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July 06. Eurozone retail sales up 17.8% in May

According to the European statistical agency Eurostat, retail sales in the eurozone in May rose by 17.8% compared with 11.7% in April . Analysts had expected sales growth of 15%.

On an annualized basis, retail sales in the eurozone in the reporting month fell by 5.1%, although analysts had expected a decrease of 7.5%.

In all EU countries, sales in May increased by 16.4% compared with April, and decreased by 4.2% in annual terms.

The largest decline in sales in May was recorded in Bulgaria (-20.4%), Luxembourg (-19.7%) and Spain (-17.9%). The strongest growth was recorded in Germany (+7.2%), Denmark (+6.6%) and Austria (+4.8%).

 

July 08. The EC approved the plans of Germany to allocate 500 billion euros to help companies

The European Commission has announced that it has approved a plan by Germany to create a fund of 500 billion euros to help companies affected by the coronavirus pandemic. It is noted that with the help of this fund, companies will be able to get temporary access to government loans and investments.

The EC stated that it continues to work closely with EU member states in finding solutions to support and finance European companies, subject to all EU rules.

EC Executive Vice President Margret Westagher, who is responsible for competition policy, emphasized that assistance to companies will be determined by the necessary measures that will ensure compliance with competition rules.

 

July 14. The number of applications for unemployment benefits in the US fell to 1.314 million, better than forecast

According to the US Department of Labor, the number of initial applications for unemployment benefits for the week ending July 4, fell from a revised index of the previous week by 99 thousand, to 1.314 million.

Analysts had forecast a decrease to 1.375 million from the original weekly rate of 1.427 million. The initial figure has been revised to 1.413 million.

At the same time, the average number of initial applications over the past four weeks decreased by 63 thousand, to 1.437 million from the previous week's revised figure of 1.5 million. The initial figure was 1.504 million.

And the total number of people receiving unemployment benefits in the United States for the week ending June 27 fell by 698 thousand from the revised figure of the previous week to 18.062 million people.

 

15.07. Mexico announces completion of OPEC+ commitments and increased production

Mexican President Andres Manuel Lopez Obrador said the country has fulfilled its part of the OPEC+ deal and intends to begin to increase oil production. Mexico has already reduced production by 100 thousand barrels per day.

According to the agreement, Mexico reduced production by 9.7 million barrels per day from May to the end of June. In July, the contract was extended until the end of July. Since August, OPEC+ member countries are expected to reduce production by 7.7 million barrels for the period until the end of the year and by 5.8 million by the end of April 2022.

23 countries are involved in the agreement, however, Mexico initially insisted on separate commitments, agreeing to reduce production only in May-June by 100 thousand barrels per day instead of the 400 thousand offered to it.

It should be noted that in May Mexico even exceeded its obligations to the alliance: the commitment to the deal was 120%. And according to the International Energy Agency (IEA), in May the country exceeded its obligations even by 65%. In June, Mexico executed the OPEC+ deal 100%.

 

July 20. EU emergency summit lasts for four days

The EU summit, following which the leaders of the EU countries should discuss a package of assistance to restore the economy of the countries affected by the coronavirus pandemic, has been going on for four days. However, the parties cannot come to an agreement on many issues. Initially, the negotiations were supposed to be completed within two days.

It became known that Austria, Denmark, the Netherlands, Sweden and Finland opposed Brussels' intentions to allocate 500 billion euros from a 750 billion package on the basis of a grant. This position caused a sharp discontent of the President of France: E. Macron said that the actions of these countries are «selfish», and France is ready to leave the summit in case of the prospect of signing a «bad agreement».

At the same time, the President of the European Council Charles Michel proposed to reduce the share of grants to 400 billion euros.

On the eve of the fourth day of the summit, the Prime Minister of the Netherlands noted some progress in the negotiations. Mark Rutte said that the head of the European Council is working on a new proposal to deal with the economic consequences of the pandemic.

It's worth reminding, that the leaders of the EU countries have gathered to agree on a multi-year budget of more than 1 trillion euros, as well as a recovery plan, the size of which should be 750 billion euros.

 

July 21. India intends to store crude oil in the US

Authorities have announced that the country plans to store part of its crude oil reserves in the United States.

The government notes that India needs new strategic oil reserves of its own, but building them could take several years and huge financial resources.

The way out of the situation was the opportunity to rent American strategic storage facilities, moreover, that this would not entail large expenses. The oil that will be stored in the United States can be used by New Delhi both for its own needs and for sale on the world market. However, if oil prices fall during storage, India will suffer losses.

 

July 22. US exchanges open lower on fears of conflict escalation with China

At the auction on Wednesday, American stock indices generally show a decline, reacting to the likelihood of aggravation of relations between the US and China.

