Free Trial

MNI European Open: No Respite For DXY Sell-Off As Gold Clears All-Time Highs





Fig. 1: Spot Gold/Silver

Source: MNI - Market News/Bloomberg


CORONAVIRUS: Boris Johnson has admitted the government did not understand coronavirus during the "first few weeks and months" of the UK outbreak. The PM told BBC political editor Laura Kuenssberg there were "very open questions" about whether the lockdown had started too late. Mr Johnson also spoke of "lessons to be learned" and said ministers could have done some things "differently". Labour accused the government of "mishandling" the crisis. (BBC)

CORONAVIRUS: Boris Johnson's hopes of getting people to return to work from 1 August are in serious doubt as the UK's biggest civil service union warns of "serious industrial unrest" if public servants across the country are pushed to return to their offices too early. The Public and Commercial Services Union (PCS), which has 200,000 members, has reacted furiously after being told at a private meeting in Downing Street on Thursday that the Cabinet Office's permanent secretary, Alex Chisholm, has written to all Whitehall departments, asking them to report back on how they could get more people to return as early as next month. (Observer)

CORONAVIRUS: The foreign secretary has defended the "swift decision" to require travellers arriving in the UK from Spain to quarantine for 14 days. Dominic Raab said he knows it will cause disruption for holidaymakers but the government "can't make apologies". Labour's Jonathan Ashworth called the handling of the move "shambolic". The new coronavirus travel rule was announced on Saturday following a spike in the number of new cases in Spain this week. Mr Raab told Sky News' Sophy Ridge the government "took the decision as swiftly as we could" - receiving data on Friday and assessing it on Saturday afternoon. Asked why holidaymakers were not told earlier that Spain was under assessment, he said giving "vague advice" would "create more uncertainty". "There is a cut-off with changes in rules and advice we give, so I appreciate that that's difficult and it can be disruptive," he said. "But it would be far worse to either muddy the waters or to hold back and delay from taking the measures when we need to take them." (BBC)

CORONAVIRUS: Fears are growing that countries like France and Germany could join Spain on the UK's quarantine list, as the Government warned it would take similar quick decisions in response to Covid-19 spikes. (Telegraph)

CORONAVIRUS: The government has announced travel corridors for five more countries, meaning they will be exempt from the coronavirus quarantine. From Tuesday, people returning to England from Estonia, Latvia, Slovakia, Slovenia and St Vincent and the Grenadines will no longer need to self-isolate for 14 days. More than 70 countries and territories were included in the first wave of travel corridors, which came into effect earlier this month. (Sky)

CORONAVIRUS: A fresh row broke out over face masks on Sunday night as teaching unions urged ministers to consider making them mandatory for children in all secondary schools. (Telegraph)

BREXIT: Comments will be a blow to No 10, which had hoped Merkel would help break deadlock Angela Merkel's government has called for more realism from the UK in the ongoing trade and security talks, after the EU capitals were given a "sobering" update by Michel Barnier following the recent round of Brexit negotiations. After a presentation by the EU's chief negotiator to ambassadors from the 27 member states on Friday, a spokesman for the German government, which holds the rolling EU presidency, said the bloc was ready to move negotiations quickly forward but "expressed the need for more realism in London". The comments will be a blow to Downing Street, where it had been hoped the resolution of the EU's internal budget and recovery fund debate would allow Merkel and the other leaders to intervene and unblock the negotiation following a month of little progress. "With the [budget] now wrapped up we hope member states will become more engaged in this process in Brussels and get them moving forward politically in a helpful way," a UK source close to the negotiations said. (Guardian)

BREXIT: Trade groups have warned over a crippling shortage of customs agents as they brace for a deluge of Brexit paperwork from January. Duncan Buchanan of the Road Haulage Association warned there was no longer time to train agents to the right standard – potentially sparking chaos at the borders. Ministers said earlier this year that about 50,000 more private sector staff would be needed to meet customs demand when Britain left the single market, although this could be lower if a trade deal was struck. Mr Buchanan said: "Those people need to be in a position to do the data entry, but everything we're hearing from HMRC is adding to the bureaucracy. It's a serious problem." (Telegraph)

FISCAL: Rishi Sunak is considering a new tax on goods sold online amid mounting concern about the collapse of the high street as Britain emerges from the coronavirus crisis. The chancellor is examining proposals for an online sales tax to provide a "sustainable and meaningful revenue source for the government" and help bricks-and-mortar retailers to compete. In a call for evidence published last week, the Treasury highlighted concerns that business rates were effectively penalising the high street because online rivals did not need to rent "high-value" properties. It said that the coronavirus crisis "has had a significant impact on how business is done" and that the government must act to make sure that "the tax system raises sufficient revenue". The Treasury is also considering radical plans to abolish business rates and replace them with a "capital values tax" based on the value of land and the buildings on it. The tax would be paid by the owner of the property rather than the business leasing it. The government is understood to be considering two forms of online sales tax. The first would be a levy of around 2 per cent on goods sold online, which would raise about £2 billion a year. (The Times)

FISCAL: Boris Johnson and Rishi Sunak, the Chancellor, are to ditch decades of Treasury orthodoxy, prioritising public spending on projects that will "move quickly, start small and fail fast". (Telegraph)

FISCAL: Everyone over 40 would start contributing towards the cost of care in later life under radical plans being studied by ministers to finally end the crisis in social care, the Guardian can reveal. Under the plan over-40s would have to pay more in tax or national insurance, or be compelled to insure themselves against hefty bills for care when they are older. The money raised would then be used to pay for the help that frail elderly people need with washing, dressing and other activities if still at home, or to cover their stay in a care home. (Guardian)

FISCAL: Entrepreneurs and small business owners are thinking of selling up earlier than they had planned — and in some cases, it is claimed, of even leaving the country — because of worries over possible tax changes. Rishi Sunak is considering an overhaul of capital gains tax as he tries to find ways to balance the books in the wake of the coronavirus pandemic. (The Times)

FISCAL: The Treasury is in talks with the UK's largest banks about an industry-wide plan to help tackle the tens of billions of pounds of bad debts expected under the government's light-touch coronavirus "bounce back" loans scheme. More than 1m of the UK's smallest companies have borrowed £33bn in just two months under the bounce back loan scheme (BBLS), which offers state-guaranteed, six-year facilities of up to £50,000 with only minimal checks on the borrower's ability to repay. The scheme was designed by the Treasury to allow banks to lend quickly to businesses struggling to survive lockdown, but bankers and officials predict many loans will never be repaid. (FT)

FISCAL: Taxpayers are in line for a bill of up to £30bn to make the railways greener, according to a leaked Network Rail report. The document urges Grant Shapps, the Transport Secretary, to take action immediately or risk missing the Government's 2050 net zero carbon goal. The 231-page analysis by state-backed tracks and stations owner, seen by The Sunday Telegraph, shines a light on how Britain's railways have failed to keep pace with electrification overseas. (Telegraph)

FISCAL: Transport for London is set to ask the Government for a second bailout after the pandemic pushed its funding shortfall to £6.4bn. The network will need total funding of £3.5bn from the taxpayer for the current financial year, according to a revised budget released on Friday – an increase of £300m from previous estimates. The sluggish return of passengers means it will also require an additional £2.9bn for the financial year 2021-22, TfL said. (Telegraph)

FISCAL: Britain's biggest steel producer is encouraging the government to take a big stake in the company as part of a plan to preserve the long-term future of the vast Port Talbot steelworks in south Wales. Sky News has learnt that Tata Steel has presented proposals to Whitehall in recent weeks aimed at securing a state injection of close to £1bn into its UK operations. (Sky)

ECONOMY: The second quarter saw UK consumer confidence climb just one percentage point, to minus 17 per cent, from a record low in the first quarter, a survey by Deloitte published on Monday shows. While sentiment around the state of the British economy fell a further 17 percentage points from the previous quarter, to minus 88 per cent, consumers hinted at a third-quarter bounceback with a net intent to spend rising across every discretionary category. The Deloitte Consumer Tracker, which measures UK consumer confidence quarterly, saw UK consumers in a "cautious but slightly more positive mood", following a record decline in consumer confidence in the first quarter of the year. (FT)

ECONOMY: The economy will not get back to pre-pandemic levels until 2024 as hopes of a V-shaped recovery evaporate, the EY Item Club has warned. The forecasting body expects a record recession as the economy contracts by 11.5% this year, almost as severe as the Office for Budget Responsibility's central scenario, followed by a slow rebound. Unemployment will more than double, it says, from 3.9% to 9%, leaving roughly three million people out of work as the furlough scheme ends. The EY Item Club has downgraded its outlook since June. The recession will be deeper and recovery to pre-Covid-19 levels will take 18 months longer as weak consumer confidence holds growth back, it believes. Its forecast is for the recovery to take longer than the OBR expects, but for employment to be less affected. (The Times)

