Weekly News Summary for August 14-20, 2020

Friday, Aug. 14, 2020: European Shares Drop on COVID-19 Concerns

European shares stumbled sharply on Friday after the UK enforced a 14-day quarantine on people arriving from France and the Netherlands, as the two countries experienced a sharp climb in new COVID-19 cases.

The benchmark Euro Stoxx 600 shed 1.6%, also weighed by the Eurozone’s second-quarter GDP figures which showed a 12.1% decline, while the UK’s FTSE 100 lost 1.9% and shares in some UK-based airlines as well as European tour operators slipped around 5% and 7%.       

Monday, Aug. 17, 2020: Chinese Stocks Up as PBOC Injects $100B Liquidity

Chinese equities rose on Monday after the People’s Bank of China (PBOC) injected about $100 billion of liquidity into the financial markets to support banks, while keeping the interest rates unchanged at 2.95%.

The central bank’s move sent the Shanghai Composite index up by 2.3%, while Hong Kong’s Hang Seng added 0.7% after two consecutive sessions of losses.  

Tuesday, Aug. 18, 2020: US Dollar Falls to 28-month Low

The US dollar dropped to a 28-month low on Tuesday, amid expectations that the lack of fiscal support may slow the US economy and lead the Federal Reserve to loosen monetary policy again which would further weaken the central bank’s traditional premium over other reserve currencies.

The US dollar index fell 0.4% to 92.493 against a basket of six major currencies, having registered its lowest in over two years of 92.457 earlier in the session, while gold futures climbed above $2,000 per ounce overnight and silver rose at $28.40 per ounce.   

Wednesday, Aug. 19, 2020: Pelosi Willing to Meet Halfway on Relief Bill

The possibility of agreeing to a compromise deal on the fresh round of economic relief measures seemed to have grown after US House of Representatives Speaker Nancy Pelosi suggested that they were willing to cut their COVID-19 relief bill in half to reach a short-term deal.

It was later reported that Pelosi’s senior House Democratic aide clarified her statements to mean that the Democrats for the White House would meet the Republicans’ proposal halfway, rather than cutting their proposed relief bill in half.  

Thursday, Aug. 20, 2020: Asian Stocks Post Largest Daily Fall in Five Weeks

Asian stocks and US futures weakened on Thursday, weighed by the Federal Reserve’s cautious economic outlook, concerns over worsening ties between Australia and China, and new cases of COVID-19 infections.

MSCI’s broadest index of Asia-Pacific shares outside Japan declined 1.83%, whereas US stock futures lost 0.55% and Australian shares dropped 0.77%, while the Shanghai Composite index fell 1.39% and South Korea’s KOSPI slipped 3.66% to mark as its largest slump, amid an increase in COVID-19 cases in Seoul.