The Dow Jones Industrial Average (DJIA) fell 0.13% to 26805.38 points, while the S&P 500 broad market index fell 0.03% to 3256.26 points. At the same time, the NASDAQ index of high-tech companies rose by 0.28%, to 10709.84 points. The index was supported by expectations of financial statements for the last quarter of such American companies as Microsoft and Tesla included in the index. Since the beginning of the year, Tesla shares have risen in price by 3.7 times, and Microsoft – by 32%.

Investors drew attention to the news around the relationship between the United States and China. It became known that Washington ordered the closure of the PRC Consulate General in Houston in order to protect the intellectual property and personal information of Americans. In response, China is considering the likelihood of closing the US consulate in Wuhan.

 

July 23. Britain and the EU have not agreed on the basic principles of relations

The UK's chief Brexit negotiator David Frost said today that Britain and the EU have failed to reach agreement on key issues for a future trade deal. However, the politician still hopes for a successful conclusion of the negotiations in September.

Michel Barnier, the EU's chief Brexit negotiator, also noted that there is a high risk of not reaching any agreements with Britain. He also said that the current position of Britain in negotiations on a future partnership makes the possibility of a trade agreement unlikely. It is about the UK abandoning open and fair competition and a balanced fisheries agreement.

The next stage of negotiations is scheduled for August 17.

 

July 24. US stock exchanges decline on geopolitical risks and fears for the country's economy

According to the trading data, the main US stock indexes are declining on Friday, as investors assess the risks of the conflict between the US and China and doubt the prospects for the recovery of the US economy.

The Dow Jones Industrial Average (DJIA) fell by 0.57%, to 26501.72 points, the broad market S&P 500 index – by 0.62%, to 3215.7 points, the NASDAQ high-tech index – by 1.47%, up to 10307.8 points.

The pessimism in the markets was fueled by growing tensions between the world's two largest economies. Today, China has demanded that the US Consulate General in Chengdu, Sichuan Province cease operations. This demand was made in response to the closure of the Chinese Consulate General in Houston, USA.

Additional pressure on the market is exerted by fears for the recovery of the US economy. Investors speculate that an increase in the number of coronavirus cases in America and a new round of quarantine restrictions may again suspend economic activity in the country.

 

July 28. Fed extends lending programs until December 31

A two-day meeting of the US Federal Reserve System starts today, following which the regulator will make public its decision on the rate and further monetary policy.

At the end of the first day, the central bank announced that it is extending operations on seven emergency lending programs by three months, until December 31, in order to maintain activity during the coronavirus pandemic.

These programs were initiated in March and April until September. Program extensions should facilitate planning for potential program participants and provide certainty that these programs will continue to be available.

 

July 30. German GDP and quarterly losses hit the European market

On Thursday, the European stock market crashed after the publication of the German GDP report and disappointing macroeconomic data.

Germany's DAX traded 2.4% lower, to 12.516, France's CAC 40 fell 1.15%, to 4.901, and Britain's FTSE declined 1.65%, to 6.031.

Germany's GDP report reflected a 10.1% decline in the German economy, the sharpest drop in history.

Indicators of quarterly losses of European companies also had a detrimental effect on the dynamics of the European market. French carmaker Renault SA fell 2.8%, posting a record net loss of 7.29 billion euros in the first half of this year. Its German rival Volkswagen AG plunged 5.3%, posting an operating loss of 800 million euros in the first half.

Shares of the Italian oil company ENI SpA fell 3.5% after the company reported a loss in the second quarter and cut dividends. France's Total recorded an asset impairment of $8.1 billion in the second quarter, but retained dividends.

Only pharmaceutical companies showed growth. In particular, AstraZeneca gained 3.1% after reporting a second quarter net profit growth and testing of a coronavirus vaccine.

 

July 31. EU GDP collapses by record 14.4%

According to the statistical agency Eurostat, the GDP of the EU countries in the II quarter fell by 14.4% in annual terms. On a quarterly basis, the indicator decreased by 11.9%. In the first three months of the year, the EU economy contracted by 3.6%. Figures like these signal that the European economy has entered a recession.

Earlier in July, the European Commission presented its forecast for changes in Europe's GDP: experts expected the economy to decline by 8.3%.

At the same time, the economies of 19 eurozone countries contracted by 12.1% in the second quarter and by 15% – in annual terms. Analysts had expected a decline of 11.2% and 13.9%, respectively.

The fall in all indicators has become the sharpest and strongest since 1995 – since the beginning of statistics.

 

August 03. The PMI index of the industry of the eurozone in July rose to 51.8 points

According to the research organization Markit Economics, the index of business activity (PMI) in industrial production of 19 eurozone countries in July rose to 51.8 points against 47.4 points in June. Analysts predicted that the indicator would rise to the level of preliminary estimates of 51.1 points.

