasters in question also killed at least 1,075 people and displaced 1.3 million.

The most expensive disaster in 2021 was hurricane Ida, which lashed the eastern United States and caused around $65 billion in damages. After crashing into Louisiana at the end of August, it made its way northward and caused extensive flooding in New York City and the surrounding area.

Spectacular and deadly flooding in Germany and Belgium in July was next on the list at $43 billion in losses.

A cold snap and winter storm in Texas that took out the vast state's power grid cost $23 billion, followed by flooding in China's Henan province in July that cost an estimated $17.6 billion.

Other disasters costing several billion dollars include flooding in Canada, a late spring freeze in France that damaged vineyards, and a cyclone in India and Bangladesh in May. 

The report acknowledged its evaluation mainly covers disasters in rich countries where infrastructure is better insured and that the financial toll of disasters on poor countries is often incalculable.

It gave the example of South Sudan where flooding affected around 800,000 people.

"Some of the most devastating extreme weather events in 2021 hit poorer nations, which have contributed little to causing climate change," the report's press release noted.

In mid-December, the world's biggest reinsurer, Swiss Re, estimated natural catastrophes and extreme weather events caused around $250 billion in damage this year. 

It said the total represented a 24 percent increase over last year and that the cost to the insurance industry alone was the fourth highest since 1970.

Agence France-Presse

Asian shares rise on dovish Fed chair, oil up as hurricane batters Louisiana

HONG KONG - Asian shares started the week with gains and the dollar was not far off two-week lows after US Federal Reserve Chairman Jerome Powell struck a more dovish tone than some investors expected in long-awaited speech on Friday.

Oil prices rose, meanwhile, after energy firms suspended production as Hurricane Ida slammed into the U.S.' southern coast.

Japan's Nikkei rose 0.9 percent soon after the bell, and MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.32 percent in early trading before Chinese markets had opened.

Australia climbed 0.39 percent and Korea's Kopsi gained 0.54 percent.

U.S. stock futures, the S&P 500 e-minis, were barely moved, up 0.04 percent.

Investors had been waiting to see whether Powell, who was speaking at a symposium in Jackson Hole, Wyoming, would give a clear indication of his views on timing of the central bank's tapering of asset purchases or hiking interest rates to start removing monetary stimulus.

However, in his prepared remarks, he offered no indication on cutting asset purchases beyond saying it could be "this year", causing the S&P 500 and the Nasdaq to close last week at new record highs.

The next big event on traders' calendars is U.S. nonfarm payroll figures for August due to be published Friday, as Powell has suggested an improvement in the labor market is one major remaining prerequisite for action.

"A strong payrolls print could instigate a debate for a September tapering start," Rodrigo Catril, senior FX strategist at NAB, said in a note.

The absence of a timetable for tapering caused U.S. benchmark Treasuries and the dollar to slip, and both trends continued on Monday morning in Asia.

The yield on benchmark 10-year Treasury notes was 1.3054 percent compared with its U.S. close of 1.312 percent, and the dollar index which measures the greenback against a basket of currencies was around a two week low.

Investors in China, in contrast, are watching data this week to see whether they will indicate policymakers are more likely step up easing measures.

Purchasing manager surveys for manufacturing and services are both due this week, with traders waiting to see whether a trend towards slowing growth will continue, a shift that has not been helped by recent localized movement restrictions to cope with an increase in cases of the Delta variant of the new coronavirus.

"We expect both the manufacturing and services PMIs to moderate in August, given the widespread Delta variant and strict lockdown," said Barclays analysts in a note.

"With slowing growth momentum and dovish signals from the (People's Bank of China) meeting this week, we expect more easing, but still at a measured pace"

Oil was also in focus after energy firms suspended 1.74 million barrels per day of oil production in the U.S. Gulf of Mexico as Hurricane Ida slammed into the Louisiana coast as a Category 4 storm.

U.S. crude rose 0.86 percent to $69.34 a barrel. Brent crude rose 1.25 percent to $73.38 per barrel.

Gold was slightly higher, with the spot price gold was traded at $1,817.7863 per ounce, up 0.07 percent.

(Editing by Lincoln Feast.)

-reuters

Asian shares on edge as day of Fed chair speech arrives

HONG KONG - Asian shares were mixed on Friday morning as slight gains in China were balanced by declines elsewhere and investors globally turned cautious ahead of a long-awaited speech by Fed Chair Jerome Powell.

Remarks from the Federal Reserve's more hawkish policy makers and a deadly attack in Afghanistan also subdued sentiment and helped the dollar gain against a basket of its peers.

MSCI's broadest index of Asia-Pacific shares outside Japan lost 0.1% while Japan's Nikkei shed 0.46%.

Australian shares fell 0.18%, and Hong Kong and Korea were flat.

However, in a reversal of recent weeks where Chinese stocks weighed on the region, Chinese blue chips gained 0.57% after China's central bank made its biggest weekly cash injection into the banking system since February.

"There are three things that are conspiring at the moment to sap sentiment," said Kyle Rodda, an analyst at IG markets. 

