Wolf Money(world market review 31 May-6 June 2021)

Gog Sing Hooi 1933-1994

Chinatown, Singapore circa 1980

Gift of DBS Bank Ltd, collection of National Gallery Singapore 

Market Summary 31 May – 6 Jun 2021

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+ Democrats offer US$547bn for infrastructure ahead of Biden’s meeting with Republican Senator  

+ US business PMI increased to 64 in May from 62.7 in April: ISM 

+ US manufacturing index rose to 61.2 in May, on 12 straight month expansion 

+ US jobless claims down 20,000 to 385,000 in May 29 week, below 400k for the first time since March 2020

+ US economy added 559,000 jobs in May, unemployment fell to 5.8% 

+ US private payrolls rose by 978,000 in May, accelerated at its fastest pace in nearly a year, vs 680,000 estimate: ADP

+ US average hourly earnings for workers in leisure and hospitality rose to US$18.09 in May to highest ever 

- US wants to correct China trade ‘imbalances’: Tai 

- Nations across the world have to diversify more as US is using dollar to put political n economic pressure on rivals: Jim Rogers 

- US dollar dropping to 3-year low against Chinese yuan this week 

+ Yellen tells G7 to keep spending, says inflation will pass 

+ US suspended tariffs against 6 countries over taxing tech giants, but could still be imposed if int’l agreement isn’t reached  

- Biden’s EV plan includes boosting domestic recycling of batteries to reuse lithium and other metals 

- Biden order bans investment in dozens more of Chinese firms with alleged ties to defense or surveillance tech sectors 

- US supply disruptions and labour shortages have begun to hit prices and output: Fed 

- US major airlines are pressuring govt on refusal to quickly lift Covid-19 travel restrictions 

+ Microsoft won US antitrust approval for its deal to buy AI and speed tech firm Nuance for US$16bn 

+ Lockheed in discussions with govt to finalize F-35 deliveries for 2022

+ NASA to send 2 missions to Venus by 2030 

+ Tesla revised plans for German gigafactory, include details for plans to produce battery cells, expansion other production lines 

- Tesla’s new car orders in China plunged 50% in May 

+ Square considering making Bitcoin hardware wallet

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+ China, US agree on joint efforts to solve specific problems in economy, trade: MOC 

+ China proposed an ‘appropriate reduction’ to stamp duty: govt spokesperson

+ China likely to slow yuan’s rise to deter speculators and help its exporters, to avoid drastic steps: policy sources 

+ China’s exports expected to have risen 32% in May YoY: Reuters 

+ China’s home prices expected to grow faster this year fuelled by hot demand in major cities and easy liquidity: Reuters poll

- China some manufacturers are refusing to accept new orders as costs rise, risking global supply shortages 

+ Liu He exchanged views with Janet Yellen on issues of mutual concern in his 2nd virtual call in a week 

- China’s most indebted developer Evergrande Gp said debt to drop to year-end target by end June 

- China cancelled hundreds of passengers flights, slows seaborne freight in Guangzhou to contain pandemic outbreak 

+ China approved emergency use of Sinovac’s Covid-19 vaccine in Children between ages of 3 and 17 

- China pushing Hurang Asset Management to sell non-core assets: Reuters 

- Chinese investors borrow the most in 6 years as margin trading hit US$271bn

+ China’s market regulator required 8 sharing economy firms to standardize prices and competition 

+ China fires up ‘artificial sun’ at 120m degrees Celsius in quest for nuclear fusion for close to 2 minutes 

+ China battery maker CATL tops 1 trillion yuan in market cap 

+ China starts tracking carbon emissions in real time

- China 67,400 creditors seeking total US$187bn from bankrupt HNA Gp

+ Huawei launches HarmonyOS 2.0 for smartphone in move to counter US ban, dominance 

+ HK a single car parking space at a luxury apartment complex has been sold for record US$1.3m 

+ Taiwan’s economy expected to grow 5.46% in 2021: statistics agency 

+ Taiwan’s exports likely rose for an 11th straight mth in May: Reuters poll 

+ Foxconn to produce EVs in Thailand 

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+ Japan households estimated to have saved about US$118bn or 4% of annual consumption due to pandemic 

+ Japan’s April household spending rose 13% YoY in April, faster than expected 

+ Japan’s economy likely shrank slightly less than initially estimated in Q1: Reuters 

+ Japan said that it would treat semiconductor industry growth as “national project”: Ministry 

- Japan number of babies born fell to record low of 840,832 in 2020, down by 24,407 from previous year 

+ BOJ should avoid one-size-fits-all standards: Kuroda 

+ Russia-Chinese trade volume to reach US$200bn by 2024: Putin 

+ Russia-China trade turnover saw 13-fold growth over past 20 years amounted to US$104bn end 2020  