ECONOMY: Almost a quarter of small UK businesses have cut jobs in the past few months despite the government's furlough scheme that has helped pay the wages of more than 9m workers. Larger companies have unleashed a savage round of job cuts in recent weeks, with hundreds of employees losing their jobs at household names such as Marks & Spencer, John Lewis and Dyson. However, many of the new jobs predicted in the next year were expected in smaller businesses that are struggling to survive the economic impact of the pandemic. According to a report by the Federation of Small Businesses (FSB), almost a quarter — 23 per cent — of companies said they had already reduced staff numbers in the last quarter — a record high for the survey. Those increasing numbers were at an all-time low of 4 per cent. (FT)

ECONOMY: Thousands of hotel jobs are at risk as chains including Marriott and Millennium scramble to cut costs amid the fallout from the Covid-19 pandemic.Hotels have been hammered by flight bans and the collapse in business travel, leaving them struggling to fill rooms. Nor can they host weddings and conferences because of limits on public gatherings.Kate Nicholls, chief executive of lobby group UK Hospitality, said hotels in the luxury sector and conferencing and banqueting were particularly badly hit, with 20% of jobs at large chains at risk.About 1,000 jobs are vulnerable at Marriott hotels, which is consulting over redundancy at the 60 it manages in Britain, and its offices. Millennium, owned by Singaporean tycoon Kwek Leng Beng, has also started a redundancy consultation with staff. And hundreds of jobs are at risk at InterContinental Hotels Group (IHG), owner of Holiday Inn, and Hilton, which has announced 2,100 cuts globally. (Sunday Times)

POLITICS: Meanwhile, the poll found that the Tory lead over Labour had halved this week, from 8 points to 4 points. The Conservatives slipped two points to 42%, while Labour increased two points to 38%. The Lib Dems (6%) and Greens (4%) remain unchanged on last week. The government's net approval rating for the handling of the pandemic worsened and has now dropped to a net approval of -15. Disapproval rose from 43% last week to 46% this week, while approval has fallen from 38% last week to 32% this week. Boris Johnson's approval rating remains in negative figures, with 36% approving and 45% disapproving of his performance. His net rating had dropped from -4 last week to -8 this week. Opinium polled 2,002 people online from 23-24 July. (Observer)

FUNDS: Senior UK investment industry figures including Standard Life Aberdeen chief executive Keith Skeoch have thrown their weight behind the idea of a new regulatory framework for funds post-Brexit in an ambitious attempt to make the £9tn industry more global. Mr Skeoch, who also serves as chair of the Investment Association, the mouthpiece for British fund managers, said that Brexit provided the chance to overhaul the UK's investment fund framework with the aim of attracting new pools of clients. "There is a real opportunity to have a competitive funds regime that we could export particularly to Asia or those countries where we're able to do trade deals," he said. Most UK retail funds are regulated under the EU framework known as Ucits, a sprawling set of rules established 35 years ago and which governs funds with a total €9.4tn under management. But once the UK's Brexit transition period ends on December 31, the UK will have the freedom to diverge from Ucits. (FT)

EQUITIES: Britain's big banks are set to reveal a £14 billion hit from the Covid-19 crisis. City analysts have forecast that HSBC, Barclays, Lloyds Banking Group, Natwest Group — the new name for Royal Bank of Scotland — and Standard Chartered will be forced to book billions of pounds of impairment charges against their loan book when they post results for the first half of 2020 in the next two weeks. HSBC may report bad debts of about $5.8 billion, Barclays £3.5 billion, Lloyds £2.8 billion, Natwest £1.8 billion and Standard Chartered $1.9 billion, according to analysts. The results start with Barclays on Wednesday, which is expected to report a small profit, helped by high trading levels at its investment bank thanks to market volatility. (The Times)


EU: Celebrations over the EU's €750bn Recovery Fund have been rudely interrupted. Italy is already warning that the money will not come soon enough to avert an autumn liquidity squeeze. (Telegraph)

ECB/EU: A decision by European leaders to issue joint debt to finance coronavirus aid for weaker member states should remain an exemption and not serve as a blueprint for future budget challenges, Bundesbank President Jens Weidmann said on Sunday. European Union leaders on Tuesday clinched an historic deal on a massive stimulus plan for their coronavirus-throttled economies following a fractious summit lasting almost five days. The agreement paves the way for the European Commission, the EU's executive, to raise up to 750 billions euros on capital markets on behalf of all 27 states, an unprecedented act of solidarity in almost seven decades of integration. (RTRS)

ECB: Most EU banks are strong enough to survive the impact of the coronavirus, ECB Vice President Luis de Guindos said in an interview with El Independiente. Bank profits should not be used to pay dividends, but to support lending, he said. (BBG)

GERMANY: Germany may introduce compulsory coronavirus testing for holidaymakers returning from high-risk destinations after the number of new infections in the country hit a two-month high, the health minister said on Saturday. Health Minister Jens Spahn told Deutschlandfunk radio the government wanted to do everything possible to stem the spread of the virus while also respecting people's basic rights. (RTRS)

GERMANY: Germany's Christian Social Union party expects the decision to choose a candidate to succeed Chancellor Angela Merkel will be delayed because of the coronavirus crisis, CSU's General Secretary Markus Blume said Sunday in an interview in Welt am Sonntag. The decision was initially planned for January after party conferences by CSU and its coalition partner the CDU due to be held in December. "At a much later time we will decide on the line-up with which we are going to campaign for" parliament, Blume said in the interview. "Corona is not over, we will be going through a difficult autumn and winter." (BBG)

FRANCE: French health authorities are making COVID-19 tests available free of charge without prescription as they closely monitor an uptick in infections after the lifting of lockdown measures. PCR nasal swab tests, which detect COVID-19 infections caused by the novel coronavirus, will be freely available on demand under government orders published on Saturday. "We wouldn't describe this as a second wave, but what's clear is that for several days now we have seen a noticeable increase in the number of confirmed cases, which had been in decline for 13 weeks," Health Minister Olivier Veran said in an interview published in Le Parisien's Sunday edition. (RTRS)

FRANCE: France will dedicate 30 billion euros ($35 billion) in stimulus spending for environmental projects, Finance Minister Bruno Le Maire was quoted as telling Journal du Dimanche. Among the plans are an increase in credits to make homes more energy-efficient, increasing the use of rail freight, extending bike-lane networks and supporting electric and plug-in hybrid vehicles, Le Maire said in an interview with the newspaper. (BBG)

ITALY/BTPS: Italy plans to sell 7 billion euros ($8.1 billion) of bills due Jan 29, 2021 in an auction on Jul 29. (BBG)

SPAIN: Spain is taking new measures to cut a spike in coronavirus cases, amid fears of a more widespread "second wave". Catalonia has closed its nightlife for two weeks but cities outside the north-eastern region are also seeing a surge. (BBC)

SPAIN: Spain is a safe country and is making great efforts to contain new coronavirus outbreaks, Foreign Minister Arancha Gonzalez Laya says in statement. Country's three main outbreaks are under control and Spanish government is working with European peers to explain situation, Sanchez says in statement sent by Prime Minister's office. Government is also working with U.K. counterpart so that the Balearic and Canary islands aren't affected by British quarantine orders. (BBG)

GREECE: Greece's gross domestic product is expected to decline by 11.7% this year before the economy rebounds and expands by 5% in both 2021 and 2022, the International Monetary Fund's Managing Director Kristalina Georgieva said in an interview with Kathimerini newspaper. Greece is expected to be one of the euro-area countries "that will be hit hard by the pandemic, due to its dependence on tourism and shipping, which are sectors that have been particularly affected by the crisis," Georgieva said. She praised the Greek authorities and people for the way they handled Covid-19 crisis. (BBG)

BELGIUM: Belgian authorities will consider imposing more measures to contain fresh outbreaks of the coronavirus, as the prime minister said imposing a nationwide lockdown again would be a measure of last resort. Premier Sophie Wilmes brought forward to Monday a high-level meeting with ministers and regional government leaders to plan future steps. She said on Twitter that a local approach remains "of fundamental importance" for the areas most struck by the virus after putting mayors and provincial governors in charge of battling the outbreaks. (BBG)

RATINGS: Ratings reviews of note from after hours on Friday included:

  • Moody's affirmed Finland at Aa1; Outlook Stable
  • Fitch affirmed the Czech Republic at AA-; Outlook Stable
  • Fitch affirmed the EFSF at AA; Outlook Stable
  • Fitch affirmed the ESM at AAA; Outlook Stable
  • Fitch affirmed Greece at 'BB'; Outlook Stable
  • S&P affirmed Slovakia at A+; Outlook changed to Negative from Stable
  • DBRS Morningstar confirmed the EFSF at AAA, Stable Trend
  • DBRS Morningstar confirmed the ESM at AAA, Stable Trend
  • DBRS Morningstar confirmed Malta at A (high), Stable Trend
  • DBRS Morningstar confirmed the Netherlands at AAA, Stable Trend
  • DBRS Morningstar confirmed Switzerland at AAA, Stable Trend

EQUITIES: SAP SE, Europe's largest technology company, is selling a stake in its Qualtrics customer-survey software unit through a U.S. public offering, less than two years after buying the firm to help compete with Salesforce Inc. SAP will keep a majority interest in Qualtrics while giving the business greater autonomy under existing managers including founder Ryan Smith, Walldorf, Germany-based SAP said in a statement Sunday. Smith, who started Qualtrics with brother Jared in the basement of their parents' home in Utah, will be the largest individual shareholder. (BBG)


