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US Job losses showed no letup as a surge in coronavirus cases forced new business shutdowns and a $600 weekly federal benefit inched to its expiration.

“New state unemployment claims increased last week for the first time in nearly four months, disturbing evidence that the struggling economy is backsliding at a time when coronavirus cases are on the rise.”

https://www.nytimes.com/2020/07/23/business/economy/unemployment-economy-coronavirus.html


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“With a delay until next week, it’s almost assured that the federal unemployment benefits of $600 per week will expire.

We’ve heard mention of benefits being lowered to $200 or less per week.”

https://www.forbes.com/sites/jimwang/2020/07/23/update-next-stimulus-package-to-be-released-next-week/#1f66561c540d


““I will be making $400 a week with just regular unemployment, which I might be able to scrape that together and make that work, but what will I be eating?” said unemployed actor Jonathan Hoover.”

https://newyork.cbslocal.com/2020/07/23/coronavirus-bill-unemployment-nyc/


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“The concern isn’t whether the US dollar will see an accumulated decline of 30 per cent in the future, but whether there will be a blow-up event that causes a sudden loss of confidence in the US dollar, and its market to collapse,” said Zhu, who is currently head of the National Financial Research Institute at Tsinghua University in Beijing.”

https://www.scmp.com/economy/china-economy/article/3094416/us-dollar-risk-sudden-collapse-ex-imf-official-warns-blow


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China has announced the closure of the US consulate in Chengdu just days after Washington gave Beijing 72 hours to vacate its Houston consulate.

“Tensions between the world’s two superpowers have risen to their most dangerous level in decades…”

https://www.ft.com/content/19cd7828-23c2-4cf1-9650-2ee24f636f13


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President Donald Trump said that the trade accord with China means “much less to me” because of what he called that country’s role in the spread of the coronavirus

“Trump has sought to pin blame on China for the outbreak as polls show a growing number of voters disapprove of his handling of the pandemic.”

https://www.aljazeera.com/ajimpact/blaming-china-trade-deal-means-trump-200724021148142.html


The United States government must remove tariffs imposed on European products such as French wine, said French Finance Minister Bruno Le Maire on Friday.”

https://uk.reuters.com/article/us-wto-aircraft-airbus-france/u-s-must-remove-tariffs-on-european-products-and-french-wine-le-maire-idUKKCN24P0PK


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Michel Barnier has said a trade and security deal with Boris Johnson’s government by the end of the year appeared “unlikely”, as he complained that Britain was demanding “near total exclusion” of European fishing boats from its waters.

““It is unfortunately clear that we will not reach in July the ‘early understanding on the principles underlying any agreement’ that was set as an aim,” the UK’s Chief Negotiator, David Frost said.”

https://www.theguardian.com/politics/2020/jul/23/considerable-gaps-remain-brexit-talks-says-uk-negotiator-david-frost


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Unemployment in Sweden rose in June, with over half a million people in total without work, and young people are the most severely affected.

“”We are in principle back at the peak of unemployment during the financial crisis,” said Olle Holmgren, an economist at bank SEB.”

https://www.thelocal.se/20200723/swedish-unemployment-rate-reaches-financial-crisis-levels


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Thousands of protesters have again taken to the streets in Bulgaria to protest alleged government corruption, with many calling for the resignation of Prime Minister Boïko Borissov, his centre-right government and the chief prosecutor.

The demonstrations in Sofia on Wednesday were the 14th consecutive day that protesters have been calling for change.”

https://www.euronews.com/2020/07/23/i-m-ashamed-of-our-rulers-bulgarians-on-why-anti-government-protests-are-continuing


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Turkey’s central bank said on Monday the country’s external debt maturing in a year or less stood at $169.5 billion, up nearly $5 billion from a month earlier

“At $22 billion, Turkey’s non-performing loans (NPLs) have remained high since a 2018 currency crisis laid bare the heavy reliance of construction and energy companies on foreign debt.”

https://cyprus-mail.com/2020/07/24/turkey-foreign-debt-climbs/


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Tunisia’s resigning prime minister, warned on Thursday of the imminent bankruptcy of public corporations due to financial problems

