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Asian stocks slip as Delta spread spooks investors


WORLDWIDE: HEADLINES  



UK’s Johnson says: We need to get the travel industry moving again

British Prime Minister Boris Johnson said on Monday that he wanted to get the travel industry moving again with a simple user-friendly system of rules to allow for trips abroad.

“We need to get people, get the travel industry moving again,” Johnson told reporters.

“We want an approach that is as simple as we can possibly make it.”

Britain reopened its borders to large parts of the world on Monday, scrapping quarantine for fully vaccinated arrivals from the European Union, excluding France, and the United States.

But the boost for the travel industry was dimmed by speculation that the government could also soon slap new rules on holidays.

Full coverage: REUTERS 

US manufacturing growth cooling; bottlenecks starting to abate

US manufacturing activity grew at a slower pace in July for the second straight month as raw material shortages persisted, though there are signs of some easing in supply-chain bottlenecks.

The survey from the Institute for Supply Management (ISM) on Monday showed a measure of prices paid by manufactures fell by the most in 16 months, while the supplier deliveries index retreated further from a 47-year high touched in May.

Timothy Fiore, chair of ISM’s manufacturing business survey committee, noted that “supply and demand dynamics appear to be moving closer to equilibrium for the first time in many months.” Part of that could be because spending is rotating back to services from goods.

“Manufacturing is slowing from unsustainable boom to sustainable strength,” said Chris Low, chief economist at FHN Financial in New York.

“Moderation in supplier deliveries and prices paid indicate bottlenecks are alleviating, but both remain high enough to indicate supply-side problems persist. Still, from a markets and policy perspective, progress is important.”

Full Coverage: REUTERS 

WORLDWIDE: FINANCE / MARKETS  

Asian stocks slip as Delta spread spooks investors

Asian stocks slipped on Tuesday, as the Delta coronavirus variant spread in key markets in the region and put Chinese authorities on high alert, rattling investor confidence.

Trade in Asia faced a weaker lead from Wall Street after investors there considered the impact the increasing number global cases of Delta could have on global economic growth.

In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) fell 0.40% in early trading.

Japan’s Nikkei (.N225) was off 0.85% in early trade.

China’s blue chip index CSI300 (.CSI300) shed 0.80% while Hong Kong’s Hang Seng Index (.HSI) fell 0.83%.

Australia’s benchmark index, the S&P/ASX200 (.AXJO) is off 0.25%, having reached a record on Monday after Square Inc (SQ.N) announced a $29 billion offer for buy-now-pay-later firm Afterpay Ltd (APT.AX).

The Reserve Bank of Australia is expected to leave rates unchanged at 0.10% when it meets later in the day, but reverse the July bond tapering decision due to the lock downs in Sydney and Brisbane caused by the expanding Delta variant.

Full coverage: REUTERS 

Oil prices rebound, but fuel demand concerns cap gains

Oil prices climbed on Tuesday, clawing back some of the previous session’s deep losses, even though concerns over coronavirus curbs combined with slowing factory activity in key buyer countries to keep a lid on gains.

Brent crude oil futures rose 24 cents, or 0.3%, to $73.13 a barrel, as of 0125 GMT. U.S. West Texas Intermediate (WTI) crude added 26 cents, or 0.4%, to $71.52 a barrel.

Both markets dropped more than 3% on Monday.

ANZ analysts in a note highlighted resurgent economic risks to major oil consumer China from the coronavirus pandemic. “Cases of the highly contagious Delta variant have emerged in 14 of 32 provinces. This could see further mobility restrictions introduced,” ANZ analysts wrote.

They also flagged slowing manufacturing activity as a key concern, to both China and the United States.

“China’s economic activity continued to ease in July, with the official Manufacturing Purchasing Managers Index falling to 50.4 from 50.9 in June,” ANZ said.

Full coverage: REUTERS 

Central Bank Digital Currencies Could Threaten Financial Stability and Privacy

Central bank digital currencies (CBDCs) are not required to promote faster payments and could potentially threaten financial stability and privacy, academics have claimed.

According to a report in the Financial Times, academics Stephen Cecchetti and Kim Schoenholtz argue that CBDC are “not needed” since public and private sectors already provide cheaper, faster, more reliable, and more accessible systems.

Non-CBCD services include the TIPS system in Europe, Faster Payments in the UK. The Federal Reserve is also set to launch its own instant payments service, FedNow in 2023.

The pair also highlight that privacy is an issue since CBDC results in transactions becoming traceable which poses “serious threats” to personal liberty.

Cecchetti and Schoenholtz said that CBCD is being spurred by “fear of being left behind” and advises that central banks should “go slowly to ensure a safe design”.

As cryptocurrencies surge in popularity, US regulators have been exploring how the sector might be regulated.

Last month, the American Bankers Association (ABA) highlighted its regulatory concerns around crypto assets. In a letter to the Federal Deposit Insurance Corporation the ABA has urged for clarity around what types of digital asset activity are allowed for banks.

Full coverage: Banking Exchange 

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