Worldwide: Headlines
Green shoots welcome but recovery still a long road, Fed’s Powell says
WASHINGTON (Reuters) – A full U.S. economic recovery will not occur until the American people are sure that the novel coronavirus epidemic has been brought under control, Federal Reserve Chair Jerome Powell said on Tuesday, as he began the first of two days of hearings before U.S. lawmakers.
While recent signs of improvement including a surprise gain in employment and a record rise in retail sales last month are encouraging, the damage inflicted by forced economic shutdowns to curb the spread of the virus has left a very deep hole to fill, especially on the employment front, Powell said.
“Something like close to 25 million people have been displaced in the workforce, either partially or through unemployment and so we have a long road ahead of us to get those people back to work,” Powell told the Senate Banking Committee.
Later in the day, Fed Vice Chair Richard Clarida made clear that it’s not just the labor market the Fed is worried about.
Inflation expectations, already low at the start of the recession, are “at risk of falling below” the Fed’s 2% inflation goal, Clarida said in remarks prepared for delivery to the Foreign Policy Association in New York. “I will place a high priority on advocating policies that will be directed at achieving not only maximum employment, but also well-anchored inflation expectations.”
Falling inflation can drag on economic growth and make it harder for the central bank to stimulate the borrowing and spending that could pave the way for more hiring.
Full Coverage: Reuters
Dollar firm after retail sales jump fans recovery hopes
TOKYO (Reuters) – The dollar held firm against many of its rivals on Wednesday after U.S. retail sales jumped far more than expected in May, while risk-sensitive currencies were hobbled by concerns about the coronavirus and diplomatic tensions in Asia.
Federal Reserve chairman Jerome Powell also doused some of the rosy expectations on Tuesday, as he painted a rather bleak picture of the U.S. economy.
The dollar index stood at 97.003, having risen about 0.4% on Tuesday.
The euro traded at $1.12635, having lost 0.5% on Tuesday and in consolidation after hitting a three-month high of $1.14225 a week ago.
The Australian dollar eased off 0.4% to $0.6861, slipping further from Tuesday’s high of $0.6977.
“In Asia, there is a bit of risk-off mood following a renewed outbreak of coronavirus in Beijing and also some geopolitical tensions in the region,” said Kyosuke Suzuki, director of currencies at Societe Generale.
Full Coverage: Reuters
China’s economic recovery from coronavirus in doubt as Beijing outbreak forces businesses to ‘wait and see’
Small business owners in Beijing who were beginning to see a light at the end of the tunnel are now taking a “wait and see” approach after the new coronavirus outbreak linked to the Xinfadi food market put China’s capital city in a “wartime” contingency mode.
Over 100 cases have now been traced back to the sprawling wholesale market since Thursday after the city had previously gone 55 days without a locally transmitted case.
“We’ll close the door for several days. There are now all kinds of inspections from above,” said a barber surnamed Li at his shop in Beijing’s Chaoyang district. “We’ll have to wait and see how long it is going to last.”
Li had seen long queues flock to his shop since mid-April, giving hope of recovering at least some of the lost business from the months of lockdowns earlier in the year, optimism which had been reflected in Monday’s national economic data released for May.
China’s overall retail sales still dropped 2.8 per cent last month from a year earlier, but the decline narrowed from 7.5 per cent in April and 20.5 per cent in January and February combined.
Car-related sales revenue rose 3.5 per cent from a year earlier in May, as many cities, including Beijing, relaxed purchase restrictions.
But with temperature and contact tracking checks returning to shopping districts like the popular Sanlitun area, uncertainties over the growth prospects for the world’s second largest economy continue.
Full Coverage: South China Morning Post
Coronavirus: China halts salmon imports over possible link to Beijing outbreak, as consumers leap to conclusions
China has halted imports from European salmon suppliers amid fears they may be linked to a coronavirus outbreak at a Beijing market, although experts say the fish itself is unlikely to carry the disease.
State-run newspapers reported that the virus was discovered on chopping boards used for imported salmon at Beijing’s Xinfadi market, at the centre of a cluster of infections that has sparked fears of a second wave of the pandemic in China.
The reports prompted major supermarkets in Beijing to remove salmon from their shelves.
“We can’t send any salmon to China now, the market is closed,” Regin Jacobsen, chief executive of Oslo-based salmon supplier Bakkafrost, told Reuters.