He was referencing a weak lead from Wall Street after the attack in Afghanistan, the fact Asian markets had been lagging this week because investors were nervous about the potential for future regulatory crackdowns in China, and caution ahead of the upcoming Jackson Hole Symposium.

Powell is set to speak at 1400 GMT in the Kansas City Fed's central banking conference, an event normally held in Jackson Hole, Wyoming, which has been often used by Fed policymakers in the past to provide guidance on their future policy.

Traders will analyze Powell's words for any hints about when the Fed will begin tapering its asset purchasing program.

Analysts at RBC said in a note that while much of the summer had been spent waiting for the event, there was "skepticism that the Fed will provide more specific information around a timetable... amidst a rise in Delta variant COVID cases."

Islamic State struck the crowded gates of Kabul airport in a suicide bomb attack on Thursday, killing scores of civilians and at least 13 U.S. troops.

This, along with public remarks by the U.S. Federal Reserve's hawkish wing urging the central bank to begin paring bond purchases contributed to Wall Street closing slightly lower, ending a streak of all-time closing highs.

The Dow Jones Industrial Average fell 0.54%, the S&P 500 lost 0.58%, and the Nasdaq Composite dropped 0.64%.

Dallas Fed President Robert Kaplan said he believed the progress of economic recovery warrants tapering of the Fed's asset purchases to commence in October or shortly thereafter, following earlier comments from St. Louis Fed President James Bullard, who said the central bank was "coalescing" around a plan to begin tapering.

Early in Asian hours, U.S. stock futures, the S&P 500 e-minis, were flat.

The yield on benchmark 10-year Treasury notes was 1.3441% down from a two-week high of 1.375% set the day before, as traders were cautious ahead of Powell's speech.

The dollar when measured against a basket of currencies has gained a little from Thursday's lows. The euro traded at $1.1747, having eased from the previous day's high of $1.1779 as a survey showed weaker consumer sentiment in Germany.

U.S. crude ticked up 0.34% to $67.65 a barrel. Brent crude rose 0.25% to $71.27 per barrel, resuming this week's rally after taking a rest on Thursday, as energy companies began shutting production in the Gulf of Mexico ahead of a potential hurricane forecast to hit on the weekend

-reuters 

Thailand downgrades 2021 outlook as COVID-19 hampers recovery

BANGKOK - Thailand downgraded its economic growth forecast for 2021 on Monday as it battles its worst COVID-19 wave, which has brought record numbers of new infections and deaths. 

The kingdom last year suffered its worst full-year performance since the Asian financial crisis of 1997 with a 6.1 percent economic contraction.

The Office of the National Economic and Social Development Council (NESDC) had initially given a cool forecast for recovery during the first quarter, estimating the growth of 1.5 to 2.5 percent for 2021.

But on Monday, NESDC secretary-general Danucha Pichayanan announced it had to revise that figure down to between 0.7 and 1.2 percent. 

"This crisis caused by the pandemic is unlike the financial crises of 1997 and 2009 -- our estimation is based on domestic causes," he said during a press conference.

He added that the new forecast was dependent on the hope that the pandemic's curve will flatten after the third quarter, thus enabling a relaxation of restrictions by October.

"But if the pandemic continues and relaxation cannot start in the fourth quarter... the growth could be lower than 0.7 percent," Danucha said. 

Thailand's GDP for the second quarter was up 7.5 percent on the same period last year, the first sign of recovery since the pandemic.

The growth was most visible in agricultural, industrial and exports sectors, while tourism -- once Thailand's cash cow -- remained sluggish. 

Since the start of the pandemic Thailand has recorded 928,314 cases with 7,733 deaths, the bulk of them detected since April.

The country has seen more than 20,000 new cases reported daily for nearly a week, crowding its already-hampered healthcare system and filling up its state-run quarantine facilities. 

Agence France-Presse

Stocks sag on concerns about Covid, global growth

NEW YORK -- Global stocks mostly fell Friday as worries about rising Covid-19 cases and their effect on global growth weighed on sentiment, pushing Wall Street into the red for the week.

After data showed an unexpected rise in US retail sales, Wall Street pushed higher at the open. But markets soon tumbled into the red and losses grew as the day progressed.

Analysts pointed to profit taking as a factor in Friday's session and throughout the week following records earlier in the month. 

Investors are "continuing to trim winning positions" as they await more clarity on the course of the economy, said Briefing.com analyst Patrick O'Hare.

The broad-based S&P 500 ended down 0.8 percent at 4,327.16, taking its weekly losses to around one percent.

The highly-contagious Delta variant has led to surging infection rates in many parts of the world, leading authorities to reimpose certain restrictions.

"Covid-19 concerns still linger and the economic outlook is not as bright as it was just a few weeks ago," said market analyst Edward Moya at trading platform Oanda.

Major European bourses retreated, along with Tokyo, which closed one percent lower as investors worried over rising Covid-19 infections and the Bank of Japan trimmed its economic growth forecast for the current fiscal year.

Hong Kong's leading index was flat as late profit-taking wiped out earlier gains ahead of a US warning about doing business in the territory.

In a long-awaited advisory that has already been denounced by China, the United States warned its business community of "growing risks" of operating in Hong Kong due to China's clampdown.