+ Russia advancing projects to have waste-to-energy plants produce electricity

+ Russia climate-focused industries expected to generate annual revenues of >US$50bn: Putin

- Canada lost 68,000 jobs in May, unemployment rate rose to 8.2% as pandemic restriction bite 

+ El Salvador looks to become world’s first country to adopt bitcoin as legal tender 

+ G7 nations reached deal to tax MNCs, back minimum global corporate tax rate, close cross-border tax loopholes 

+ Oil hit highest level in >2 years after OPEC expecting demand to rise as economies lift Covid-19 restrictions 

+ WHO approved China’s Sinovac Covid-19 vaccine for emergency use

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+ EU to keep borrowing limits suspended for 3rd year in a row in 2022 to help finance an economic recovery from pandemic 

+ EU commission to borrow €80bn in 2021 in long-term bonds to finance recovery 

+ ECB to keep policy loose this year despite high inflation risks: Reuters poll 

+ Euro zone inflation rose to 2% in May on increase of >13% in energy prices, up from 1.6% in April

- Euro zone retail sales fell more than expected in April, dragged down by decline in sales of non-food products 

- EU and UK opened formal antitrust investigations into FB classified-ads service Marketplace 

- German authority launched probe into Google’s new showcase 

+ UK strikes post-Brexit trade deal with Norway, Iceland and Liechtenstein

+ UK gets green lights to start talks on joining CPTPP 

- UK health minister said too early to say whether govt would stick to its plan to lift Covid-19 lockdown restrictions on Jun 21 

+ UK recorded zero deaths from Covid-19 for the first time since July 2020 

+ France adds €15bn to Covid-19 support for businesses and workers 

+ France will reopen for int’l tourism, allowing vaccinated tourists from most part of the world 

- France’s antitrust authority to issue decision following investigation into Google’s advertising business on Jun 7

+ Italian economy will grow by 4.7% this year, raising previous projection of 4%: ISTAT

- Turkey’s lira hit new low on Erdogan’s call for interest rate cut 

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+ Australia’s economy expanded 1.8% in first 3 mths of the year, driven by private sectors 

- Australian exporters said normal business with China ‘impossible” after deteriorating relations 

+ India’s May exports up 67% YoY at US$32.21bn, trade deficit at 8-mth low of US$6.32bn  

+ India kept interest rates steady at record lows at 3.35% 

- Indian airlines expected to incur loss of US$8bn by 2022 due to Covid-19 

+ India to ease lockdown rules as Covid-19 case numbers decline 

+ South Korea export growth hit the highest in >32 years in May 

- South Korea’s inflation rose to highest since 2012 in May to 2.6% 

+ South Korea considering drafting second extra budget of this year 

+ Aramco may seek to raise US$5bn in Islamic bonds to help fund its US$65bn dividend commitment 

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+ Asean, EU concluded negotiations for world’s first bloc-to-bloc air transport 

+ Indonesia formed task force to go after nearly US$8bn of un-repaid state funds handed out to banks owners during AFC

+ Indonesia central bank plans to issue state backed digital Rupiah for cashless payments

- Garuda would seek suspension of debt payments to creditors and lessors under a ‘standstill agreement’ to avoid bankruptcy 

+ Thailand has room for further monetary easing to support its economic recovery: IMF 

+ Thai govt set to roll out fresh 50% co-payment subsidy for monthly salary of employees of SMEs 

+ Thailand to go ahead to reopen to vaccinated foreign tourists in July starting with resort island Phuket

+ Thailand’s CPI rose 2.44% YoY for second straight mth in May, lower than forecast

- Vietnam suspends int’l flights to Hanoi and HCM following recent pandemic outbreak

- Vietnam Airlines plans to sell 11 Airbus A321 aircraft through an auction 

+ Malaysia announced RM40bn stimulus package for the economy to soften the blow of another lockdown 

 - Malaysia health authorities raised concerns on growing number of Covid-19 deaths, serious cases involving children

- Malaysia manufacturers reduce output as Covid-19 lockdown limits workforce capacity to 60%

- Malaysia risks losing investment with proposed restrictions on imports of scrap metal issued by state standards agency SIRIM

+ Sg on track to ease tightened Covid-19 curbs after Jun 13: PM 

+ Sg unemployment rate stayed at 2.9%, jobless rates for residents and citizens at 3.9% and 4.1% (92,000) respectively 

+ Sg PMI at 50.7 in May vs 50.9 in April, continues expansions for 11 straight mths 

+ Sg retail sales surged 54% in April YoY after store closures during last year’s CB period

- Sg Formula One Grand Prix has been cancelled for the 2nd year in a row due to pandemic 

+ HDB resale volumes fell under 2000, first time since May 2020 

- Hyflux’s judicial managers filed court application to wind up company 

+ City Development files for Sg REIT IPO of UK assets 

Contribution by Derek@valueinvestments chat group. Thank you.

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