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Weekly News Summary for June 5-11, 2020

Friday, June 5, 2020: Euro Hits Near Three-month High after ECB Move

European assets stood in the green after the European Central Bank decided during its meeting on Thursday to expand its emergency bond-buying program by €600 billion ($673 billion).

The move sent the euro near a three-month high of $1.1384 against the US dollar, while sovereign yield spreads tightened to their narrowest since March as a result of the dual initiative by Brussels and Frankfurt, which is allowing chronically struggling bank stocks to lead the current rally.    

Monday, June 8, 2020: AstraZeneca Reportedly Eyes Tie-up with Gilead

British-Swedish pharmaceutical company AstraZeneca plc has reportedly approached its US competition Gilead Sciences Inc. last month over a potential merger.

The potential tie-up between the two companies, which are among the group of firms racing to create a vaccine for COVID-19, could lead to a healthcare partnership worth about £200 billion ($250 billion), the largest merger to date.

Tuesday, June 9, 2020: US Officially in Recession – NBER

The National Bureau of Economic Research (NBER) said the US has officially fallen into a recession in February, as social distancing measures employed to contain the pandemic led to the end of the longest economic growth since 1854.

The announcement did not come unexpected, after all US gross domestic product (GDP) dropped 4.8% annualized in the first three months of 2020, while unemployment rate climbed to a record low of 3.5% in February, rising 14.7% in April and 13.3% in May.

Wednesday, June 10, 2020: OECD Expects Worst Recession in 100 Years for 2020

The Organization for Economic Cooperation and Development (OECD) has revised on Wednesday its estimates of the global economic impact of the COVID-19 pandemic, expecting the worst recession outside of wartime in 100 years.

The OECD stated that global expansion might contract by 7.6% this year, assuming there is a second wave of infections, while a decline of 6% is seen if a second wave does not take place.  

Thursday, June 11, 2020: Oil Prices Fall on Concerns Over Demand Growth

Oil prices dropped on Thursday as growing COVID-19 cases raised concerns over demand growth, with US crude supplies reaching an all-time high and the Federal Reserve saying economic recovery from the pandemic could take years.

Global benchmark Brent crude futures shed 3% to $40.47 per barrel, having lost as much as 3.7% earlier, while US West Texas Intermediate (WTI) crude futures were down 3.3% to $38.26 per barrel, after falling 4% earlier in the session.   



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