“We have stopped all sales to China and are waiting for the situation to be clarified,” said Stein Martinsen, head of sales and marketing at Norway Royal Salmon.
Genetic traces of the virus from the Beijing market outbreak suggested it could have come from Europe.
Full Coverage: South China Morning Post
Coronavirus leaves more Americans dead than WWI
With 740 new coronavirus deaths in 24 hours, the United States has seen more people die from the pandemic than died in World War I, according to a tally by Johns Hopkins University.
The new figure, counted at 8:30 pm (0030 GMT) Tuesday, brought the country’s total COVID-19 deaths up to 116,854, the tracker from the Baltimore-based university showed.
The increase came after two days of death tolls under 400.
And 23,351 new cases in the same 24-hour period brought the total US count up to 2,134,973, making it by far the hardest-hit of any country in the world.
The country’s pandemic death toll had already passed that of its soldiers in the Vietnam War in late April.
The United States, where many businesses are reopening, continues to register around 20,000 new cases of the novel coronavirus each day. Several states are even recording their highest levels of new cases since the start of the pandemic.
Full Coverage: Times of India
Trump signs order pushing to reduce US police violence
US President Donald Trump issued an order to improve policing Tuesday, calling for a ban on dangerous choke holds, but he stopped well short of demands made at nationwide protests against racism and police brutality.
“We have to break old patterns of failure,” Trump said in a Rose Garden ceremony attended by police and Republican congressional allies, though no black civil rights representatives or political opponents.
The president has limited power over policing, which is run mostly at a state and local level. However, Trump said that he would use access to federal funding grants as leverage to persuade departments “to adopt the highest professional standards.”
His executive order encourages de-escalation training, better recruitment, sharing of data on police who have bad records, and money to support police in complicated duties related to people with mental or drug issues.
A highlight of Trump’s proposals, which he said could be complemented by legislation being negotiated in the Republican-controlled Senate, was ending choke holds “except if an officer’s life is at risk,” he said.
Trump called his initiative “a tremendous step” toward “safe, beautiful and elegant justice.”
Full Coverage: The Jakarta Post
German minister, on Trump’s troop pullout plan, says security not a commodity
BERLIN (Reuters) – Security is not a commodity to be traded, German Defence Minister Annegret Kramp-Karrenbauer said on Tuesday in reaction to U.S. President Donald Trump’s plans to cut the number of U.S. troops in Germany.
On Monday, Trump accused Germany of being “delinquent” in its payments to the North Atlantic Treaty Organization and vowed to stick with the troop withdrawal plan unless Berlin changed course.
NATO in 2014 set a target that each of its 30 members should spend 2% of GDP on defence. Most, including Germany, do not.
“NATO is not a trade organisation, and security is not a commodity,” Kramp-Karrenbauer said during a discussion at the Konrad Adenauer Stiftung in Berlin.
“NATO is founded on solidarity, on trust. And it is based on common values and common interests.”
The reduction of about 9,500 troops to 25,000 would be a remarkable rebuke to one of Washington’s closest strategic and trading partners and could erode faith in one of the pillars of post-World War Two European security: that U.S. forces would defend fellow NATO members against any Russian attack.
Full Coverage: Reuters
North Korea rejects South’s offer of envoys, vows to redeploy troops to border
SEOUL (Reuters) – North Korea on Wednesday rejected South Korea’s offer to send special envoys to ease escalating tensions over defector activity and stalled reconciliation efforts, vowing to redeploy troops to demilitarised border units.
The announcements made by state media agency KCNA came a day after North Korea blew up a joint liaison office set up in a border town as part of a 2018 peace agreement by the two countries’ leaders.
Any moves to invalidate cross-border peace deals pose a major setback to South Korea’s President Moon Jae-in’s efforts to foster more lasting reconciliation with the North.
They could also complicate efforts by U.S. President Donald Trump, already grappling with the coronavirus pandemic and anti-racism protests, to persuade Pyongyang to abandon its nuclear and missile programmes.
On Monday, Moon offered to send his national security adviser Chung Eui-yong and spy chief Suh Hoon as special envoys, KCNA said. But Kim Yo Jong, the sister of North Korean leader Kim Jong Un and a senior ruling party official, “flatly rejected the tactless and sinister proposal”.
“The solution to the present crisis between the North and the South caused by the incompetence and irresponsibility of the South Korean authorities is impossible and it can be terminated only when proper price is paid,” KCNA said.
Full Coverage: Reuters
