Archives of “September 25, 2020” day

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Japan PM Suga: International students to be allowed into the country from October

  
  Analysis

Comments by Japan prime minister, Yoshihide Suga

This ties back to the earlier announcement here, where Japan is easing entry restrictions for foreign long-term residents starting from 1 October as well. International students will also be allowed back into the country as it seems, so that will see a pick up in new arrivals into the country over the next few months.

Evergrande, China’s No.2 property developer, warned it faces a cash crunch

  
  Analysis

Evergrande warned of cash troubles yesterday and fear is spreading Friday in China

  • The group’s 4 yr bond has been halted in trade
  • Shares traded up but have given back their gains today.
The group warned Chinese officials it faces a potential default. Fears are such a large default could become a systemic issue.
Issues at Evergrande are not out of the blue, this particular concern has been bubbling since at least late August.
Evergrande is seeking approval to list on the Shenzhen stock exchange by January 31. If investors refuse to extend the deadline, Evergrande will need to repay as much as around $19bn, equating to circa to 92% of its cash and cash equivalents.
Stay tuned.

Democrats float new $2.4T US stimulus bill

  
  Analysis

Bloomberg report

I can’t see that number going anywhere when Senate Republicans were working on a $500m bill. I doubt this is a genuine attempt to make a deal rather than another attempt to play politics and cast the Republicans as holding up the stimulus.
Bill would include:
  • Airline and restaurant aid
  • New PPP funds
  • New small business aid funds
The headlines are just crossing, I’ll have more details as they become available.
The House has already passed a $3.4T bill but they’ve come down to around these levels in negotiations and indicated an openness to go down further but Republicans aren’t willing to go above $1T. Aside from the dollar figure, the contents of a bill may also vary widely.
On top of all this, the House isn’t even going to be in session until the election and many members will be campaigning.
Update: Reuters cites the House ways and means chairman who says they’re working on a $2.2T bill. That’s closer but there’s no way the gap with the Senate is bridged.

Mexico lowers benchmark rate to 4.25% from 4.50%

  
  Analysis

There was some confusion about this

The Banco de Mexico cut rates to 4.25% from 4.50%. This was a generally expected move but it wasn’t unanimously expected by economists with 4 of 23 in the Bloomberg survey calling for no change.
The vote was unanimous at the central bank.
Since the last monetary policy decision, the Mexican peso appreciated slightly, although it has recently been subject to episodes of high volatility, while short-term interest rates decreased and long-term ones exhibited minor adjustments. After having contracted markedly in April and May, economic activity in Mexico began to recover in June and July, although an environment of uncertainty and downward risks prevails. Ample slack conditions are expected throughout the time frame in which monetary policy operates.
USD/MXN has risen sharply for four straight days and was higher today until the turn in sentiment. There has been some mild peso selling on these headlines but that coincides with another small slip in sentiment more broadly.
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