The advisory acknowledged that Hong Kong, a former British colony handed back to China in 1997, "retains many economic distinctions" from the mainland, including stronger protections of intellectual property.

But Washington pointed to a declining climate under a national security law enacted last year, including the arrest of one US citizen -- John Clancey, a prominent human rights lawyer.

Shanghai closed 0.7 percent lower while Seoul, Taipei, Kuala Lumpur and Bangkok also retreated. Wellington was flat while Sydney, Singapore, and Jakarta ticked higher.

- Key figures around 2030 GMT -

New York - Dow: DOWN 0.9 percent at 34,687.85 (close)

New York - S&P 500: DOWN 0.8 percent at 4,327.16 (close)

New York - Nasdaq: DOWN 0.8 percent at 14,427.24 (close)

London - FTSE 100: DOWN less than 0.1 percent at 7,008.09 (close)

Frankfurt - DAX 30: DOWN 0.6 percent at 15,540.31 (close)

Paris - CAC 40: DOWN 0.5 percent at 6,460.08 (close)

EURO STOXX 50: DOWN 0.5 percent at 4,035.77 (close)

Tokyo - Nikkei 225: DOWN 1.0 percent at 28,003.08 (close)

Hong Kong - Hang Seng Index: FLAT at 28,004.68 (close)

Shanghai - Composite: DOWN 0.7 percent at 3,539.30 (close)

Euro/dollar: DOWN at $1.1809 from $1.1812 at 2100 GMT Thursday

Pound/dollar: DOWN at $1.3765 from $1.3829

Euro/pound: UP at 85.77 from 85.42 pence

Dollar/yen: UP at 110.04 from 109.83 yen

Brent North Sea crude: UP 0.2 percent at $73.59 per barrel

West Texas Intermediate: UP 0.2 percent at $71.81 per barrel

Agence France-Presse

Japan Q1 GDP shrinks 1.3 percent, hit by virus restrictions

TOKYO - Japan's economy contracted 1.3 percent in the three months to March after the government reimposed virus restrictions in major cities as infections surged, data showed Tuesday.

The quarter-on-quarter fall came after the world's third-largest economy grew for two quarters to December, but the expansion was stopped in its tracks by a winter increase in coronavirus cases.

The government imposed new virus states of emergency in January in response, urging people to stay at home and calling for restaurants to close earlier.

The measures slowed consumption, hitting growth despite the relative strength of the manufacturing sector.

The 1.3 percent contraction was largely in line with economist expectations.

"Personal consumption has been particularly hard hit by the Covid-19 emergency measures," Naoya Oshikubo, senior economist at SuMi TRUST, said in an analysis issued before the release of the official data.

"On a positive note, private capital investment is expected to continue to pick up as the manufacturing industry as a whole remains strong," Oshikubo said.

Economists warn that the slowdown is likely to continue, with the government forced to impose a third state of emergency in several parts of the country -- including economic engines Tokyo and Osaka -- earlier this month.

The emergency measures are tougher than in the past, and have been extended to the end of May and expanded to several other regions in recent days.

Further complicating the growth picture is Japan's comparatively slow vaccine rollout, said Marcel Thieliant, senior Japan economist at Capital Economics.

"With the medical situation still worsening and the vaccine rollout too slow, it will take until the end of the year for output to return to pre-virus levels," he said in a note.

Agence France-Presse

Terraces of France’s cafes, restaurants, to open next month

PARIS (AP) — President Emmanuel Macron said Thursday that the outdoor terraces of France’s cafes and restaurants will be allowed to reopen on May 19 along with museums, cinemas, theaters and concert halls under certain conditions.

In an interview with regional newspapers, Macron outlined a four-step plan to reopen the country and revive its economy. The French government is slowly starting to lift partial lockdowns, despite still high numbers of coronavirus cases and hospitalized COVID-19 patients.

Reopening nurseries and primary schools this week was a priority, the president said.

“We have taken on the responsibility of the priority on education and the strategy of living with the virus, including with high numbers of infections, higher than those of our neighbors,” Macron said.

Students will go back to secondary and high schools next week, and a domestic travel ban will end, he confirmed. A 7 p.m. to 6 a.m. curfew will remain in place.

Restaurants and cafes will be able to serve customers outdoors at tables seating a maximum of six people starting May 19, when the nightly curfew will be pushed back to 9 p.m. Non-essential shops also reopen, as well as cultural sites and sport facilities, which will have occupancy limits of 800 people indoors and 1,000 outdoors.

French authorities are anticipating the COVID-19 outlook in the country to be better next month, when a greater proportion of the population will be vaccinated.

The government’s plan provides for permitting foreign tourists back into France on June 9 as long as they hold a “sanitary pass” with proof of a COVID-19 vaccine or a negative PCR test.

On that same day, cafes and restaurants will be allowed to resume regular service until an 11 p.m. curfew. Events of up to 5,000 people will be allowed.

The final stage of the plan will see the end of the nighttime curfew and the lifting of most restrictions on June 30, although nightclubs will remain closed.