FISCAL: U.S. lawmakers are edging closer to a fiscal package of USD1.5 trillion or more as worsening economic conditions offer Democrats pushing for stronger financial support to households and businesses an election-year advantage, top political advisers said in interviews with MNI. For more details please contact

FISCAL: Treasury Secretary Steven Mnuchin told "Fox News Sunday" that a Republican version of a coronavirus Phase 4 stimulus bill will be introduced Monday. "This is all about kids and jobs," Mnuchin said. "This is our focus, and we want to make sure something gets passed quickly, so that we deal with the unemployment, and all the other issues like Paycheck Protection Plan, tax credits, rehire people and money for schools." White House negotiators have been working with Senate Republicans on "technical issues" in the package this weekend, Mnuchin told host Chris Wallace. The updated stimulus package comes after the $1 trillion proposal fell through just days before. He also suggested that some thornier issues could be kicked down the road to a Phase 5 or 6 bill. (Fox)

FISCAL: White House economic advisor Larry Kudlow said Sunday that the next round of coronavirus relief will include $1,200 stimulus payments to Americans and said the Trump administration will lengthen the federal eviction moratorium. "There's a $1,200 check coming, that's going to be part of the new package," Kudlow said in an interview on CNN's "State of the Union." The next coronavirus bill from Senate Republicans is set to provide a temporary and reduced extension of unemployment benefits, another round of stimulus checks, liability protection for businesses and funding to help schools restart. The legislation will also include $16 billion in new funds for testing and tax incentives to encourage companies to rehire employees. (CNBC)

FISCAL: Senate Majority Leader Mitch McConnell said that he hopes in the next two to three weeks the Senate will be able to get the next coronavirus relief bill to the House. "Hopefully in the next two to three weeks we'll be able to come together and pass something that we can send over to the House and down to the President for signature," McConnell told CNN affiliate WKYT in an interview posted Friday evening. McConnell said he will begin talking to Democrats as soon as next week on the bill. (CNN)

FISCAL: House Speaker Nancy Pelosi said on CBS News' "Face the Nation" Sunday that Democrats will not support liability protections for employers of "essential workers" in the next coronavirus relief bill. Senate Republicans' stimulus proposal is expected to include widespread liability insurance for schools, businesses, hospitals and more, which Majority Leader Mitch McConnell has called his "red line." (Axios)

ECONOMY: White House economic adviser Larry Kudlow said he expects to see U.S. economic growth jump by 20% in both the third and fourth quarters. The Trump administration also expects Congress to pass an extension of the federal eviction moratorium, which expired Friday and covers renters in building with federally backed mortgages. "We will lengthen" the moratorium, Kudlow said on CNN's "State of the Union." (BBG)

ECONOMY: Former U.S. Treasury Secretary Larry Summers said he's never seen a more uncertain recovery, especially if Congress doesn't act "strongly and quickly" to continue economic stimulus to offset the coronavirus pandemic. More important than the size of the next relief package is how long the emergency measures last, given the vast number of Americans now unemployed, the former Obama and Clinton administration official said in an interview on "Bloomberg Wall Street Week." (BBG)

CORONAVIRUS: US states reported 62,000 new coronavirus cases on Sunday as Florida, Tennessee and Arizona recorded the highest number of new cases per million people. There were 558 new deaths reported, down from the 1,037 deaths reported across the country a day earlier, according to the Covid Tracking Project. Figures released on Sundays are often lower than the rest of the week because of the weekend effect. (FT)

CORONAVIRUS: White House coronavirus task force coordinator, Dr. Deborah Birx, said during a TODAY Show interview that a spike in coronavirus cases in California and other hard-hit states resembles "three New Yorks," once the epicenter of the outbreak. "We're already starting to see some plateauing in these critically four states that have really suffered under the last four weeks, so Texas, California, Arizona and Florida, those major metros and throughout their counties," Birx said. "And I just want to make it clear to the American public: What we have right now are essentially three New Yorks with these three major states," referring to Florida, Texas and California. (CNBC)

CORONAVIRUS: There are "unmistakable signs" the pandemic is slowing in Texas and Arizona, with California and Florida trends a bit more mixed, former FDA Commissioner Scott Gottlieb said on CBS. Indiana, Illinois, Ohio, Georgia, Alabama and South Carolina, along with Washington DC, are "heating up," he warned. Gottlieb said a "trifecta of activity" by Republican Governor Doug Ducey in Arizona was having an impact and suggested other states followed suit. Ducey's approach includes a mask mandate, shutting bars and movie theaters and limiting the number of people in restaurants. Also, "collective action on the part of businesses" to enforce mask wearing is gathering pace and is a way around the politicized nature of masks, he said. (BBG)

CORONAVIRUS: Schools across the US should reopen if the positive test rate for Covid-19 is less than 5 per cent in the surrounding area, according to the US Centers for Disease Control and Prevention, in new guidance that echoes Donald Trump's insistence that children return to classrooms in the autumn. (FT)

CORONAVIRUS: The U.S. Food and Drug Administration reissued LabCorp Covid-19 RT-PCR Test emergency use authorization to include new indications for use. They include testing for people who don't have coronavirus symptons or who have no reason to suspect infection, and for pooled sample testing. (BBG)

CORONAVIRUS: New Orleans Mayor LaToya Cantrell effectively closed the city's bars, prohibiting take-out alcohol service from bars and restaurants starting on Saturday. Indoor bar service had already been prohibited as cases in Louisiana continue to spike. (BBG)

CORONAVIRUS: Harris County and Houston health authorities on Friday ordered all public and non-religious private schools to delay opening for in-person instruction until at least Sept. 8 — a date likely to be extended unless the region sees a significant reduction in its COVID-19 outbreak. Flanked by their respective health officials, Harris County Judge Lina Hidalgo and Houston Mayor Sylvester Turner said the region's novel coronavirus outlook appears too dire to allow the restart of face-to-face classes before Labor Day. Most Houston-area public school districts already had pushed back their in-person start dates to Sept. 8, though a few remained on track to hold on-campus classes in August. "The last thing I want to do is shut down a brick-and-mortar representation of the American dream," Hidalgo said Friday. "But right now, we're guided by human life." (Houston Chronicle)

CORONAVIRUS: U.S. Immigration and Customs Enforcement issued a release on Friday barring new international students from entering the U.S. for their fall terms if their courses are entirely online. (Axios)

CORONAVIRUS/POLITICS: The governors in four of the states hit hardest by the coronavirus have taken a massive hit in public approval over their handling of the pandemic, according to SurveyMonkey poll data shared exclusively with Axios. Florida Gov. Ron DeSantis, Texas Gov. Greg Abbott, Arizona Gov. Doug Ducey, and Georgia Gov. Brian Kemp — all Republicans — saw their ratings take a nosedive this month as coronavirus cases skyrocketed in their states. (Axios)

POLITICS: U.S. President Trump tweeted the following on Sunday: "The 2020 Election will be totally rigged if Mail-In Voting is allowed to take place, & everyone knows it. So much time is taken talking about foreign influence, but the same people won't even discuss Mail-In election corruption. Look at Patterson, N.J. 20% of vote was corrupted!" (MNI)

POLITICS: FiveThirtyEight founder Nate Silver said on ABC's "This Week" that while President Trump's reelection bid is "clearly in trouble" due to his dismal coronavirus approval ratings and polling in swing states, he does not believe the president's "fate is sealed." There are 100 days until the election and the warning signs are flashing bright red for Trump. Eight in 10 Americans said in an AP-NORC poll released Sunday that the country is heading in the wrong direction — more than at any other point during Trump's presidency. That same poll found that just 32% support Trump's handling of the coronavirus pandemic, including only 68% of Republicans. But as Silver points out, a major breakthrough in the vaccine race or a sudden economic recovery could change the situation. "We found historically that when there are lots of major news events and economic disruptions, an election becomes harder to predict," Silver said. (Axios)

POLITICS: Top Trump advisers and GOP leadership have told the president in recent weeks that he needs to switch gears on the coronavirus and go all in on messaging about progress on vaccines and therapeutics. (Axios)

DEBT: Just over 7% of auto and personal loans are in some type of financial hardship program as of June, while 6.79% of mortgages and 3.57% of credit card accounts are in some kind of payment relief. (CNBC)

DEBT: Analysts are warning of a surge in defaults in consumer debt in the US if Congress fails to extend the programme of increased unemployment benefits that was put in place to ease the effects of the coronavirus outbreak. Lawmakers are locked in negotiations over further stimulus to replace the pandemic unemployment assistance payments, worth $600 per week for each claimant, which are due to expire on July 25. Proposals are also being discussed to repeat the tax rebates that sent up to $1,200 directly to people earning up to $99,000. (FT)

SOCIETY: A man was killed during a protest in Texas as demonstrations against racial and social injustice continued across the U.S. on Saturday night. The victim was fatally wounded at around 10 p.m. in Austin, police said. Initial reports indicated the man may have been carrying a rifle when he approached a vehicle, whose driver fired several shots, according to police, The suspect was detained. (BBG)

