CORONA FUCKING VIRUS
Covid-19 cases worldwide surpassed 10 million as rising infections in certain hotspots provide a fresh warning on reopening economies too quickly. Some of the more worrying statistics continue to come from the U.S., where Florida reported a 6.4% increase in infections Sunday and Arizona’s new cases topped the weekly average for the fourth day. One positive, though, was New York reporting the fewest fatalities in three months. In Europe, Italian deaths have stabilized, though Portugal reported its biggest daily increase in cases since May 8. Meanwhile, just as English pubs and restaurants prepare to swing open their doors on Saturday, there’s an ominous sign from one English city, Leicester, which could be put into local lockdown to stem the spread, according to Home Secretary Priti Patel.
USA
A cash cliff spells trouble for U.S. unemployed, and everyone else Judith Ramirez is bracing for July. That’s when the hotel housekeeper and her electrician husband – who have both been out of work for three months – expect their combined unemployment benefits to drop by more than half, and their deferred $1,500 monthly mortgage payment on their Honolulu home to come due. It’s a cash cliff millions of Americans face this summer as the emergency benefits — which lifted U.S. consumer incomes by a record 10.8% in April — expire.
Trade war
As bad as U.S.-China ties look now, things could get even worse this week. Relations between the world’s biggest economies have plummeted since a phase-one trade deal was clinched in January, due mostly to a global pandemic that has eroded Trump’s reelection prospects. With trade well below the agreed targets, the countries have blacklisted each other’s companies, barred flights, and expelled journalists.
Trump last month vowed a tough response to China’s Hong Kong law, and the U.S. unleashed a preemptive blow on Friday with visa bans on certain Communist Party officials. Today China reciprocated in kind.
U.S. food exporters sign safety declarations instead of virus-free guarantees U.S. food and feed exporters are shipping goods to China with letters assuring the safety of their cargo instead of official declarations requested by Chinese authorities that guarantee coronavirus-free shipments, a U.S. agricultural export group said on Friday. The commitment statements, drafted by the Agriculture Transportation Coalition (AgTC), are meant only to assure importers that shipments have been harvested, processed, and handled consistent with industry safety standards and guidelines from medical experts.
OIL
Oil prices slid on Monday as sharp spikes in new coronavirus infections around the world forced some countries to resume partial lockdowns, raising concerns about the pace of economic recovery and fuel demand.
AUD
Iron ore, gold are keeping Australia’s luck from running out: Russell Iron ore and gold may seem unlikely bedfellows, but in the current coronavirus pandemic they are combining to try and hold up Australia’s reputation as the “lucky country”. While the country’s unbroken 29-year stretch of economic growth will be ended by the pandemic, the resource sector is proving to be key in cushioning the blow and likely ensuring Australia outperforms other developed economies.
AUDUSD vs XAUUSD vs Iron Ore
Speculators raised bullish bets on COMEX gold, silver -CFTC Hedge funds and money managers increased their bullish positions in COMEX gold and silver contracts in the week to June 23, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday. The speculators also increased their net long position in copper futures and options, the CFTC data showed.
Chilean mines minister sees a 3.5% drop in copper output as coronavirus impact grows Chile’s mines minister Baldo Prokurica on Friday cited figures projecting a decline in the country’s copper output of 200,000 tonnes as a result of the growing impact of the new coronavirus on the industry. Prokurica said the Cochilco copper commission’s projection, representing around 3.5% of Chile’s total 2019 production, was the best guess since the combined impact of the virus and economic fallout made it “very difficult” to predict with certainty.
Australian lobby Beyond Zero Emissions outlined a road map to create 1 million jobs in clean energy, involving fast-tracking renewable power projects, improving energy infrastructure, and using wind and solar to power the manufacturing industry. The nation lost more than 800,000 jobs in April and May because of restrictions to stem the pandemic.
AGRICULTURE
Funds boost bullish soy bets but shun corn and wheat -Braun Speculators continued buying Chicago-traded soybeans last week on improved prospects for U.S. trade with China, though benign U.S. weather forecasts turned them back into corn sellers after a brief round of short covering in the previous week. In the week ended June 23, money managers increased their net short position in CBOT corn futures and options to 277,479 contracts from 270,751 a week earlier, according to data from the U.S. Commodity Futures Trading Commission.
Funds raise long position in raw sugar, boost short bet in coffee Speculators raised a net long position in raw sugar on ICE Futures U.S. in the week to June 23 by 17,453 contracts to a total long of 40,081 contracts, data from the U.S. Commodity Futures Trading Commission (CFTC) showed on Friday. They have increased their short bet in arabica coffee futures on ICE by 3,516 contracts for a total short of 27,669 contracts by June 23, CFTC data showed
Ghana receives the first $200 million of a syndicated loan to cocoa sector Commercial lenders and development finance institutions have disbursed the first $200 million of a $600-million syndicated loan to support Ghana’s cocoa sector, the African Development Bank (AfDB) said on Friday. The loan deal was signed in November and is intended to help Ghana, the world’s number two cocoa producer, raise yields and boost production. The lenders include the AfDB, the Japan International Cooperation Agency, and Credit Suisse.
GBP
U.K. Prime Minister Boris Johnson vowed to spend large sums on hospitals, schools, and roads to jumpstart a British economy that’s been battered by the new coronavirus. In an interview in the Mail on Sunday, he rejected a return to the austerity policies that followed the 2008 financial crisis.
S&P 500
Just when it seemed the market mood was turning in their favor, hedge funds have pulled the ripcord on their bearish U.S. stock bets. Speculative investors bought a net 200,000-plus S&P 500 Index E-mini contracts in the week to June 23, the most since 2007, according to the latest Commodity Futures Trading Commission data. Net short positions in e-minis had grown to their highest in almost a decade, as the U.S. equity rally stalled amid fresh concerns about another wave of coronavirus infections. With quarter-end upon us, there could be an element of portfolio repositioning behind the move — the bearish bets are not necessarily outright ones but often act as hedges or part of a pair trade. There could also be a realization that the equity market wasn’t cracking, even as the U.S. virus spread intensified. Whatever the reason, the gauge of hedge-fund positioning will remain closely watched as we move into July — the potential for short-covering was one of the factors bulls believed could push the U.S. stock benchmark to fresh highs.
E-MINI SP 500 STOCK INDEX
CHART OF THE DAY
Data due tomorrow are expected to show an uptick in euro-area inflation to 0.2% in June, according to consensus. That’s not likely to bring much comfort to ECB policymakers. Isabel Schnabel warned over the weekend that regional price trends may dip below zero in the coming months. “Inflation could remain at close to 0% well into the next year, and even negative inflation rates are possible,” she said.