France is reporting about 29,000 new confirmed cases each day, down from about 40,000 earlier this month. Over 5,800 COVID-19 patients are hospitalized in French intensive care units, a slight decrease from previous days. France has reported almost 104,000 virus-related deaths in the pandemic. COVID-19 deaths.

Associated Press

Google to invest over $7B in US, create 10,000 jobs – CEO

Washington, United States — Google will invest more than $7 billion in the United States this year and create thousands of jobs, the tech giant’s CEO said Thursday.

“We plan to invest over $7 billion in offices and data centers across the US and create at least 10,000 new full-time Google jobs in the US this year,” Sundar Pichai said in a statement.

Pichai said Google “wants to be a part” of America’s economic recovery from the pandemic and is investing in some communities that are new to the company, as well as expanding in others across 19 states.

The announcement comes as Google faces pressure from dozens of US states that accuse the internet giant of abusing its search dominance to eliminate competition.

Google will spend $1 billion in its home state of California.

Outside of the San Fransisco Bay Area, Google said it would add thousands of jobs in Atlanta, Washington DC, Chicago, and New York.

“This will help bring more jobs and investment to diverse communities as part of our previously announced racial equity commitments,” Pichai said.

Google’s parent company Alphabet last month reported a 50-percent jump in quarterly profit to $15.2 billion as its digital ad business thrived.

Agence France-Presse

Stocks move higher on Wall Street, following gains overseas

Stocks headed higher in midday trading on Wall Street Tuesday, adding to the market’s gains from a day earlier, as investors focused on the prospects for an economic recovery as more businesses reopen after being shut down due to the coronavirus pandemic.

The S&P 500 was up 1% and on pace for its third straight monthly gain. The rally follows solid gains in Europe, where indexes marched higher after some encouraging economic data. Bond yields rose slightly, another sign that investors were regaining confidence in the economy.

Technology sector stocks, which led the way higher as the market rebounded the past three months from a 34% plunge, helped power the latest gains. Banks, health care stocks and companies that rely on consumer spending were among the big gainers. Real estate and utilities stocks fell.


Encouraging economic data, including retail sales and hiring, have helped stoke optimism among investors that the reopening of businesses in the U.S. and other countries will pull the economy out of its recession relatively quickly. The market has continued to climb, despite bouts of volatility, even as a rise in new coronvairus cases in the U.S. and other countries clouds the prospects for an economic recovery.

Investors have grown confident that the Federal Reserve and Congress are prepared to continue providing a historic amount of support to the market and economy, said Sam Stovall, chief investment strategist at CFRA.

“All of the negative news has basically been built into share prices,” Stovall said. “If we are to stumble, then the Fed and Congress are likely to step in to put a fiscal and monetary floor underneath the economy and the markets. And now, with the likelihood that the economy will not be shutting down entirely should we end up with a second wave, the market is basically saying it’s ‘onward and upward.’”

The Dow Jones Industrial Average was up 230 points, or 0.9%, to 26,259. The Nasdaq composite, which is heavily weighted with technology stocks, gained 1.4%. The index has only fallen twice so far in June. Small company stocks were also notching solid gains. The Russell 2000 index was up 0.7%.

The yield on the 10-year Treasury note rose to 0.72% from 0.70% late Monday. It tends to move with investors’ expectations for the economy and inflation.

The World Health Organization said over the weekend that the pandemic is still in its ascendancy. The U.S., which is seeing rapid increases in cases across the South and West, has the most infections and deaths by far in the world, with 2.3 million cases and over 120,000 confirmed virus-related deaths, according to a tally by Johns Hopkins University.

Still, investors have been placing more weight on economic data releases that suggest economies that have reopened are making strides to emerge from a deep recession.

On Tuesday, the Commerce Department said sales of new U.S. homes jumped 16.6% in May to an annual rate of 676,000, exceeding Wall Street’s forecasts. Several homebuilders rose. Century Communities was up 1.8%.

Further updates on the U.S. economy are expected toward the end of this week, when the government will issue data on consumer spending, weekly unemployment aid applications and durable goods orders.

European shares advanced after a measure of economic activity in the eurozone, the purchasing managers’ index, rose significantly in June from the month before. The index was just shy of the level that indicates the economy is growing again after a devastating plunge in the spring.

France’s CAC 40 gained 1.4%, while Germany’s DAX rallied 2.1%. Britain’s FTSE 100 rose 1.2%.

Asian markets overcame some early turbulence caused by reported comments by White House trade adviser Peter Navarro suggesting the U.S. trade deal with China was in trouble. President Donald Trump later said the agreement was still on.

Benchmark U.S. crude oil was up 0.1% to $40.77 a barrel. Brent crude, the international standard, was up 0.5% to $43.28 per barrel.

The Associated Press

South Korea leads virus success in Asia as drug trial raises hope

South Korea, once one of the hardest-hit countries in the coronavirus pandemic, reported no new cases on Thursday, boosting hopes of an eventual return to normality as US scientists hailed the results of a major drug trial.

The good medical news caused equities to rally, despite mounting deaths worldwide and abysmal economic figures caused by the COVID-19 crisis.