SOCIETY: The Seattle Police Department declared a riot on Saturday afternoon and used nonlethal weapons in an attempt to disperse a crowd of roughly 2,000 people in the Capitol Hill neighborhood marching in the city's largest Black Lives Matter protest in more than a month. (Washington Post)

SOCIETY: Protests intensified in Portland, Ore., on Saturday as thousands of people gathered outside a federal courthouse that has for weeks been the site of violent clashes between federal law enforcement and demonstrators. The Portland Police Department declared a riot in the city early Sunday, shortly after a group of protestors toppled part of a fence outside the Mark O. Hatfield Federal Courthouse. The police said that the riot was declared in response to the "violent conduct" of people who were creating "grave risk of public alarm." (The Hill)

SOCIETY: A federal judge on Friday denied the Oregon attorney general's request for a temporary restraining order against certain actions by federal authorities in Portland, saying the state lacked the legal standing to seek that relief. Oregon Attorney General Ellen Rosenblum filed a lawsuit on July 17 against the U.S. Department of Homeland Security, the U.S. Marshals Service, U.S. Customs and Border Protection, the Federal Protection Service and their agents. In it, she alleged that federal officers in the city of Portland have acted unlawfully by seizing and detaining Oregonians without probable cause, and she sought a restraining order that would temporarily stop them from using such tactics. "We are today asking the federal court to stop the federal police from secretly stopping and forcibly grabbing Oregonians off our streets," Rosenblum wrote in a statement. (NPR)

HURRICANE: Thousands of homes and businesses have been left without power after Hurricane Hanna swept through southern Texas. It came ashore on Saturday as a category one storm (the lowest of the five levels) and later was downgraded to a tropical storm. But winds of up to 60mph still battered towns, the US National Hurricane Center (NHC) said, toppling vehicles and forcing a two mile stretch of US Route 77 in Sarita, near the Mexican border, to be closed for rescue missions. (Sky)

PHARMA: President Donald Trump on Friday signed four executive orders aimed at lowering the high cost of prescription drugs in the United States in what would make sweeping changes to the prescription drug market in the U.S. if they are finalised. Industry trade group PhRMA, the Pharmaceutical Research and Manufacturers of America, called them a "reckless distraction" to the Covid-19 pandemic. The orders, which are subject to the regulatory review process, are designed to bring U.S. drug prices at least on par with their costs overseas. Trump said Americans often pay 80% more for prescription drugs than Germany, Canada and other nations for some of the most expensive medicines. (CNBC)

EQUITIES: The major Congressional hearing on competition in the U.S. tech sector has been delayed two days to Wednesday, the House Judiciary Committee confirmed on Saturday. The antitrust hearing — set to feature Amazon CEO Jeff Bezos, Apple CEO Tim Cook, Facebook CEO Mark Zuckerberg and Google CEO Sundar Pichai — was originally scheduled for Monday but was postponed due to it conflicting with the memorial service for the late Rep. John Lewis, as CNBC reported earlier. The House Judiciary Committee and the Antitrust Subcommittee confirmed the move in a postponement listed on the subcomittee's website. (CNBC)

EQUITIES: Australian Competition & Consumer Commission launched Federal Court proceedings against Google LLC, alleging Google misled the nation's consumers to obtain their consent to expand the scope of personal information that Google could collect and combine about consumers' internet activity, for use by Google, including for targeted advertising. (BBG)

EQUITIES: Boeing Co is preparing to delay its all-new 777X jet by several months or up to a year, three people familiar with the matter said, as the COVID-19 crisis exacerbates a drop in demand for the industry's largest jetliner. Boeing hopes to bring the jet to market as passenger travel rebounds after a downturn caused by the pandemic. It would also hope for a detente in a trade war between Washington and Beijing, which has sidelined crucial Chinese aircraft buyers. But stretching out the development opens up fresh risks for Boeing, such as losing engineering attention and momentum, and tougher scrutiny from the U.S. Federal Aviation Administration during the years-long certification process. (RTRS)

EQUITIES: Stock bulls who have spent four months shoveling money into an ever-appreciating group of technology behemoths are getting the worst news imaginable: there may be a limit to how big these companies can get. Despite quarterly results that have been by many measures spectacular, stocks in the Nasdaq 100 are currently at risk of their worst relative return during earnings season in a decade, trailing the S&P 500 by 3 percentage points. Given how hard it's been for bad economic news to hurt the group, the culprit would seem to be valuations, which at 33 times income are double levels just 18 months ago. (BBG)

EQUITIES: One unexpected casualty of the 2020 market will be the popular notion that the pros have it over the amateurs when it comes to choosing stocks. Top holdings by traders on the Robinhood retail app since the start of the year are up more than 1% on average, compared with a decline of 7% for the typical S&P 500 constituent. An analysis by Bespoke Investment Group shows that stocks usually attract a following on the platform after they suffer big drops, suggesting its newbie day-traders are succeeding at investing's hardest task: Buying low and selling high. (BBG)


GLOBAL TRADE: Washington may include financial support in its campaign against the use of Huawei Technologies equipment in 5G infrastructure, a top U.S. diplomat said, as the U.S. looks to bring developing Asian countries in line with its policy. Huawei is attractive to developing countries with limited resources because its products and services are usually cheaper than alternatives produced by Ericsson and Nokia. But those prices come with a hidden cost, Keith Krach, U.S. undersecretary of state for economic growth, energy and the environment, told a roundtable discussion with Nikkei and other Japanese media. "Huawei is the backbone of the CCP's surveillance state," he said, referring to the Communist Party. "That's why any country that includes equipment from either Huawei or ZTE in its 5G system is vulnerable to theft and surveillance at any time." Krach spoke as the Trump administration wages a campaign against Huawei and other Chinese tech companies, accusing them of posing a risk to the security of nations. While Huawei and others have denied the accusations, the campaign is beginning to pay dividends this month, with the U.K. banning Huawei from its 5G networks and France's cybersecurity agency reportedly placing a de facto ban on the company. Instead of relying on Huawei, which has become a worldwide leader in telecoms, the U.S. has options for countries to replace Huawei-made equipment, Krach said. (Nikkei)

GLOBAL TRADE: As the China-US relationship continues its downward spiral following a series of provocative maneuvers by Washington, a dim light of cautious hope emerged that reported trade discussions scheduled next month between senior officials from both sides could produce certain momentum for maintaining dialogue channels for what appears to be one of the most challenging and risky periods in China-US relations over the next three months. Such hopes among some Chinese experts stem largely from the long-standing belief that the massive economic and trade cooperation between the world's two largest economies still play the role of a ballast stone that helps stabilize the most consequential bilateral relationship in the world. The fact that both sides still cling onto the phase one trade agreement despite widening confrontation also underscored the long-term importance of trade for both sides that outweighs election politics in the US and any ill-intended geopolitical gambit of any US administration, analysts noted. (Global Times)

GLOBAL TRADE: Apple to work with suppliers including Parade Technologies and Epistar on R&D for Mini LED and Micro LED applications at TSMC's Longtan plant, Taipei-based Economic Daily News reports, citing unidentified people in the industry. (BBG)

GLOBAL TRADE: As talks over a European Union-Chinese investment treaty reach the business end, advisers and analysts in China fear negotiations are drifting further from the economic path chosen by Beijing. A tug of war is set to take place over competition rules for China's heftily-subsidised state-owned enterprises to ensure European firms have a level playing field. On one side, China has signalled that solid commitments will not come easy, while on the other, Brussels is refusing to compromise on the substance of the Deal. (SCMP)

GLOBAL TRADE: The European Union will limit technology exports to Hong Kong that may be used for repression or surveillance, an EU draft document seen by Reuters said, in the bloc's first concrete reaction to the Chinese security clampdown on the territory. Expressing "grave concern" for a sweeping national security law imposed by China on the former British colony, the 27 EU states agreed on Friday to a series of sanctions, including trade curbs and a review of visa agreements with the territory. The document, backed by EU ambassadors, says the bloc will be "further scrutinising and limiting exports of specific sensitive equipment and technologies for end-use in Hong Kong, in particular where there are grounds to suspect undesirable use relating to internal repression, the interception of internal communications or cybersurveillance". The document is expected to enter into force on Tuesday. (Globe & Mail)

GLOBAL TRADE: A mineral vital to electric vehicle batteries is no longer under China's near-exclusive control, as Australian mines challenge their Chinese counterparts in the extraction and processing of graphite. (Nikkei)

U.S./CHINA: U.S. officials pried open the doors of the Chinese consulate in Houston on Friday and took over the building shortly after Chinese officials vacated the facility on orders from the Trump Administration. Federal officials and local law enforcement surrounded the Houston facility Friday afternoon as the Chinese officials moved out of the building that the Trump Administration contends was a hub of spy activity by the Chinese Communist Party. Forty minutes after the 4 p.m. eviction deadline passed, U.S. officials broke into a back door of the consulate and a man believed to be a State Department official led the way of the U.S. takeover, the Houston Chronicle reported. (Fox)

