Archives of “May 12, 2020” day

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Spain orders two-week quarantine for incoming travellers from 15 May

  
  Analysis

All incoming travellers from overseas will be quarantined for two weeks

Spain

The travel ban to Schengen region will expire on 15 May, but the European Commission has asked countries to extend the restriction until 15 June at the earliest.

But as you can see with the case of Spain, they are not waiting to allow non-essential travel back into the country. And the issue here is going to be if there is no consistency in the approach that European countries will be taking in this regard.
Spanish authorities will at least impose a two-week quarantine period for incoming travellers but this will only apply to those entering the country during the period of 15 May to 24 May – when the state of emergency is due to end.
It’s a delicate situation since this could easily prompt travellers to just wait out the ten-day period and travel on 25 May to avoid any quarantine.

As for the rest of Europe, it makes things rather complicated as you have countries like France who has said that they will keep their borders closed until at least mid-June.

China’s health authority: Resurgence of virus clusters means now is not the time to relax measures

  
  Analysis

Comments by China’s health authority on the recent developments

Virus
  • While prevention and control measures have normalised, that does not mean they should be eased yet
The remark relates to the resurgence of local clusters of the coronavirus in recent days, which is prompting Wuhan – having lifted lockdown measures a month ago – to conduct a city-wide testing involving millions over a 10-day period.

EURCHF to parity?

  
Analysis, Forex

Via Bloomberg

Via Bloomberg  
The options market is pricing in the possibility of EURCHF below parity in 12 months time. The strength of the CHF is a constant concern for the Swiss National Bank keen to defend its export market.
 SNB, EURCHF floor, 1.200
The options pricing chimes with Thomas Jordan’s recent comments that the SNB are making a ‘substantial commitment regarding FX intervention and that they might cut interest rates further. Furthermore, sight deposits for the period ending May 8 showed a big increase.
Now, Thomas Jordan has said that the SNB is not thinking of imposing a new minimum exchange rate. Remember Jan 2015 and what a disaster that was when the SNB gave up defending the EURCHF peg?  However, don’t rule out a new minimum exchange rate for EURCHF indefinitely.
Here are some things to look out for that could prompt the SNB to act:
  • the pace of currency appreciation in the spot market
  • the franc’s real effective exchange rate
  • the depth of deflation in the nation (-0.3% is already factored in for 2020 in its bulletin)
  • the strength of inflows into the nations assets
One key think to remember, if the SNB do act, or do put in a new minimum level. just don’t over leverage. Remember, there are old traders and there are bold traders. However, there are no old, bold traders.

Nikkei 225 closes lower by 0.12% at 20,366.48

  
Analysis, Global Indices

The Nikkei closes a tad lower, but off earlier lows at least

Nikkei

The same applies to most Asian equities this morning, after softer tones prevailed in the early stages before stocks recouped some losses late in the day. This comes as US futures have also trimmed earlier losses of 0.8% to around 0.4% currently.

Elsewhere, the Hang Seng is down by 1.4% while the Shanghai Composite is down by 0.2% ahead of the closing stages today.
The yen is still leading the major currencies space, with USD/JPY down by 0.2% to 107.43.

Unpublished US data from the White House shows coronavirus infections spiking across the US

  
  Analysis
#  #  #  #  #  #  #

US media (NBC news) reporting on data undisclosed by the Trump administration

  • Coronavirus infection rates are spiking to new highs in several metropolitan areas and smaller communities
  • data in a May 7 coronavirus task force report, undisclosed by the adminstration
  • The 10 top areas recorded surges of 72.4 percent or greater over a seven-day period compared to the previous week, according to a set of tables produced for the task force by its data and analytics unit. They include Nashville, Tennessee; Des Moines, Iowa; Amarillo, Texas; and – atop the list, with a 650 percent increase – Central City, Kentucky.
—
Trump’s said on Monday that “all throughout the country, the numbers are coming down rapidly.” Even without this disclosure of the secret data hoard that claim is obvious bullshit.
WH death toll projections are rapidly moving toward realisation:
US media (NBC news) reporting on data undisclosed by the Trump administration

Federal Reserve says secondary market facility to start buying ETFs on Tuesday

  
  Analysis

NY Fed says secondary market corporate credit facility (smccf) will begin purchases of exchange-traded funds on May 12

  • says smccf may purchase US-listed TEFs whose investment objective is to provide broad exposure to the market for US corporate bonds
  • says preponderance of ETF holdings will be of ETFs whose primary investment objective is exposure to US investment-grade corporate bonds
  • says remainder ETF holdings will be in ETFs whose primary investment objective is exposure to US high-yield corporate bonds

More from Paul Tudor Jones – bullish gold and bitcoin

  
Analysis, BITCOIN, Gold / Silver
Gold:
  • has a portion of his portfolio invested in gold
  • could go “substantially higher” if inflation spikes
Bitcoin:
  • “When I think of bitcoin, look at it as one tiny part of a portfolio. Itmay end up being the best performer of all of them, I kind of think it might be,” he said. “But I’m very conservative. I’m going to keep a tiny percent of my assets in it and that’s it. It has not stood the test of time, for instance, the way gold has.”
  • has “just over 1% of my assets in bitcoin. Maybe it’s almost 2. That seems like the right number right now.”
  • “Every day that goes by that bitcoin survives, the trust in it will grow”
  • “if you take cash, on the other hand, and you think about it from a purchasing power standpoint, if you own cash in the world today, you know your central bank has an avowed goal of depreciating its value 2% per year,” Jones said. “So you have, in essence, a wasting asset in your hands.” Bitcoin, on the other hand, isn’t subject to the whims of government spending, but is itself risky because it’s only 11 years old
If only there was a way to combine gold with bitcoin … oh, wait … and look where its made!!!!
gold bitcoin wuhan

Here are the 6 risks Goldman Sachs says US equity investors are ignoring

  
  Analysis

Via a GS note from US equity strategists.

Goldman Sachs expects the S&P500 to be higher at year end, around 3,000. GS see the coronavirus scare receding and a rebound for the economy.
But, says the bank, the next 3 months will bring a near 20% decline, targeting around 2,400.
Says the decline could be triggered by a number of concerns and risks:
  1. Infection rates could increase outside worst-hit NY as states reopen their economies
  2. A drawn-out economic rebound
  3. Major US banks losing profits for loan-loss reserves … the labor market is now being hit harder and thus additional reserve will be required … more companies will cancel stock-buybacks (these have been aa major source of demand pushing the stockmarket higher over the past 10 years)
  4. Companies cutting dividend payments and also capex spending (which will slow corporate growth ahead)
  5. November presidential election policies (especially on corporate tax – Dems could reverse Trump’s corporate profit-friendly tax moves)
  6. US-China tensions being stoked further as Trump turns more aggressive in his China approach
Via a GS note from US equity strategists.
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