Data showed the pandemic, which has killed more than 224,000 people, has plunged the United States into its worst economic slump in a decade, and has left Germany expecting its biggest recession since the aftermath of World War II.

But for the first time since the new disease was detected there in mid-February, South Korea reported zero new infections.

The East Asian nation had the world's second-largest coronavirus outbreak for a period after the virus emerged in China late last year.

But with an aggressive test-and-trace strategy and widespread social distancing, it has managed to bring the spread of the pathogen under control.

"This is the strength of South Korea and its people," said President Moon Jae-in as he announced the milestone.

Meanwhile in the first proof of successful treatment, a clinical trial of the drug remdesivir showed that patients recovered about 30 percent faster than those on a placebo.

"The data shows that remdesivir has a clear-cut, significant, positive effect in diminishing the time to recovery," said Anthony Fauci, the top US epidemiologist.

- Hope in Asia -

South Korea's virus death toll is around 250 -- vastly lower than that of Italy, Britain, Spain and France, which have each recorded more than 24,000 fatalities, and the United States, topping the table with a third of global deaths.

Other parts of the region have seen similar success in their fight against the virus.

Infections have dwindled in China after it imposed extremely strict lockdown measures on millions of people earlier this year. Its official toll is around 4,600, although doubt has been cast on the figures' accuracy.

Hong Kong, a city of seven million where there have been just four virus deaths, reported no new cases for the fifth straight day on Thursday.

And New Zealand has declared the battle won against widespread, undetected community transmission.

However the economic costs are beginning to mount, raising fears of an era-defining global crash and increasing pressure worldwide to ease lockdowns despite fears of a second wave of contagion.

- Recession warning -

The US announced that economic output collapsed 4.8 percent in the first quarter -- ending more than a decade of expansion.

On Thursday, France and Spain both said their economies had fared even worse, contracting 5.8 percent and 5.2 percent respectively, while the Eurozone economy as a whole also shrank.

Federal Reserve chairman Jerome Powell warned worse was to come, and economic activity will likely drop "at an unprecedented rate" in the second quarter.

Germany, Europe's largest economy, has succeeded in holding off the devastating death tolls seen elsewhere, but is still bracing for an overwhelming economic hit.

Germany "will experience the worst recession in the history of the federal republic" founded in 1949, Economy Minister Peter Altmaier warned, predicting that GDP would shrink by a record 6.3 percent.

The International Labour Organization said half the global workforce -- around 1.6 billion people -- are in "immediate danger of having their livelihoods destroyed".

One of the worst-hit sectors is the aviation industry, but an unprecedented drop in demand for fossil fuels means global energy emissions are expected to fall a record eight percent this year, the International Energy Agency said.

- Drug trial -

Experts have warned that only a vaccine will allow the full removal of restrictions that this year put half of humanity under some form of lockdown.

But there have been encouraging signs in the search for a treatment.

Fauci likened remdesivir to the first retrovirals that worked, albeit with modest success, against HIV in the 1980s.

The drug failed in trials against the Ebola virus, and a smaller study, released last week by the WHO, found limited effects among patients in the central Chinese city of Wuhan, the disease's original epicentre.

Senior WHO official Michael Ryan declined to weigh in on the latest findings, saying he had not reviewed the complete study.

"We are all hoping -- fervently hoping -- that one or more of the treatments currently under observation and under trial will result in altering clinical outcomes" and reducing deaths, he said.

While the world keeps looking for signs of progress against the pandemic, research is also revealing frightening new details about COVID-19.

Britain and France have both warned of a possible coronavirus-related syndrome emerging in children -- including abdominal pain and inflammation around the heart.

"I am taking this very seriously. We have absolutely no medical explanation at this stage," French Health Minister Olivier Veran said.

Experts have also warned of longer-term psychological tolls on both children and adults after weeks or even months in isolation.

burs-kaf/hg/axn

Agence France-Presse

Asia-Pacific economies face $211-billion hit from virus, says S&P

HONG KONG — The coronavirus could wipe more than $200 billion off Asia Pacific economies this year, S&P Global ratings warned Friday, sending growth to its lowest level in more than a decade, as governments struggle to combat the disease.

In a worst-case scenario, China could see growth of less than three percent, while Japan, Australia and Hong Kong could "flirt with recession", it said in a report.

Fears about the impact of the outbreak, which has spread to at least 85 countries since it began in China in late December, have hammered world markets as investors fret over its economic impact.

S&P said it expected the region to grow 4.0 percent this year as supply and demand shocks blow a $211 billion hole in the economy. That compares with a 4.8 percent estimate given in December and would be the worst performance since a contraction in 2008 caused by the global financial crisis.

"Asia-Pacific's outlook has darkened due to the global spread of the coronavirus," it said. "This will exert domestic supply-and-demand shocks in Japan and Korea. It will mean weaker external demand from the US and Europe"


The report said economies were suffering from the double-whammy of weak demand as consumers stay home for fear of catching the disease, and falling supplies as industries are rocked by shutdowns.

It saw China's economy -- which was already stuttering before the crisis struck -- expanding 4.8 percent this year, which would be the worst in three decades.