U.S./CHINA: The Chinese Consul General of Houston Cai Wei said on Friday that the friendship between the Chinese and American people will prevail, despite the deliberate escalation of tensions by a few U.S. politicians. The U.S. on Tuesday abruptly ordered China to close its consulate in Houston, Texas, within 72 hours. In an open letter to people in the U.S. southern states, Chinese Consul General of Houston Cai Wei said that the consulate had always stood firmly with the people in the region, particularly in challenges like COVID-19 pandemic and natural disasters like hurricanes. (CGTN)

U.S./CHINA: The Chinese Embassy in the United States said on Saturday that it will temporarily take over the work of the Consulate General in Houston, and continue the various services for the people in the consular district. "Taking into account of the desire and needs of the southern part of the U.S. for continued exchanges and cooperation with China and the practical difficulties that may come up, the Chinese Embassy in the United States will temporarily take over the work of the Consulate General in Houston, and continue the various services for the people in the consular district," the Chinese Embassy said in a statement. "The Chinese Embassy and Consulates General in the United States have always been committed to the healthy and stable development of China-U.S. relations, to China-U.S. exchanges and cooperation and to the two peoples' friendship," the embassy said. (CGTN)

U.S./CHINA: The Trump administration's decision to shutter the Chinese consulate in Houston followed years of frustration about what it says were criminal and covert activity directed by Beijing to steal trade secrets and carry out malign influence operations across the U.S. While two Chinese citizens were convicted in the past year for trying to steal trade secrets in America's energy capital, three administration officials briefing reporters on Friday said the sum total of activity conducted through the Houston consulate represented the "tip of the iceberg" when it comes to concerns about China. (BBG)

U.S./CHINA: A researcher who took refuge in the Chinese consulate in San Francisco after allegedly lying to investigators about her Chinese military service was arrested and will appear in court on Monday, according to a senior Justice Department official. According to court documents unsealed earlier this week in the Eastern District of California, Juan Tang, a researcher at the University of California, Davis, applied for a nonimmigrant J1 visa in October 2019. The visa was issued in November 2019 and Tang entered the United States a month later. (CNBC)

U.S./CHINA: A Singaporean man has pleaded guilty in the US to working as an agent of China, the latest incident in a growing stand-off between Washington and Beijing. Jun Wei Yeo was charged with using his political consultancy in America as a front to collect information for Chinese intelligence, US officials say. Separately, the US said a Chinese researcher accused of hiding her ties to China's military was detained. (BBC)

U.S./CHINA: Chinese authorities have taken over the U.S. consulate in Chengdu following its closure, the latest historic milestone marking the deterioration in relations between Washington and Beijing. The U.S. lowered its flag over the American consulate in the southwest Chinese city earlier Monday, less than three days after the U.S. government forced their Chinese counterparts out of their mission in Houston. The security cordon around the consulate, which has ebbed and flowed since China announced its decision Friday to expel the diplomats, tightened Monday morning, with police preventing pedestrians from getting within a block of the facility. (BBG)

U.S./CHINA: U.S. Secretary of State Pompeo tweeted the following on Friday: "The only way to truly change Communist China is to act on the basis of what its leaders do, not what they say. President Reagan dealt with the Soviets on the basis of "trust but verify." When it comes to the CCP, I say, "Distrust and verify." (MNI)

U.S./CHINA: China is a defender. But if Washington is so determined to push China-US ties in the worst direction, China will not be able to change the trend on its own. Once Washington can do whatever it wants in unbridled ways, the 21st century will be darker and even more explosive than the Cold War era. Accidental sparks may lead to unprecedented catastrophe. The world must start to act and do whatever it can to stop Washington's hysteria in its relations with China. Right now, it is no longer a matter of whether China-US ties are in freefall, but whether the line of defense on world peace is being broken through by Washington. The world must not be hijacked by a group of political madmen. The tragedies in 1910s and 1930s must not be repeated again. (Global Times)

U.S./CHINA: US politicians think they can achieve their goal through attacking the CPC. They overestimate themselves. They try to alienate the people from the CPC like ants trying to shake a big tree. They underestimate the solidarity and cohesion of Chinese society. (Global Times)

U.S./CHINA: While US-China tensions escalate with a fresh tit-for-tat exchange of consulate closures, it may not be the lowest point in the deterioration of US-China ties as the world's largest economic relationship has yet to hit rock bottom. For Chinese businesses and investors, this means that things could become far more challenging in the coming months, and they need to get prepared for the unexpected. Efforts to stamp out corruption in Brazil have floundered since President Jair Bolsonaro took office, according to the country's former justice minister who also spearheaded the long-running Lava Jato graft probe. Sérgio Moro, whose resignation from the government in April triggered an investigation into Mr Bolsonaro, is one of Brazil's most recognisable public figures and widely expected to stand for the presidency in 2022. "The anti-corruption agenda has suffered setbacks since 2018," when Mr Bolsonaro was elected, Mr Moro told the Financial Times. "One of the reasons I left the government was because it wasn't doing much. They were using my presence as an excuse, so I left." (Global Times)

U.S./CHINA: Chinese companies have raced to sell shares on Wall Street this year even as relations between Washington and Beijing plunged to their lowest ebb in decades. The number of initial public offerings by Chinese businesses on the New York Stock Exchange and Nasdaq have more than doubled since the start of this year, according to Dealogic data. The companies that have listed have raised $2.9bn, a nearly 30 per cent rise compared with the same period last year. That figure could rise substantially with the listing of Chinese fintech group Lufax this year, according to people familiar with the matter. (FT)

UK/CHINA: Senior Conservatives are this weekend demanding a review of the Hinkley Point C nuclear plant after a Sunday Telegraph investigation found a Chinese state energy company is more closely involved in the project than previously disclosed. Sir Iain Duncan Smith, the former Conservative leader, said he believes that ministers had been misled when they approved the role of China General Nuclear in the £22.5bn reactor. Theresa May's government was assured in 2016 the Beijing-controlled company would be a financial partner only when it took a 33.5pc stake in Hinkley alongside the lead developer, France's EDF. The Sunday Telegraph found conflicting statements from the Chinese and the French over the number of Chinese workers on the site. CGN has said it has "more than 100 engineers and technical experts working on Hinkley", while EDF has put the number at between 20 and 30. Both companies this weekend declined to comment. (Telegraph)

UK/U.S.: When Mike Pompeo, the US secretary of state, praised Britain's newly toughened stance on the Chinese telecoms firm Huawei last week, he did so in a way that has uncovered one of the secret truths at the heart of Boris Johnson's government. "Well done," said Pompeo, in the manner of a teacher planting a gold star on the work of a favoured pupil whose recent lapses of discipline have been rectified after a detention. This display was too much for one minister. "It would make things much easier," he said, "if Trump doesn't win re-election." Privately, many agree. (Sunday Times)

GEOPOLITICS: The Chinese military began live-fire drills in the South China Sea on Saturday in a challenge to U.S. freedom of navigation operations there, as the two powers trade shows of military and diplomatic force. (Nikkei)

GEOPOLITICS: The UK will bolster its ability to fend off threats from China and Russia in space as part of the most comprehensive defence review since the Cold War, Ben Wallace has said. (Telegraph)

G7: Germany has rejected a proposal by U.S. President Donald Trump to invite Russian President Vladimir Putin back into the Group of Seven (G7) most advanced economies, German Foreign Minister Heiko Maas said in a newspaper interview published on Monday. Trump raised the prospect last month of expanding the G7 to again include Russia, which had been expelled in 2014 following Moscow's annexation of Ukraine's Crimea region. (RTRS)

CORONAVIRUS: Dr. Anthony Fauci, the nation's leading infectious disease expert, said a coronavirus vaccine likely won't be "widely available" to the American public until "several months" into 2021. Public health officials and scientists expect to know whether at least one of the numerous potential Covid-19 vaccines in development is safe and effective by the end of December or early next year, the director of the National Institute of Allergy and Infectious Diseases said during a live Q&A with the Washington Post. "It is likely that at the beginning of next year we would have tens of millions of doses available," he said. "I think as we get into 2021, several months in, that you would have vaccines that would be widely available." (CNBC)

CORONAVIRUS: I'rom Group says non-clinical testing of a possible coronavirus vaccine its unit is developing showed a rise in antibodies. Preparations for clinical testing could begin as soon as Jan. Says development costs are already reflected in forecasts. (BBG)

CORONAVIRUS: Human trials for a Covid-19 vaccine could begin in Singapore as early as this week. The trial will involve 108 healthy volunteers of various ages in Singapore who will be injected with the vaccine developed by Duke-NUS Medical School and United States pharmaceutical company Arcturus Therapeutics. Called Lunar-Cov19, the vaccine is one of 25 vaccine candidates worldwide that either have been tested on humans, or have received approval to do so. Some 141 others are still at a pre-clinical phase. (Straits Times)

CORONAVIRUS: SK Bioscience, the South Korean pharmaceutical company backed by Bill Gates, may be capable of producing 200 million coronavirus vaccine kits by next June, the Microsoft Corp. co-founder said in a letter to South Korean President Moon Jae-in. (BBG)

HONG KONG: An abattoir, a police station and a university hall of residence are among sites that recorded cases of coronavirus for the first time in Hong Kong, as the city announced 261 new cases at the weekend. The city's Food and Environmental Hygiene Department said two people in a slaughterhouse in Sheung Shui, near the boundary with Guangdong province, preliminarily tested positive for Covid-19. A spokesman said meat from the facility is fit for consumption. (FT)

