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Global economy’s recovery hinges on stimulus, virus battle, officials say By Reuters

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© Reuters. IMF Managing Director Kristalina Georgieva speaks at a news conference following the “1+6” Roundtable meeting at the Diaoyutai state guesthouse in Beijing

By David Lawder and Jan Strupczewski

WASHINGTON/BRUSSELS (Reuters) – Global finance leaders on Tuesday said the world economy had escaped a coronavirus-triggered collapse so far, but warned that failure to conquer the pandemic, maintain stimulus and tackle mounting debt among poor nations could crush a fragile recovery.

At the start of the annual meetings of the International Monetary Fund and World Bank, the IMF issued slightly improved growth forecasts spurred by unexpectedly stronger rebounds from coronavirus lockdowns in the wealthiest countries and China.

The IMF said it now expected global gross domestic product to shrink 4.4% in 2020, compared to the 5.2% contraction it predicted in June, when business closures were at their peak. Some $12 trillion in stimulus supplied largely by advanced economies limited the damage, but poor countries and other emerging market economies faced a worsening picture, the global lender said.

“The story is less dire than we thought three months ago, but dire nonetheless,” IMF Managing Director Kristalina Georgieva said during a panel discussion that was held virtually.

Georgieva said governments needed to stay focused on their healthcare responses to the coronavirus and must not withdraw stimulus prematurely.

“If we cut these lifelines that have been extended to families and businesses before we are out of the health crisis, this could be catastrophic in terms of bankruptcies, unemployment and undoing all that has been done so far,” she added.

Underscoring concerns that it could take longer to develop promised treatments for the virus, U.S. drug companies Eli Lilly (N:) and Johnson & Johnson (N:) said they were pausing clinical trials of an antibody treatment and vaccine, respectively, over safety concerns.

The Group of 20 major economies, in a draft communique seen by Reuters, said the outlook was “less negative” due to the positive impacts from actions already taken, but the recovery will be “uneven, highly uncertain and subject to elevated downside risk.”

“We will sustain and strengthen as necessary our policy response, considering the different stages of the crisis, to secure a stable and sustainable recovery,” G20 finance ministers and central bank governors said in the draft ahead of a meeting on Wednesday.

DEBT FREEZE EXTENDED

The draft also said the G20 will agree to extend a freeze on the servicing of official bilateral debt for poor countries for another six months beyond the end of this year.

That is well short of the year-long extension sought by the IMF, the World Bank and many emerging market nations, but the G20 agreed to review the debt situation in April to determine whether another six-month extension would be warranted.

The freeze aims to free up billions of dollars that poor countries can divert to their pandemic health and economic responses.

Some emerging market leaders said more needed to be done to avert defaults in fragile economies from Africa to Latin America.

Kenneth Ofori-Atta, Ghana’s finance minister and the chairman of the Group of 24 developing nations, said stronger participation from private-sector creditors, who have so far shunned debt suspensions, was required for efforts that include restructurings of emerging market debt.

“It’s going to take a very synchronized and coordinated effort by all parties so we don’t get into a world of cascading defaults,” Ofori-Atta said at a G24 news conference. “I think all of this could be avoided if we can begin real and honest discussions as to the cash-flows capacity of all of these countries.”





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Economy

Holiday shoppers are coming to town with health checklist: survey By Reuters

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2/2
© Reuters. FILE PHOTO: Black Friday ads lay on top of clothes during a sales event on Thanksgiving day at Walmart in Westbury, New York

2/2

By Nathan Frandino

(Reuters) – Holiday shoppers braving the coronavirus pandemic to buy gifts in person are checking which stores are naughty or nice in terms of public health, a worldwide survey released on Monday showed.

About 79% of respondents want to see masks being worn, 82% demand visible cleaning efforts, and 76% prioritize reduced occupancy in stores, according to the survey by Oracle Retail, a unit of software maker Oracle Corp (N:).

Contactless checkout and social distancing requirements are also paramount.

“Customers are eager to shop,” said Mike Webster, senior vice president and general manager of Oracle Retail. “What consumers are looking for is basic levels of protection and safety and they’re looking for that confidence that their needs are being looked after.”

More than 5,100 consumers were surveyed in the United States, United Kingdom, Australia, China, Brazil, Mexico, Italy, France, Germany and the United Arab Emirates in September.

The pandemic has killed more than 1.1 million people and infected more than 41.9 million worldwide, according to a Reuters tally.