However, it added that in the worst case, which "assumes localized reinfections as people return to work and the re-imposition of some restrictions on activity" growth could crash to just 2.9 percent.

Hong Kong, which suffered its first recession last year since 2008, was tipped to shrink further.

The city, along with Singapore, Thailand, and Vietnam would be the hardest hit, with tourism -- which has been battered globally -- accounting for around 10 percent of growth on average.

Still, S&P did say that economies would likely see healthy rebounds.

"A U-shaped recovery is likely to be delayed until the third quarter if signs emerge by the second quarter that the virus is globally contained," the report said.

"We assume that the coronavirus will not permanently impair the labour force, the capital stock, or productivity -- hence, the region's economies should be employing as many people and producing as much output by the end of 2021 as it would have done in the absence of the virus."

Also on Friday, the Asian Development Bank said it saw China taking a $103 billion hit, or 0.8 percentage point hit to GDP, while losses could hit $22 billion -- or 0.2 percentage points -- for other developing economies in the region.

"The magnitude of the economic losses will depend on how the outbreak evolves, which remains highly uncertain," the bank said in a statement.

Agence France-Presse

Market may climb anew this week

MANILA, Philippines — The stock market may continue to go up this week, sustaining the gains the previous weeks amid the scheduled resumption of US-China trade talks, traders said.

Michael Ricafort, chief economist at Yuchengco-owned Rizal Commercial Banking Corp. (RCBC), sees the index’s next resistance at the 8,000 mark.

“The Philippine Stock Exchange Composite index (PSEi) gained for the third week in four weeks by 58.85 points or 0.7 percent to close at 7,992.32, a new one-month high and also among four-month highs and also among 17-month highs,” Ricafort said.


This, he said, is amid improved global risk appetite recently with the scheduled resumption of the trade talks between the US and China by early October and recent gestures by both countries to improve the said trade talks.

“The next resistance is at 8,000, which is a gateway prior to further upside potential in the near future,” Ricafort said.


Earlier, US President Trump deferred by two weeks the scheduled higher tariffs (which would translate to additional five percent duties) on $250 billion US imports from China. Trump deferred this to Oct. 15 from Oct. 1 to improve the US-China trade talks.

Ricafort said this was a positive signal for the global financial markets.

China also agreed to exempt some US imports from tariffs for about a year starting Sept. 17, which Ricafort said was another positive signal for the markets.

“Trump administration plans to ease sanctions on Iran to help secure a meeting with Iranian leader Hassan Rouhani on the sidelines of the UN General Assembly in New York on Sept. 23. The markets are also anticipating the upcoming Fed rate-setting meeting on Sept. 18 amid possible 0.25 rate cut, which is another factor that could support sentiment in the global financial markets in the coming week,” Ricafort said.

source: philstar.com

Asian equities mostly up after US, China tariff moves

HONG KONG, China — Asian investors on Thursday cheered Donald Trump's decision to delay a hike in tariffs on Chinese goods and Beijing's announcement that it would remove a range of US products from its own planned levies.

The moves signal an easing of tensions between the two economic superpowers ahead of a much-anticipated meeting of top-level negotiators next month.

They also provided an extra shot in the arm for investors as they await key announcements from the US and European central banks that are expected to see a further easing of monetary policy.


In a tweet on Wednesday night, Trump said: "We have agreed, as a gesture of good will, to move the increased Tariffs on 250 Billion Dollars worth of goods (25% to 30%), from October 1st to October 15th."

He added that the delay was requested by "Vice Premier of China, Liu He, and due to the fact that the People's Republic of China will be celebrating their 70th Anniversary", on October 1.

Earlier in the day, China said it would temporarily exempt 16 categories of US exports from tariff increases in an olive branch to Washington before the talks take place and which Trump described as "a big move".

The more conciliatory tone from both sides -- after months of rancour -- fuelled hopes they can edge towards a solution to their long-running trade war, which has jolted the global economy and stock markets.

The delay "shows Trump doesn't want to increase tariffs before the trade talks in early October and it creates good conditions", said Tommy Xie, an economist at Oversea-Chinese Banking Corp. "It adds to the hope that there'll be good news from the October meeting, and markets will wait and see."

Wednesday's developments were broadly welcomed though Asian markets struggled to hold on to initial rallies owing to profit-taking from a healthy run-up this week.

Central banks in focus

Tokyo ended the morning 0.8 percent higher and Shanghai added 0.2 percent while Sydney climbed 0.5 percent. Wellington and Taipei also rose, as did Jakarta, but Hong Kong dipped 0.2 percent.

Jun Inoue, a senior economist at Mizuho Research Institute, said Trump's move indicates he "can be flexible to get concessions from China and that he’s not trying to punish Beijing at any cost".

The apparent easing of trade tensions boosted oil prices as the prospect of an end to the row revived hopes for demand.

However, the gains followed a sharp drop for both main contracts as traders bet on a possible return of Iranian crude to the market after the firing of Trump's hawkish national security adviser John Bolton eased fears of a conflagration in the Middle East.

Traders are now turning their attention to Frankfurt, where the European Central Bank is expected to unveil economy-boosting stimulus. While the exact measures are unknown observers say it could cut interest rates deeper into negative territory or a new mass bond-buying drive, among other things.