HONG KONG: Hong Kong will ban all dine-in services at restaurants and require masks outdoors from Wednesday, Cable TV reports, citing unidentified people. There are exemptions for the mask requirement, the report says without giving further details. (BBG)

HONG KONG: Hong Kong Chief Executive Carrie Lam took to Facebook to dispel rumors that a full lockdown would be imposed on the city as it battles a new Covid-19 wave, but said stricter anti-virus measures could still come into play. "I note that recently there have been a lot of false rumours on the internet saying that the Government will shortly implement 'lockdown,'" she wrote in a post. "Such malicious rumors have made our anti-epidemic efforts even more difficult and should be condemned." "What we see now is that there is still room for further restricting the operation of various premises and reducing the number of people going out," she said. (BBG)

HONG KONG: Hong Kong's economy may take longer than expected to recover due to the fluidity of the local virus situation and global economic uncertainties, Financial Secretary Paul Chan said. "Business and economic activities that have seen signs of recovery have been hit by the fresh wave of the virus," Chan said in a blog post Sunday. He once again urged landlords to offer tenants rental concessions to ride out the impact. (BBG)

BOJ: Bank of Japan policymakers debated how the COVID-19 pandemic could reshape monetary policy and its impact on the economy, a summary of their opinions at a July rate review showed, a sign they were bracing for a prolonged battle against the health crisis. Many in the nine-member board warned any domestic recovery from the devastating economic impact of the pandemic would be modest and could be delayed depending on how long it takes to contain the outbreak, according to the summary released on Monday. (RTRS)

JAPAN: The Japanese government plans to ask businesses to have their 70% of workforce adopt telecommuting as the coronavirus epidemic widens, Japanese Economy Minister Yasutoshi Nishimura said at a news conference Sunday, Jiji reports. Will ask companies to refrain from organizing large-scale gatherings, promote staggered working hours, observe prevention guidelines and promote use of contact-tracing app. The government plans to convene a virus panel meeting this week to analyze the epidemic and draft responses. (BBG)

RBA: Assistant Governor Christopher Kent responds to a question on whether the Reserve Bank of Australia is leaning on the balance sheets of other global central banks to keep the long end of the curve in check. "The reason we focused on 3-years as the target is it complements other elements of the package and it's also worth remembering that it's a pretty important part of the curve for funding for banks. So that's true all the way from the short-end out to about three years." "It also appears, at least statistically, to have a pretty strong relationship, that short end of the curve, with the exchange rate. So for all those reasons it's a useful target in terms of transmission of monetary policy." (BBG)

AUSTRALIA: Australia's Victoria state recorded 532 new Covid-19 cases as authorities struggle to bring a second wave of infections under control. The daily tally announced Monday follows the 459 new cases reported the previous day in Victoria, and is a new national record. There were six additional fatalities, State Premier Daniel Andrews said at a press conference. Authorities are battling to contain a fresh wave of infections after about 5 million people in Melbourne were plunged back into lockdown more than two weeks ago.

AUSTRALIA: Shadow Treasurer Jim Chalmers says Labor will consider changes to the emergency industrial relations rules for companies not on JobKeeper.His views come just as Treasurer Josh Frydenberg doubled down on his comments that Australia needed the kind of economic reform, especially in industrial relations, introduced by conservative icons Margaret Thatcher and Ronald Reagan.On Sunday Mr Frydenberg told the ABC that the emergency changes to the Fair Work Act, which have enabled employers to vary the hours worked and duties performed during the COVID-19 hit, had to be continued for companies no longer on JobKeeper."What we are talking about is having discussions with the stakeholders to continue those JobKeeper arrangements in terms of the IR laws. Because the protections for the staff members remain - adverse action, coercion, unfair dismissals, occupational health and safety - all those protections are in place. But we want to give the businesses the best opportunity to go forward," Mr Frydenberg said.Last week Prime Minister Scott Morrison suggested the emergency changes to the Fair Work Act, would still be needed even as turnovers recovered, sparking a debate from Labor and unions. (Australian Finacial Review)

AUSTRALIA/CHINA: Australia has joined the United States in stating that China's claims in the South China Sea do not comply with international law in a declaration likely to anger China and put more strain on their deteriorating relations. The United States this month rejected China's claims to offshore resources in most of the South China Sea, drawing criticism from China which said the U.S. position raised tension in the region. Australia, in a declaration filed at the United Nations in New York on Friday, said it too rejected China's maritime claims around contested islands in the South China Sea as being inconsistent with the UN Convention on the Law of the sea. (RTRS)

AUSTRALIA/CHINA: Agricultural business leaders concerned about the impact rising tensions with China will have on exports are hoping to explore a "separation of powers" between Australia's foreign relations and trade ties with China. Mark Allison, the chief executive of agribusiness giant Elders, is among those concerned, lamenting that trade is used as a "weapon for foreign affairs" and that strong links between Chinese and Australian companies should be able to flourish despite future hostilities. His comments come after Agribusiness Australia, the body representing the country's agricultural companies, producers and exporters, released its State of the Industry report last week, which found Australian agriculture is set to fall $12bn short of its 2030 target of $100bn in production value. The report calls for a revamp of the way the sector operates, including shifting its target from $100bn in farmgate revenue, to a $300bn target of value created across the supply chain. (Guardian)

RBNZ: RBNZ publishes new data series showing bank customer lending flows, on website. Shows value of business loans with missed payments was NZ$1.66b in week ended July 17. RBNZ says value "remained elevated" after jumping to NZ$1.75b in previous week and is up from NZ$1.36b in week ended June 19. (BBG)

NEW ZEALAND: New Zealand's main opposition party has slumped in a poll after it changed leader and one of its parliamentarians resigned over an alleged sexting scandal. Support for the conservative National Party fell to just 25.1% in a Reid Research/Newshub poll published late Sunday, down from 30.6% in May. Prime Minister Jacinda Ardern's Labour Party soared to a record 60.9% from 56.5%, meaning it could form a government alone. A general election will be held Sept. 19. The poll of 1,000 people was conducted July 16-24, shortly after Judith Collins took after as leader from Todd Muller, who lasted less than two months in the role. National has stumbled from one crisis to the next. (BBG)

SOUTH KOREA: Korea Investment Corp. (KIC), South Korea's US$157 billion sovereign wealth fund, is seeking to buy commercial properties in Europe and China, the company's top executive has said, in what could be its latest alternative investments."We are considering making investments one each in Europe and in China," KIC Chairman and CEO Choi Hee-nam said in a recent interview with Yonhap News Agency.Still, Choi declined to give any further details, citing possible negative effects on negotiations with sellers of the commercial properties.Nowadays, buyers and sellers of commercial properties have been at odds over the valuation of properties due to the fallout from the coronavirus pandemic, a development that could hinder deals, Choi said.The KIC's planned investments come amid rising office vacancy rates in the Chinese commercial hub of Shanghai and other major Chinese cities due to the COVID-19 pandemic. (Yonhap)

SOUTH KOREA: South Korea and U.S. military authorities agree to conduct scaled-back military drills after Aug. 15, Chosun Ilbo newspaper reports, citing an unidentified South Korean government official. The joint military drills would include Full Operational Capability (FOC) test, which aims to assess the South Korean military's capabilities for the transfer of the wartime operational control. A significant number of U.S. mainland troops won't participate in the drills due to coronavirus concerns. (BBG)

NORTH KOREA: North Korean leader Kim Jong Un declared an emergency and a lockdown in a border town after a person suspected of being infected with the novel coronavirus returned from South Korea after illegally crossing the border, state media said on Sunday. If confirmed, it would be the first case officially acknowledged by North Korean authorities. Kim convened an emergency politburo meeting in response to what he called a "critical situation in which the vicious virus could be said to have entered the country", the North's KCNA state news reported. (RTRS)

NORTH KOREA: More than 40 countries, including the United States and Japan, on Friday reported to a U.N. committee that North Korea has breached sanctions by exceeding a cap on refined petroleum products through illicit transfers at sea. North Korea, sanctioned for its nuclear and ballistic missile programs, is believed to have smuggled over 1.6 million barrels during the five months from January -- far larger than the annual cap of 500,000 barrels set by a 2017 U.N. resolution -- through 56 illicit shipments, according to a document submitted to a U.N. Security Council sanctions committee on North Korea and UNSC sources. (Nikkei)

ASIA: The Asia-Pacific Economic Cooperation (Apec) should pursue deeper regional economic integration to tap into opportunities amid the spillover effects in global trade and supply chain resulting from the trade tensions between the United States (US) and China. (Malay Mail)

AIIB: The China-backed Asian Infrastructure Investment Bank said it would hold a virtual annual meeting on Tuesday. Chinese president Xi Jinping will give the opening address to the meeting of the multilateral lender, which has 102 members. The meeting, the fifth since the bank launched in 2016, would be the first to be held online, due to the spread of the coronavirus. (FT)

RATINGS: Ratings reviews of note from after hours on Friday included: S&P affirmed Turkey at B+; Outlook Stable