“He said that, “Public firms are on the verge of collapse and the economic situation is in a state of turmoil.””

https://www.middleeastmonitor.com/20200724-fakhfakh-tunisias-public-enterprises-on-verge-of-collapse/


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Hyperinflation has blighted Zimbabwe, Venezuela and the former Yugoslavia among others over the years…

The occurrence happens when a country’s inflation rate exceeds 50% per month over a period of time, defined by Hanke as 30 consecutive days. That happened in Lebanon this week.”

https://uk.reuters.com/article/uk-emerging-inflation-graphic/lebanon-follows-venezuela-into-hyperinflation-wilderness-idUKKCN24O21D


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China’s banking regulator has asked the country’s lenders to make preparations for a “big rise” in non-performing loans as part of Beijing’s efforts to brace its financial system for shocks from the coronavirus at home and a hostile environment abroad.

“Runs on China’s small banks have become more frequent amid the current turmoil, while the loan repayment capabilities of Chinese companies and households have been undermined by the impact of the coronavirus.”

https://www.scmp.com/economy/china-economy/article/3094533/china-warned-prepare-big-rise-bad-loans-financial-system


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South Korea’s vice finance minister warned Friday that the economic impact triggered by the coronavirus pandemic is worse than the 2008 global financial crisis.

“Vice Finance Minister Kim Yong-beom said the nation’s export slump is likely to be deeper and prolonged due to a resurgence of the virus across the world.”

https://en.yna.co.kr/view/AEN20200724000700320


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Thailand’s student movement has reignited, as young people across the country defy threats from the military-backed government to take to the streets and call for the resignation of Prime Minister Prayut Chan-o-cha…

“The surge in protests comes at a difficult time for the country, which remains under a state of emergency to contain the coronavirus pandemic.”

https://edition.cnn.com/2020/07/23/asia/thailand-anti-government-protests-intl-hnk/index.html


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Australians’ deepening raid on their pension funds is driving a surge in debt repayments, which analysts say makes for a double-whammy on the domestic stock market and its dominant big banks as the country sinks into its first recession in a generation.”

https://uk.reuters.com/article/uk-australia-pensions/australians-rush-to-raid-pensions-repay-debt-bodes-ill-for-big-banks-idUKKCN24P0B7


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New Zealand’s Ministry of Social Development figures have revealed there are more people receiving income support than during the Global Financial Crisis

“”Taking four months to do what during the GFC took 21 months highlights the tough position for a number of Kiwis and a number of businesses out there,” he told Newshub.”

https://www.newshub.co.nz/home/money/2020/07/covid-19-more-people-receiving-income-support-now-than-during-the-global-financial-crisis-figures.html


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Risks of failure in $6.6tn forex market at record high, study shows:

““Given the way in which FX trading has evolved, we have to think of additional ways to solve the problem of systemic risk,” said Marc Bayle de Jessé, chief executive of CLS, who joined the New York-based company last year after more than 20 years at the European Central Bank.”

https://www.ft.com/content/8587cb4b-faa8-4bb3-a775-b4edd90e4af5


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“Recall that every debt that crushes the borrower is an asset that yields monthly interest to the affluent owners of that debt.

“When unemployed people default on their student loans, the value of those loans falls, and the income flowing to the affluent owners of the debt drops to zero.

This is the key dynamic of the economy going forward: defaults on debt, declining wealth as assets are relentlessly repriced lower and sharp declines in income due to layoffs and debt defaults.”

https://seekingalpha.com/article/4360221-inflation-deflation-economy-is-elephant


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My focus is on areas of risk and weakness but the overarching narrative right now is very mixed – there are some tentative “green shoots” appearing for example in German manufacturing (composite Eurozone manufacturing PMI has risen for the first time since February), UK retail and services, US home sales etc. but of course this is all tenuous and fragile, given that the pandemic continues apace and the underpinnings are so wobbly.

The fact that gold and copper are have been rising simultaneously is perfectly illustrative of the current ambiguity and uncertainty.

https://www.economist.com/finance-and-economics/2020/07/25/unusually-copper-and-gold-prices-are-rising-in-tandem


You can read the previous ‘Economic’ thread here and visit my Patreon page here.

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