Then, next week the Federal Reserve meets, with speculation rife that it will lower borrowing costs again, which would please Trump, who in a Twitter outburst on Wednesday said they should "BE BROUGHT WAY DOWN".

In share trading, Hong Kong Exchanges and Clearing sank more than three percent after its shock bid of almost US$40 billion for the London Stock Exchange Group on Wednesday.

Reports said the proposal is likely to fail, however, as it is dependent on the LSEG scrapping a planned $27 billion takeover of US financial data provider Refinitiv, which the three-centuries-old exchange said it "remains committed" to buying.

There are also concerns about ongoing unrest in Hong Kong and the influence of China in the group, the Financial Times reported.

source: philstar.com

G20 frets over global economy amid US-China trade war

FUKOUKA, Japan —The world's top finance policymakers Sunday weighed the impact of ballooning trade tensions on the global economy amid differences over the extent to which they are dragging on growth.

Finance ministers and central bank chiefs from the G20 group of the world's top economies are expected to note the "downside risks" to the global economy from trade battles, notably between the top economic superpowers China and the US.

Japanese Finance Minister Taro Aso, who is hosting the talks, told reporters as the first day of talks wrapped up on Saturday that the world economy should "firm" in the second half of the year but "downside risks still remain."

Aso said "market confidence could be eroded" if there were no rapid resolution to the ongoing trade war between Beijing and Washington, which has seen the world's top two economies impose billions of dollars of tit-fir-tat tariffs and threaten even tougher action.

IMF chief Christine Lagarde singled out trade tensions as the "major" headwind facing the global economy, adding that it was a "significant risk on the horizon," in an interview with Japan's Nikkei daily on Sunday.

Lagarde has previously described the trade wars as a "self-inflicted wound" and warned that US-China tariffs so far imposed and threatened could trim 0.5 percentage points off global GDP growth next year -- an amount $455 billion larger than the entire South African economy.

Meanwhile, French Finance Minister Bruno Le Maire said there was a "real risk" that "this global economic slowdown could turn into a global economic crisis due to trade tensions."

"A worsening of the international climate and a real trade war would lead to an even more marked slowdown in global growth, with a direct impact on our jobs, companies, factories and sectors," Le Maire told AFP in an interview on the sidelines of the meeting.

A Japanese official who declined to be named briefed reporters that "very many countries voiced concerns that escalation of the trade friction is a very significant downside risk to the world economy. That is a fact."

'Big economic opportunity' 

However, the treasury secretary from the US, which continues to threaten more tariffs on China if there is no trade deal, played down the risk of a global economic conflagration.

"Clearly there is a slowdown in Europe, there's a slowdown in China, there's a slowdown in other parts. I don't believe that's as a result of trade tensions. That slowdown has gone on for the last year," Steven Mnuchin told reporters on Saturday.

He acknowledged that other policymakers had voiced concerns over the economic impact of a prolonged trade war but pointed to a potential boon for other countries.

As companies move out of China in order to avoid US tariffs, "there's going to be a big economic opportunity for a lot of other countries," he said.

"There will be winners and losers," he predicted.

Nevertheless, Mnuchin also pointed to the positive boost to the world economy that could result from a breakthrough in trade talks, likely to be the main focus of a meeting between the US and Chinese leaders at a G20 summit later this month.

"I think if we get a deal, it's a very positive thing for economic growth, for us, for China, for Europe, for the rest of the world. The opening of these economies tends to lead, in my mind, to more growth on both sides," said Mnuchin.

source: philstar.com

Index ends lower on weak GDP growth, US-China trade woes

MANILA, Philippines — The index ended the week in negative zone, finishing 13.42 points lower at 7,742.20.

Likewise, the broader All Shares gauge was down 16.59 points or 0.34 percent to end at 4,791.26.

Majority of the indices were down as well except for the financials and industrial gauges which ended in positive territory.

Total value turnover reached P7.551 billion. Market breadth was negative, 101 to 78 while 64 issues were unchanged.

Traders said the market is still digesting the lower-than-expected first quarter economic growth of 5.6 percent as well as the lack of resolution on the brewing US-China trade war.


Some specific issues, however, bucked the trend such as Holcim Philippines whose shares reached a new high of P15.30 or up 6.10 percent.

This after San Miguel Corp., Holcim Philippines and Lafarge Holcim confirmed the acquisition by San Miguel of Holcim Philippines.

Lafarge Holcim, Europe’s biggest cement maker, sold its 85.7 percent stake in the company.

Lafarge Holcim CEO Jan Jenish said the sale of the company’s stake in Holcim Philippines now completes the cement giant’s exit from Southeast Asia.

“With the divestment of our activities in the Philippines, we are completing our exit from the increasingly hyper competitive arena in South East Asia. While this decision is based on our strategic portfolio review, we have reached very attractive valuations allowing us to achieve a new level of financial strength,” Jenish said.

On the other hand, SMC’s shares dropped 2.81 percent.

source: philstar.com

Market may trade sideways this week

MANILA, Philippines — The stock market this week may be characterised by follow through buying on Chinese New Year ahead of the release of the January inflation numbers, according to First Metro Investment Corp. vice president Cristina Ulang.