At the same time, industry PMI in Germany, according to final data, rose to 51 points from 45.2 points in June. PMI in France in July increased to 52.4 points from 52.3 points in June.

Analysts had expected the German index to rise to 50 points and the French to 52.

 

August 04. Gold rises in price on increasing geopolitical risks

On Tuesday evening, the price of gold started to rise sharply, reaching $ 2.001 per troy ounce. The growth driver was fears of further deterioration in relations between the United States and China.

Market participants continue to follow the news around the TikTok app, owned by the Chinese company ByteDance. Earlier, it became known that US President Donald Trump announced plans to ban TikTok on the grounds that this Chinese company, by law, must transfer user data to the PRC authorities.

Trump's actions are forcing TikTok to sell its US assets to an American company, which was seen by the Chinese authorities as another provocation and led to increased tensions between the two countries.

As a result, market players prefer to ditch risky assets in favor of safer ones, which traditionally include gold.

 

August 06. US unemployment claims data are encouraging

According to the US Department of Labor, the number of Americans who filed initial applications for unemployment benefits fell to 1.186 million last week after rising in the previous two weeks. Economists had forecast a smaller decline to $ 1.415 million.

The number of secondary applications from those who continue to receive benefits dropped to 16.107 million, down from the previous week by 1.951 million.

On Friday, investors await a more complete report on nonfarm payrolls. The report is predicted to show that an additional 1.6 million jobs were created in the labor market last month, or hiring fell sharply from a record 4.8 million in June.

 

August 07. US: 1.8 million jobs added in July, unemployment falls to 10.2%

According to the US Bureau of Labor Statistics, only 1.763 million jobs were created in the nonfarm economy. This signals that the recovery of the American economy after the coronavirus pandemic has slowed in July.

Forecasts assumed growth of 1.6 million jobs. Despite the fact that the current data exceeded analysts' expectations, there is a decrease in job growth compared to the jump in the previous month, when 4.791 million people were hired.

The report also reflected the current state of unemployment in the country. To date, the unemployment rate has dropped to 10.2% of the total working-age population, after 11.1% in June. Analysts predicted the growth rate to 10.5%.

 

August 10. US stock market opened with growth in hopes of new liquidity injections

The US stock market started the week in a positive mood amid hopes for a compromise on a new package of measures to support the population and the economy.

Treasury Secretary Steven Mnuchin said a deal with House Democrats this week is still possible, despite the failure of talks last week when the parties failed to agree on a $2 trillion bailout.

So, Donald Trump the day before decided to extend the payment of unemployment benefits in the amount of $400 per week and to suspend the income tax bypassing Congress.

As a result, the Dow Jones Industrial Average rose 190 points, or 0.7%, to 27.624 points. The S&P 500 rose 0.3% to hit 3.350, while the Nasdaq Composite rose 0.2% to 10.923. Shares of such companies as McDonald's Corporation, Eastman Kodak Co, Simon Property Group Inc also showed growth.

 

August 11. The rise in producer prices in the United States was the highest in almost 2 years

According to the US Department of Labor, producer prices in the country (PPI) in July 2020 rose by 0.6% compared to the previous month. This was the highest growth rate since October 2018. Analysts on average had expected an increase of 0.3%.

Such jump in prices is mainly due to the rise in energy costs amid the relaxation of restrictions imposed in connection with the coronavirus pandemic.

Compared to July 2019, the PPI index dropped by 0.4%. Experts had forecast a 0.7% decline.

 

August 13. US still can't agree on stimulus package

Negotiations between Republicans and Democrats in Congress on the next round of economic aid measures remain stalled.

House Speaker Nancy Pelosi said yesterday that the lower house is ready to negotiate with the Senate and the administration and reduce the difference between the proposed package of measures. The White House administration is offering $1 trillion, and the Chamber is offering $3.5 trillion.

However, US Treasury Secretary Steven Mnuchin called such a proposal «misleading» and said that Democratic negotiators were not yet ready for a compromise at all.

 

August 14. GDP of the European Union in the II quarter fell by a record 14.1%

According to the second estimate of the European statistical agency Eurostat, the GDP of the EU countries in the second quarter fell by 14.1% in annual terms. On a quarterly basis, the indicator decreased by 11.7%.

In the second quarter of the year, the economies of 19 eurozone countries contracted by 12.1% in quarterly terms and by 15% in annual terms. All indicators were in line with analysts' forecasts and the agency's first estimate.

Eurostat noted that the decline in all indicators was the strongest since the start of statistics in 1995. Thus, the European economy has been declining for two quarters, which suggests that Europe has entered a recession. In the first quarter of 2020, the decline in GDP of 19 eurozone countries amounted to 3.6% in quarterly terms and 3.1% in annual terms. The EU economy contracted by 3.2% in Q1 and 2.5% in annual terms in Q1.