Countries have imposed new restrictions as COVID-19 cases have risen again in recent weeks. Wales on Friday banned the sale of all non-essential goods in stores as part of a two-week lockdown, while regions in Italy have announced measures such as shuttering shopping centers.

San Francisco has capped occupancy for storefront retailers at 50% of the normal maximum. At the Californian city’s Union Square plaza, shoppers lined up outside the Apple (NASDAQ:) Store and Gucci, where an associate took their temperature.

“A lot of the shops that I go to, they offer hand sanitizer and seem pretty up to date on all the equipment and everything that they have in the shop, so I feel safe going into stores,” said 26-year-old Antioch resident Teino Stingley.

Nearly 20% of survey respondents said they planned to shop in-store this holiday season, while 47% plan to split between online and in-store and 16% will opt for curbside pick-up.

“I feel too many people inside of a store makes me uneasy, so I’d much prefer an outside open-air environment,” said Param Sharma, 24. “And it’s more convenient to order it on the app, pull up curbside, and have them hand it to you.”

Fellow San Francisco resident Katrin Eyjolfsdottir, 27, plans to split her shopping between going online and visiting stores for the live experience.

“That’s a big part of the whole Christmas holiday spirit,” she said. “I think the stores are doing a good job of keeping everything clean and sanitized and following the procedures.”

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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BlackRock Downgrades U.S. Government Debt on Blue-Sweep Outlook By Bloomberg

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© Reuters. BlackRock Downgrades U.S. Government Debt on Blue-Sweep Outlook

(Bloomberg) — BlackRock Inc (NYSE:)., the world’s largest asset manager, is downgrading its views on U.S. government debt even as Treasuries retain their value as a haven amid Monday’s stock-market selloff.

Worries about rising coronavirus cases weakening the global economy pushed the S&P 500 Index toward its biggest drop in a month. Treasuries advanced, sending 10- and 30-year yields down by around 5 basis points each, to 0.80% and 1.59%, respectively.

Treasuries Gain Most in Weeks as Investor Optimism Takes a Hit

In a note released Monday by BlackRock’s research arm, strategists cited the growing likelihood of significant fiscal expansion under a unified Democratic government. Such a scenario, in which Joe Biden wins the White House and his party takes control of both chambers of Congress, would bring forward the market pricing of higher inflation, they said.

“This is why, tactically, we are downgrading nominal U.S. Treasuries and upgrading their inflation-linked peers,” said strategists Mike Pyle, Scott Thiel and Beata Harasim, along with researcher Elga Bartsch.

New York-based BlackRock oversees $7.8 trillion, $2.5 trillion of which is in fixed-income assets. It joins a growing list of major firms, which includes Credit Suisse (SIX:) Group AG and Goldman Sachs Group Inc (NYSE:)., that have weighed in during the past month with the prospects of a “blue sweep.”

BlackRock changed its view by saying the strategic case for holding nominal government bonds has diminished with yields closer to “perceived lower bounds.”

“Such low rates reduce the asset class’s ability to act as ballast against equity market selloffs,” the strategists wrote.

“We prefer inflation-linked bonds as we see risks of higher inflation in the medium term,” they said. “On a tactical basis, we keep duration at neutral as unprecedented policy accommodation suppresses yields.”

Earlier this year, the firm was buying Treasuries along with other assets being purchased by the Federal Reserve as part of a “follow-the-Fed” mantra.

©2020 Bloomberg L.P.

 

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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EU backs Nigerian candidate for WTO leadership, EU official says By Reuters

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BRUSSELS (Reuters) – The European Union is backing former Nigerian finance minister Ngozi Okonjo-Iweala to head the World Trade Organization, sending a signal of trust in Africa, an EU official said on Monday.

Okonjo-Iweala and South Korean trade minister Yoo Myung-hee are vying to be the first female leader in the WTO’s 25-year history, replacing Brazilian Roberto Azevedo, who quit a year earlier than expected at the end of August.

The EU’s support for Okonjo-Iweala is considered a strong signal to reinforce the multilateral order and a sign of mutual trust between the bloc and Africa, the official said.

The WTO faces dual challenges: criticism from U.S. President Donald Trump’s administration which froze its appeals body by blocking its appointment of judges, and worsening U.S.-China trade relations.

Okonjo-Iweala, 66, a previous Nigerian foreign minister, is an economist and development specialist serving as board chair of global vaccine alliance Gavi. She wants the WTO to help poorer countries access COVID-19 drugs and vaccines.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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