Ulang said investors would closely monitor the corporate earnings report, noting that outperformance versus estimates would hold the key to sustained foreign buying.

Christopher Mangun, head of Eagle Equities, said that there may be lower trading volumes this week.


“This week is the first trading week of February and with only four days of trading we are going to see lower trading volumes as the holiday is in the middle of week and investors may take a break from trading and take the week off,” he said

Thus, he said the market may continue to trade sideways between 8,000 and 8,200.

“The index may end the week lower, but the key is for it to stay above the 8,000 level. If we continue to see heavy foreign inflows, then the market may sustain its current momentum. Local investors have started taking some risk off the table and currently foreign money is supporting the market. With earnings reports set to start coming in this week on top of better inflation numbers for January, we may see the market factor this is and maintain its current trajectory,” he said.

Last week, the market was pulled up by rosy western equities markets which rose after dovish comments from the US Fed.

The main index ended the week 90.96 points higher or 1.13 percent to close at 8,144.16.

In the first three days of trading, there was a pullback, even touching the 7,900 support level.

However, in the last two trading days there was already  a complete reversal, eventually breaking above 8,100 in the afternoon trading session on Friday, Mangun said.

Foreign money flooded the market with net foreign buying at P5.74 billion.

In all, the PSEi ends the month of January 7.3 percent higher which is the market’s best performance since March 2016.

source: philstar.com

Japan inflation edges up but way below target in August

TOKYO — Prices in Japan edged up modestly in August, according to government data on Friday, as the world's third-largest economy continues its years-long battle with deflation.

Inflation stood at 0.9 percent year-on-year in August, still far below the Bank of Japan's two-percent target, even though slightly higher than 0.8 percent in July and June and 0.7 percent in May.

The latest figure was in line with market consensus.

With fresh food and energy stripped out, prices rose by even less -- just 0.4 percent year-on-year in August, the internal affairs ministry said.

Japan has battled deflation for many years and the central bank's ultra-loose monetary policy appears to be having limited impact.

The Bank of Japan will not raise interest rates "for an extended period of time", its chief said after the latest rate-setting meeting, even as US and European peers tighten monetary policy.

Deflation is bad for the economy partly because the expectation of falling prices discourages spending and dampens growth.

The latest data come a day after Prime Minister Shinzo Abe won comfortable re-election as leader of his ruling party, setting him on course to become Japan's longest-serving premier.

During the election campaign for the vote, Abe said he wanted the economy to strengthen enough to allow the central bank to wind up the current super-loose monetary policy "by the end of" his new three-year term.

Analysts say Abe's re-election means that the government will take active fiscal measures to boost the still-fragile economy along with the central bank.

source: philstar.com

Asian stocks mixed as investors await US tariff hike

BEIJING — Asian stocks were mixed Tuesday after Wall Street's gains as investors waited for a new U.S. tariff hike in a trade battle with China.

KEEPING SCORE: The Shanghai Composite Index lost 0.3 percent to 2,661.33, while Tokyo's Nikkei 225 added 1 percent to 22,595.52. Hong Kong's Hang Seng retreated 0.3 percent to 26,538.58 and Sydney's S&P-ASX 200 advanced 0.5 percent to 6,171.00. Seoul's Kospi shed 0.3 percent to 2,281.90, while New Zealand. Benchmarks in Taiwan and Southeast Asia declined.

WALL STREET: U.S. stocks broke a four-day losing streak as industrial companies and retailers rose. Technology companies recovered some of last week's losses. Nike, Home Depot and Walmart all climbed. Microsoft and other technology companies rose, but Apple fell after saying more U.S. tariff hikes could push it to raise prices. The Standard & Poor's 500 index gained 0.2 percent to 2,877.13. The Dow Jones Industrial Average lost 0.2 percent to 25,857.07. The Nasdaq composite rose 0.3 percent to 7,924.16.



TRADE TENSIONS: The Trump administration is due to announce a decision shortly on whether to go ahead with 25 percent tariffs on $200 billion of Chinese imports in a dispute over Beijing's technology policy. The two sides already have raised duties on $50 billion of each other's goods. Trump said Friday that he was considering extending penalties to extending penalties to nearly all Chinese imports to the United States by raising duties on an additional $267 billion of goods.

ANALYST'S TAKE: "Wall Street balanced the tech gloom against the fresh focus on tax cuts on Monday yielding mixed returns," Jinyi Pan of IG said in a report. "The protracted expectation for more bad news to set in with the looming tariffs remains the most important factor weighing on markets currently."

ENERGY: Benchmark U.S. crude gained 4 cents to $67.58 per barrel in electronic trading on the New York Mercantile Exchange. The contract lost 21 cents on Monday to close at $67.54. Brent crude, used to price international oils, advanced 11 cents to $77.48 in London. It rose 54 cents the previous session to $77.37.

CURRENCY: The dollar gained to 111.36 yen from Monday's 111.12 yen. The euro edged down to $1.1590 from $1.1595.

source: philstar.com