BRAZIL: Brazil, which has the world's worst virus outbreak after the U.S., registered 24,578 new cases and 555 deaths, the Health ministry said. That's half of the 51,147 cases and 1,211 deaths reported the previous day. Total cases are now 2,419,091, with 87,004 deaths as the infection curve continues to show an increasing overall trend. Most cities are relaxing social isolation measures and reopening for business after the economy plunged in the beginning of the second quarter. (BBG)

BRAZIL: Brazil's President Jair Bolsonaro tested negative for the coronavirus, in the latest test he took since confirming he had contracted the disease earlier this month. Bolsonaro tweeted his negative test results, together with a picture of him holding a box of hydroxychloroquine, a drug whose benefits in treating the illness are disputed. (BBG)

BRAZIL: Efforts to stamp out corruption in Brazil have floundered since President Jair Bolsonaro took office, according to the country's former justice minister who also spearheaded the long-running Lava Jato graft probe. Sérgio Moro, whose resignation from the government in April triggered an investigation into Mr Bolsonaro, is one of Brazil's most recognisable public figures and widely expected to stand for the presidency in 2022. "The anti-corruption agenda has suffered setbacks since 2018," when Mr Bolsonaro was elected, Mr Moro told the Financial Times. "One of the reasons I left the government was because it wasn't doing much. They were using my presence as an excuse, so I left." (FT)

SOUTH AFRICA: South Africa's presidency has designated the country's priority infrastructure projects, paving the way for the beginning of private investment in a 2.3 trillion rand ($138 billion) program over the next decade. The Presidential Infrastructure Coordinating Commission Council issued a list of projects ranging from key water supply and irrigation developments to energy, roads, housing and fish-farming plans. While to date most infrastructure has been funded by the state, the country is now saddled with debt and the coronavirus outbreak has limited the amount of money available for investment. The government is now seeking funds from development finance institutions, mulitilateral institutions and private pension funds. (BBG)

ARGENTINA: Argentina's government reaffirmed on Saturday that it would not budge from its latest proposal to restructure around the $65 billion in debt, but signaled it would be willing to negotiate on the fine print around the deal. The South American country is facing a standoff with bondholders after creditor groups joined forces to reject the government's proposal earlier in July and put forward one of their own. The government has repeatedly said it cannot offer more, though sources told Reuters this week it would be willing to negotiate key contractual terms."Argentina wishes to and will contribute to the development of contractual instruments that enhance the success of sovereign restructuring initiatives when they enjoy meaningful creditor support," the Economy Ministry said in a statement. (RTRS)

VENEZUELA: A London judge gave Venezuela's central bank permission to appeal parts of a U.K. court ruling that denied the Nicolas Maduro-controlled entity from retrieving $1 billion in gold held by the Bank of England. The dispute arose from the debate over who is Venezuela's president, and thus who has control over the country's gold reserves. (BBG)

AUTOS: Toyota Motor has asked suppliers to lower prices on certain parts, citing sluggish sales and a drop in material costs amid the coronavirus, Nikkei has learned, in a move that could hit earnings in the sprawling supply chain of one of the world's largest automakers. (Nikkei)

EQUITIES: HSBC Holdings Plc, responding to media reports over its dealings with Huawei Technologies Co., denied that it "framed" the Chinese telecom giant, and said it didn't spark a U.S. probe of the company. In its first public comments about Huawei's legal battle in North America, the U.K. bank said it has no "hostility" toward Huawei and didn't "ensnare" the company. The bank said it only provided information to the U.S. Department of Justice when it was compelled to do so. (BBG)

EQUITIES: After a dreadful March quarter for Asian corporations, investors are bracing for another wave of reporting cards that will reflect the first full three-month period during the worst virus outbreak in living memory. More than 280 companies on the MSCI Asia Pacific Index are expected to report results next week, and the number will continue to climb in August. The members on the gauge that have reported second-quarter earnings so far saw an average decline of 73% on year, according to data compiled by Bloomberg. That's after a 64% fall in the previous three-month period, which was the worst in data going back to 2011. (BBG)

METALS: International copper prices are rapidly recovering, with three-month futures on the benchmark London Metal Exchange hitting a two-year high of $6,633 per metric ton on July 13. Copper prices often reflect the health of the global economy, hence the moniker "Dr. Copper." Taken at face value, recent price movements on the LME mean the global economy has recovered to where it was before the coronavirus struck. But this time, maybe Dr. Copper is wrong. (Nikkei)

OIL: Mexico has asked top Wall Street banks to submit quotes for its giant oil hedging program, sources familiar with the matter said on Friday, while trading in crude oil options has increased this week ahead of the megadeal. The finance ministry has asked banks for price quotes, one source with direct knowledge of the matter said, signaling the beginning of the process to execute the hedge. The ministry was not immediately available for comment. Every year, Mexico buys as much as $1 billion in financial contracts, the world's largest oil hedge program, to protect its oil revenues. Bankers and officials on both sides of the deal expect a smaller hedge this year because the options used to protect oil profits are more expensive than last year. (RTRS)

OIL: India's oil imports fell in June, hitting their lowest since October 2011, as refiners curbed purchases due to maintenance turnarounds and weaker fuel demand, data from industry sources showed. India, the world's third biggest oil consumer and importer, received 3.2 million barrels per day (bpd) oil in June, a decline of 0.4% from May and about 28.5% from a year ago, the data showed. Last month, India did not import oil from Venezuela for the first time since June 2009, the data also showed. (RTRS)

OIL: Cenovus Energy Inc. is taking advantage of a plunge in the price for credits that allow the oil-sands company to produce more than output limits imposed by Alberta. For August, those credits are trading at about $1.25 a barrel, compared with $7 or more before the global pandemic, according to people familiar with the market who asked not to be named because the prices aren't public. (BBG)

ENERGY: The U.S. is increasing diplomatic pressure on European contractors to drop out of the Nord Stream 2 pipeline project, Welt am Sonntag reported. A dozen U.S. officials from three government departments held one-on-one video conferences in recent days with European contractors to underline their aim to stop the pipeline from Russia to Germany, the German newspaper said, without citing anyone. (BBG)



JAPAN Q1, F CAPEX +0.1% Y/Y; FLASH +4.3%






CORONAVIRUS: China reported the largest number of domestic infections in more than four months as it battles outbreaks in its western and northeastern regions, raising fears of a serious resurgence. The jump in cases is the worst flareup since China contained its first epidemic in March, which centered on Wuhan in Hubei province where the virus first emerged last year. Of the 61 infections reported Monday, 57 were local cases with 41 of them in Xinjiang, the politically fraught western province where China's treatment of the local Muslim Uighur population has come under global criticism. The rest were found in and around northeastern Liaoning province, centered on its port city of Dalian. Cases linked to Dalian have already spread to several cities across the three northeast provinces, as well as the southern province of Fujian. (BBG)

CORONAVIRUS: The Global Times tweeted the following on Saturday: "Shenzhen has suspended mutual recognition of quarantine&medical observation policy with HK. #HK residents who arrive in #Shenzhen in 24 hrs after they finish 14-day quarantine in HK still need to go through another 14-day medical observation in Shenzhen since Sat: local authority." (MNI)

CORONAVIRUS: The Global Times tweeted the following on Sunday: " #Dalian authorities said all nursing homes will be under strict management from Saturday to reduce the virus spreading risks, including suspending all visitors from entering nursing homes." (MNI)

ECONOMY: Beijing will offer 1.5 million coupons in an effort to spur consumption that is recovering from the COVID-19 epidemic, the Beijing Municipal Commerce Bureau said Saturday. The coupons will be available on Sunday at e-commerce giant They include 1 million coupons that can be used at participating restaurants and retailers in Beijing as well as 500,000 coupons for buying products equipped with smart technologies. The city will also launch nighttime activities in key shopping areas to boost consumption. (Xinhua)

ECONOMY: Exhibitors of the third edition of the China International Import Expo will enjoy two new customs policies which will make it easier to import exhibits and sell them after the expo. Ye Jian, deputy head of Shanghai Customs, introduced the facilitation policies at a news conference on Friday, which include a new type of customs guarantee for exhibits, and an authorization of selling the exhibit on cross-border e-commerce platforms after the expo. For foreign exhibits to clear customs, companies are required to provide guarantee to ensure that they comply with laws on tax duties. "Instead of paying deposits, the companies can use customs guarantee insurance this year for their exhibits, which will not occupying their capital," Ye said. "The time for goods clearance is also relatively short for customs guarantee insurance." The other supporting policy will allow exhibitors to transfer their exhibits to customs special supervision zones or bonded logistics centers and then sell them on cross-border e-commerce platforms. (China Daily)

YUAN: The Global Times tweeted the following on Saturday: "The trading volume in China's #forex market hit 17.7 trillion yuan ($2.5 trillion) in June, the State Administration of Foreign Exchange said on Sat. In H1 2020, the turnover of China's forex market totaled 92.66 trillion yuan." (MNI)

