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In Europe 5th June 2020

Quarantine Drives Eurozone’s Retail Sales To Record Lows

Bankia Estudios | Retail sales again recorded a sharp decline in April (11.7% vs 11.1%), driven down to an all-time low. By items, the rise in online sales stands out, showing a significant increase (10.9% vs. 0.7%), pointing to a change in the pattern of consumer behaviour. This could, in part, be consolidated in the medium term, although it is too early to draw conclusions. The rest of the items recorded sharp falls, although of lesser intensity than in March.

World economy 5th June 2020

OPEC+ Will Extend Supply Cuts And Continue To Monitor Their Effects

Renta 4 | Finally OPEC+ may have reached a tentative agreement to extend production cuts and the member countries could meet as soon as this weekend to sign it. Saudi Arabia and Russia wanted a firm commitment from those countries which were evading their quotas. So they have finalised an accord with Iraq to meet not only its share of the cuts, but even to compensate for past breaches.

World economy 5th June 2020

US Stimulus Should Limit GDP Contraction This Year To 3.8% And An Above-Consensus 5.3% Rebound Next

David Page (AXA IM) | Yet even on our relatively bullish assessment the US economy will close 2021 1.7% below the level of GDP it would have achieved with potential growth from end-2019. This suggests the US economy would still exhibit spare capacity – a higher level of unemployment than at the start of 2020 and lower capacity utilisation, something that is likely to leave the Federal Reserve struggling to achieve its 2% inflation target – let alone anything higher.

In Europe 4th June 2020

Lagarde Has Done Another Good Job

Olivia Álvarez (Monex Europe) | The ECB delivers on market expectations and steps up the total amount of quantitative easing under PEPP purchases by €600 billion. The rise outperformed the consensus call by at least some €100 billion, bringing along a stronger-than-expected market reaction. The program firepower, worth €1.35 trillion now, is set to channel the main recovery mechanism by the ECB, which is vocally reinforcing its accommodative stance amid the current recession environment.

In Europe 4th June 2020

The German Rescue Fund Reaches €1.3 Tr (4% GDP), By Far The Largest In Europe

In Germany, Angela Merkel has announced a 130 billion euro stimulus package to combat the crisis caused by the pandemic. After the second day of negotiations, the German coalition government has managed to agree on an aid programme to be implemented between this year and next, which will be added to the one launched in March, valued at 156 billion euros, exceeding the initial estimates of 50-100 billion.

In Spain 4th June 2020

Spain Will Have To Take Extraordinary Measures Before September To Ensure The Payment Of Pensions

Feel Capital | Until September, the government will have pay out over €39.4 billion euros in benefits to the more than 9.8 million pensioners in Spain, as well as to people claiming widowhood, permanent disability, orphanhood and family favour benefits. As a result, it will be forced to take extraordinary measures this summer after the emptying of the pensions’ piggy bank.

World economy 4th June 2020

Why The US Dollar Remains Crucial For Hong Kong’s Economic Prosperity

via The Conversation | One important pillar of Hong Kong’s economy remains unchanged and outside of Chinese government control – its currency, which is pegged to the US dollar via a currency board. This could have significant benefits for the city as it tries to deal with pressing socioeconomic challenges. But this also requires more public spending from the special administrative region’s government.

World economy 3rd June 2020

Earlier OPEC+ Meeting Could Set Stage For Production Cut Extension

Nitesh Shah (Wisdoom Tree) | OPEC+ had been readying itself for an earlier-than-originally scheduled meeting. That drove oil prices higher. However, disputes about compliance levels with quotas are casting doubt on moving the meeting to 4th June. If the meeting does go ahead this week, oil prices are likely to recoup intra-day losses on 3rd June. That could take Brent above US$40/bbl and WTI above US$38/bbl.

Markets 3rd June 2020

JDE Peet’s, The World’s Second Largest Coffee Producer, Kicks Off 2020 IPOs

The EY Global IPO Trends report for the first quarter of 2020 noted how global IPO activity dropped dramatically in March, due to the pandemic. So the report considers IPO activity would not improve “at the earliest” until the second half of 2020. And it seems to have hit the mark, with the Dutch company Jacobs Douwe Egberts (JDE), the world’s second largest coffee producer started trading last week. It is the first major IPO of 2020, raising a total of €2.25 billion.