Archives of “June 2020” month

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Fitch Revises India’s Outlook to Negative, Affirms IDR at ‘BBB-‘ Full Text

  
  Analysis
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Fitch Ratings has revised the Outlook on India’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to Negative from Stable and affirmed the rating at ‘BBB-‘.

 

KEY RATING DRIVERS

The revision of the Outlook to Negative on India’s Long-Term IDRs reflects the following key rating drivers:

The coronavirus pandemic has significantly weakened India’s growth outlook for this year and exposed the challenges associated with a high public-debt burden. Fitch expects economic activity to contract by 5% in the fiscal year ending March 2021 (FY21) from the strict lockdown measures imposed since 25 March 2020, before rebounding by 9.5% in FY22. The rebound will mainly be driven by a low-base effect. Our forecasts are subject to considerable risks due to the continued acceleration in the number of new COVID-19 cases as the lockdown is eased gradually. It remains to be seen whether India can return to sustained growth rates of 6% to 7% as we previously estimated, depending on the lasting impact of the pandemic, particularly in the financial sector.

The humanitarian and health needs have been pressing, but the government has shown expenditure restraint so far, due to the already high public-debt burden going into the crisis, with additional relief spending representing only about 1% of GDP by our estimates. Most elements of an announced package totalling 10% of GDP are non-fiscal in nature. Some further fiscal spending of up to 1 percentage point of GDP may still be announced in the next few months, which was indicated by a recent announcement of additional borrowing for FY21 of 2% of GDP, although we do not expect a steep rise in spending. (more…)

HK media: There may be no immunity against Covid-19, new Wuhan study suggests

  
  Analysis
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South China Morning Post  with the sobering news from a study at the epicentre of China’s coronavirus outbreak earlier this year.

The newspaper cites new research on antibodies by Chinese and American scientists, which concludes that humans may never develop immunity against Covid-19
  • study focuses on whether hospital workers in Wuhan who were directly exposed to infected patients at the early stage of the outbreak had developed antibodies
  • “People are unlikely to produce long-lasting protective antibodies against this virus,” the researchers concluded in a non-peer-reviewed paper posted on preprint website medRxiv.org
South China Morning Post  with the sobering news from a study at the epicentre of China's coronavirus outbreak earlier this year.

Some oil news ICYMI – US shale producers to boost oil output by 500,000 bpd by month-end

  
Analysis, Crude
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Reuters report on what analysts & some in the industry are expecting

  • Larger producers are re-opening the taps in low-cost plays in Texas, but also in expensive shale basins in North Dakota and Oklahoma.
  • “With prices where they are now, if they stay above $30, I wouldn’t expect any significant curtailments from us in Q3 or beyond,” Devon Energy Corp Chief Executive David Hager said at a J.P. Morgan energy conference on Tuesday.
This would be a rapid (albeit partial) bounce back from prior supply cuts in shale. It’ll add pressure back onto OPEC+ who recently agreed to extend their their output cuts. Supply coming back on line as prices rise … pretty textbook economics this.
Here’s the link to Reuters for more
Reuters report on what analysts & some in the industry are expecting

A US – UK trade deal is unlikely before the US presidential election in November

  
  Analysis

Greg posted the news earlier on the outlook for the free trade negotiations between the US and UK

Check out Gregs post for more info, and also this recap:
  • America’s top trade negotiator Robert Lighthizer’s says a deal with the UK is unlikely before the US presidential election in November.
  • “There are very, very fundamental issues that we have to come to grips with”
  • “I don’t want anyone to think this is going to be a rollover.”
Report with more via BBC, link here
Greg posted the news earlier on the outlook for the free trade negotiations between the US and UK

Major European indices in the session with mixed results

  
Analysis, Global Indices

Spain’s Ibex and Italy’s FTSE MIB lower

The European stock indices are closed and are ending with mixed results. The closes are showing:

  • German DAX, +0.54%
  • France’s CAC, +0.88%
  • UK’s FTSE 100, +0.17%
  • Spain’s Ibex, -0.22%
  • Italy’s FTSE MIB, -0.2%
  • Portugal’s PSI 20, +0.41%
Spain's Ibex and Italy's FTSE MIB lower_
In the European debt market, the benchmark 10 year yields are mostly higher with the exception of the UK yield which is down -1.8 basis points. Below are the high, low yields in the closing levels.
The 10 year yield
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