BANKING: Chinese banks are under increasing regulatory pressure to cut structured deposits this year by trillions of yuan, the Shanghai Securities News reported. Authorities are targeting structured deposits because they have pushed up banks' debt-servicing and financing costs, reducing their ability to properly serve the real economy, the newspaper said. Chinese banks' structured deposits plunged in June under sustained supervisory pressure, dropping by about CNY1 trillion in May to a remaining balance of CNY10 trillion at the end of last month, the newspaper said. (MNI)

HOUSING: China's housing regulations are likely to be tightened in H2 and local authorities are unlikely to be allowed to relax the rules as they did in HI, the 21st Century Business Herald reported. This signal was given by Vice Premier Han Zheng, who said at a recent meeting on housing that houses are not for speculation and the government would not use real estate as a stimulus, the newspaper said. (MNI)

HOUSING: A second Chinese city has tightened home-buying rules days after top policy makers warned of the risks of an overheating real estate market. Dongguan, an industrial center in China's Pearl River Delta, on Monday said that non-residents must work for at least 12 months in the city before they can buy an existing home. Shenzhen, the tech hub where home prices have surged, tightened rules on property transactions earlier this month. Chinese policy makers reiterated that the property sector won't be used as short-term stimulus to shore up the economy, state media reported Friday. Authorities will see that homes are used for living in and not for speculation, according to Xinhua, which cited a real estate forum chaired by Vice Premier Han Zheng. (BBG)

FLOOD: East China's Anhui Province on Saturday announced that 12 cities in the province had entered the emergency period of flood control from noon as continuous downpours have wreaked havoc across vast stretches of the country. The 12 cities on the banks of the Yangtze River, Huaihe River and Chaohu Lake include Hefei, Bengbu and Wuhu, according to the provincial flood control and drought relief headquarters. Currently, the main courses of the Yangtze River and Huaihe River in Anhui have been flowing above warning levels, and the water level of Chaohu Lake is at its highest in history, the headquarters said. (Xinhua)

EQUITIES: A securities analyst, surnamed Li, said Friday's decline was partly a correction, as the market had started to soar on July 1. According to data from industry data provider Wind, the Shanghai Composite Index rose 3.58 percent by Thursday this week; the Shenzhen Component Stock Index increased by 5.12 percent, and ChiNext climbed 5.8 percent. "The A-share market may experience an adjustment of two weeks, but long-term growth prospects remain unchanged backed by China's fast economic recovery," Yang said, noting that the Chinese GDP may rise by 5-6 percent in the second half of the year. (Global Times)

EQUITIES: The Global Times tweeted the following on Saturday: "Hao Yusheng, chief representative of #NASDAQ China, remains optimistic that more Chinese companies will file for IPOs in the #US in 2021, while they are likely to find more options on the A-share or HK markets in the middle term." (MNI)



The People's Bank of China (PBOC) injected CNY100 billion via 7-day reverse repos with the rate unchanged on Monday, offsetting the maturing CNY100 billion reverse repos and leaving liquidity unchanged, according to Wind Information.

  • This aims to keep the total liquidity reasonable and ample, the PBOC said on its website.
  • The 7-day weighted average interbank repo rate for depository institutions (DR007) rose to 2.2093% at 0923 local time from the close of 2.1025% on Friday: Wind Information.
  • The CFETS-NEX money-market sentiment index closed at 38 on Friday vs 35 on Thursday. A higher index indicates increased market expectations for tighter liquidity.



SNAPSHOT: Below gives key levels of markets in the second half of the Asia-Pac session:

  • Nikkei 225 down 18.77 points at 22732.84
  • ASX 200 up 17.701 points at 6041.7
  • Shanghai Comp. up 2.902 points at 3199.67
  • JGB 10-Yr future down 5 ticks at 152.33, yield up 0.1bp at 0.02%
  • Aussie 10-Yr future down 3.0 ticks at 99.085, yield up 2.6bp at 0.892%
  • U.S. 10-Yr future +0-00+ at 139-19, yield down 0.32bp at 0.586%
  • WTI crude up $0.03 at $41.32, Gold up $29.86 at $1931.93
  • USD/JPY down 48 pips at Y105.66

BOND SUMMARY: T-Notes consolidated in a tight range in Asia-Pac hours, once again, a
little more insulated than e-minis, with familiar sources of risk at the fore
(as has been discussed elsewhere). Contract +0-01 at 139-19+, with
cash yields printing 0.1-0.6bp richer across the curve. Short-end trade
saw 3.0K of Q0 SOFR futures sold against Fed Funds futures.

  • JGB futures have traded lower than settlement during Tokyo hours,
    last -2, with some underperformance evident in the 7-20 Year sector
    of the cash curve for most of the day. 10-25 Year Rinban ops saw a
    widening of spreads, cover ratio virtually unch.
  • The long end of the Aussie curve blipped lower as the AOFM
    announced the formal launch of its new ACGB June -51, via
    syndication. Some suggested that the fact that the AOFM will hold
    off on further issuance of the line until at least Nov may drive lumpy
    issuance size when the bond prices tomorrow. Curve little steeper on
    the day, but has recovered from intra-day steeps. YM -1.0, XM -2.0.

BOJ: The BOJ offers to buy a total of Y120bn of JGB's from the market, sizes
unchanged from previous operations:

  • Y120bn worth of JGBs with 10-25 Years until maturity

AUSSIE BONDS: The AOFM announces the issue by syndication of a new 1.75% 21 June 2051 Treasury Bond. The issue will be the new 30 year bond and will be of a benchmark size. Initial price guidance for the issue is a spread of 98 to 105 basis points over the implied bid yield for the primary ten-year Treasury Bond futures contract. The issue is expected to be priced on Tuesday, 28 July 2020 and settle on Wednesday, 5 August 2020. ANZ, Commonwealth Bank of Australia, Deutsche Bank, J.P. Morgan Securities Australia Limited and UBS AG, Australia Branch will act as Joint-Lead Managers for the issue. There will be no further issuance of this Treasury Bond prior to November 2020. The AOFM will be mindful of the performance of the bond when considering the timing of future issuance. (AOFM)

EQUITIES: Equities traded mixed in Asia-Pac hours, with a weaker USD allowing e-
minis to recover from their early lows, despite domestic fiscal headwinds
in the U.S., bubbling Sino-U.S. tensions and broadening COVID-19 worry.

  • Japanese equities underperformed, as Tokyo played catch-up after
    the elongated holiday weekend, although the Nikkei 225 trades well
    clear of its early lows, benefitting from the broader market dynamics
    that were observed. There was little in the way of broader risk
    positive news flow evident, outside of some positive COVID-19
    vaccine developments, with the uptick in e-minis seemingly linked to
    the broader USD move that came well before those headlines. The
    remainder of the major regional equity indices were marginally higher
    in Asia-Pac hours.
  • Nikkei 225 -0.4%, Hang Seng unch., CSI 300 +0.3%, ASX 200 +0.1%.
  • S&P 500 futures +14, DJIA futures +123, NASDAQ 100 futures +57.

OIL: WTI and Brent sit ~$0.10 below their respective settlement levels as we
grind towards European hours, with a softer USD allowing the major
crude benchmarks to recover from worst levels in Asia-Pac hours.

  • COVID-19 matters continue to provide headwinds for the space,
    stalling crude's multi-month recovery, with fresh outbreaks across the
    globe eyed by participants.
  • Elsewhere, in terms of market specifics, Friday saw RTRS sources
    note that "Mexico has asked top Wall Street banks to submit quotes
    for its giant oil hedging program." A reminder that the country's
    hedging scheme is the largest in the world.

GOLD: A softer greenback propelled the yellow metal to fresh all-time highs in
Asia-Pac trade, with U.S. fiscal jitters and fresh pockets of COVID-19
worry providing further support for bullion in early trade this week, and
little to counter these factors. Spot last dealing just shy of $1,930/oz.

FOREX: USD was the big mover overnight, as it started the week with a nosedive.
Sino-U.S. tit-for-tat consulate closures inspired JPY demand early on, which
sent USD/JPY to fresh cycle lows. The spot continued to slide, even
as broader JPY strength waned, while a surge in gold and concerns over
U.S. fiscal matters kept denting DXY, pushing it to a 22-month low.

  • USD sales helped USD/CNH probe the water below the CNH7.0 mark, in spite
    of a softer than expected PBoC fix and persistent Sino-U.S. jitters. A jump in
    Chinese industrial profits may have helped the redback.
  • The Antipodeans recouped initial losses, with AUD looking through comments
    from RBA Asst Gov Kent. The official stuck to a familiar script, expressing
    preference for a weaker AUD, but noted that the currency trades in line
    with fundamentals.
  • NOK led gains in G10 FX space, even as its oil-tied peer CAD landed
    towards the lower end of the pile.
  • Focus turns to German Ifo Survey and flash U.S. durable goods orders.

FOREX OPTIONS: Expiries for Jul27 NY cut 1000ET (Source DTCC)

  • EUR/USD: $1.1525-30(E749mln), $1.1600(E546mln)
  • USD/JPY: Y107.00-20($1.6bln)
  • AUD/USD: $0.7085-00(A$572mln)
  • USD/CAD: C$1.3400($600mln)

UP TODAY (Times GMT/Local)

MNI London Bureau | +44 0203-865-3809 |

To read the full story



MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.