WORLDWIDE : HEADLINES
Global airlines less hopeful on COVID-19 recovery
PARIS/SYDNEY – Global airlines cut their coronavirus recovery forecast on Tuesday, saying it would take until 2024 – a year longer than previously expected – for passenger traffic to return to pre-crisis levels.
In an update on the pandemic’s crippling impact on air travel, the International Air Transport Association (IATA) cited slow virus containment in the United States and developing countries, and a weaker outlook for corporate travel.
Lingering travel barriers and new restrictions in some markets are also weighing on nearer-term prospects, IATA said, cutting its 2020 passenger numbers forecast to a 55% decline – sharper than the 46% drop predicted in April.
“The second half of this year will see a slower recovery than we’d hoped,” IATA Chief Economist Brian Pearce said. June passenger numbers were down 86.5% year-on-year, the organisation said, after a 91% contraction in May.
Full coverage : REUETRS
Malaysia’s Najib sentenced to over a decade in jail in 1MDB trial
KUALA LUMPUR – Malaysia’s former leader, Najib Razak, was found guilty of corruption and sentenced to 12 years in jail on Tuesday in the first trial over a multi-billion-dollar scandal at state fund 1MDB that stretched to the Gulf states and Hollywood.
In a case widely seen as a test of the nation’s resolve to stamp out corruption and which could have major political implications, high court judge Mohamad Nazlan Mohamad Ghazali sentenced Najib to 12 years and a fine of 210 million ringgit ($49 million) for abuse of power.
Najib, 67, also received 10 years in jail on each of three charges of criminal breach of trust and three charges of money laundering for illegally receiving nearly $10 million from SRC International, a former unit of the state fund.
“After considering all evidence in this trial, I find that the prosecution has successfully proven its case beyond a reasonable doubt,” Mohamad Nazlan said.
He ordered the jail terms to run concurrently.
Full coverage : REUETRS
WORLDWIDE : ECONOMY / FINANCE / STOCK MARKET
Japan to forecast real GDP will shrink around 4.5% in FY2020: Nikkei
TOKYO – The Japanese government will forecast real gross domestic product (GDP) contracted around 4.5% for the fiscal year to March 2021, revising its pre-coronavirus projection for a 1.4% expansion, the Nikkei business daily reported on Wednesday.
The world’s third-largest economy is seen recovering in the current quarter after an expected sharp slump in April-June as the coronavirus crisis put the brakes on global growth and Japan’s state of emergency prompted people to stay at home and businesses to close.
For the next fiscal year from April 2021, the government will forecast real GDP growth of around 3.5% as efforts to manage the spread of the coronavirus and economic activity will be balanced, according to the report.
The government has set a target to raise Japan’s nominal GDP to 600 trillion yen ($5.71 trillion) by around 2020 but it will be delayed to around 2023, the report said.
Full coverage : REUETRS
Dollar teeters, gold takes a breather as markets await Fed
SINGAPORE/NEW YORK – The U.S. dollar hovered just above a two-year low on Wednesday, while stocks struggled, as growing worries about the U.S. economy had investors cautious and looking to Congress and the Federal Reserve for a boost.
The Fed is expected to strike a dovish stance at its policy review later in the day and perhaps open the door to a higher tolerance for inflation – something dollar bears think could squash real yields and sink the currency even further.
A $1 trillion U.S. fiscal rescue package is also at an impasse as a Friday deadline to extend unemployment benefits looms.
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.1% as gains in China offset small losses elsewhere. Japan’s Nikkei .N225 was down 0.8% on a rising yen and weak start to corporate earnings season.
Full coverage : REUETRS
Oil rises after surprise drop in U.S. inventories offsets demand concerns
TOKYO – Oil prices rose on Wednesday after an industry report showed that crude inventories in the United States fell against expectations, giving the market a boost amid record increases of coronavirus infections in the U.S. and elsewhere.
Brent crude futures LCOc1 were up by 14 cents, or 0.3%, at $43.36 a barrel by 0326 GMT, after dropping 0.4% on Tuesday.
U.S. West Texas Intermediate crude futures CLc1 gained 2 cents, or 0.1%, to $41.06 a barrel, having dropped 1.4% in the previous session.
Inventories of crude oil in the U.S. dropped by 6.8 million barrels last week to 531 million barrels, data from industry group the American Petroleum Institute showed on Tuesday.
Analysts’ expectations were for an increase of 357,000 barrels. U.S. government data is due Wednesday.
Full coverage : REUETRS
Wall Street falls as pandemic hurts consumer confidence and earnings; stimulus plan underwhelms
Wall Street closed lower on Tuesday as investors fretted about weakening consumer confidence, disappointing financial results and as investors worried about wrangling in the U.S. Congress over a coronavirus aid plan.
Weighing heavily on the Dow were industrial conglomerate 3M Co (MMM.N), down 4.8%, after it reported a second-quarter plunge in demand across its businesses and McDonald’s Corp (MCD.N), which fell 2.5%, after a surprisingly big drop in global same-store sales.
Data released in the morning showed U.S. consumer confidence ebbed in July as coronavirus infections flared up across the country.
As they waited on a stimulus package agreement and for quarterly reports in one of the busiest weeks in earnings season, investors were also anticipating the U.S. Federal Reserve’s Wednesday wrap-up of its two day policy meeting.
Full coverage : REUETRS
