August 14. GDP of the European Union in the II quarter fell by a record 14.1% According to the second estimate of the European statistical agency Eurostat, the GDP of the EU countries in the second quarter fell by 14.1% in annual terms. On a quarterly basis, the indicator decreased by 11.7%. In the second quarter of the year, the economies of 19 eurozone countries contracted by 12.1% in quarterly terms and by 15% in annual terms. All indicators were in line with analysts' forecasts and the agency's first estimate. Eurostat noted that the decline in all indicators was the strongest since the start of statistics in 1995. Thus, the European economy has been declining for two quarters, which suggests that Europe has entered a recession. In the first quarter of 2020, the decline in GDP of 19 eurozone countries amounted to 3.6% in quarterly terms and 3.1% in annual terms. The EU economy contracted by 3.2% in Q1 and 2.5% in annual terms in Q1.
August 19. Gold prices dropped below $ 2,000 due to dollar stabilization The price of gold dropped today below the level of $2,000 per ounce (to $1,987.93) amid the stabilization of the US dollar in the market. The American currency is awaiting details on the strategy of the US Federal Reserve to support the economy affected by the pandemic. However, experts note that expectations of further weakening of the dollar may lead to the fact that in the near future gold will be able to gain a foothold above the $2,000 level and reach new record highs. Tonight will be released the minutes of the meeting of the US Federal Reserve, which may contain hints of a shift in the forecast for monetary policy. However, no changes in interest rates are expected until the end of 2021. Palladium lost 0.33% to $2.181.43 an ounce, while silver slipped 0.73% to $27.45 an ounce. Platinum fell 1.15% to $945.25.
August 20. The number of applications for unemployment benefits in the United States exceeded 1 million The number of initial jobless claims rose unexpectedly to 1.106 million, according to the US Labor Department, fueling fears that the recovery in America's labor market could be delayed. Experts predicted a decrease in the number of applications to 925 thousand. The number of Americans who submitted secondary claims for benefits fell to 14.844 million. The total number of people claiming unemployment benefits fell by 200 thousand, to 28.06 million. The US authorities note that since the labor market is still weak, additional financial assistance will be required in the near future to support vulnerable families and the economy as a whole.
September 01. German authorities have improved economic forecast for 2020 The German authorities have improved their forecast for the outlook for the economy in 2020 amid signs of effectiveness in efforts to support and stimulate Europe's largest economy. The German central bank expects the country's GDP to contract by 5.8% this year, while back in April it was predicted that the economy would contract by 6.3%. At the same time, the new forecast still does not rule out the onset of one of the most significant economic recessions since the end of World War II. Meanwhile, the forecast for next year was downgraded. Experts expect that the German economy in 2021 will grow by only 4.4%, while the previous forecast assumed growth of 5.2%. Also, the Ministry of Economy of the country notes that Germany, most likely, will not be able to achieve pre-crisis GDP indicators until early 2022.
September 03. The number of applications for unemployment benefits in the United States fell more than expected According to the US Department of Labor, the number of initial applications for unemployment benefits fell from the revised figure of the previous week by 130 thousand - to 881 thousand. Analysts predicted a decline in the indicator by 56 thousand applications. The figure has dropped below 1 million for the second time since March saw a sharp increase in the number of applications. The total number of people receiving unemployment benefits in the United States decreased by 1.238 million from the revised figure of the previous week to 13.254 million.
September 07. Johnson calls Brexit deadline British Prime Minister Boris Johnson said that a Brexit trade deal with the European Union should be concluded by October 15. The politician noted that if the parties fail to reach an agreement by this time, then the free trade deal will most likely not be concluded at all. According to Johnson, if the negotiations are unsuccessful, the UK will have a relationship with the EU similar to that of the EU and Australia, which is also a good result. In this case, Britain will have full control over its laws and regulations, as well as the conditions for the use of British fishing waters. The Prime Minister also stressed that Britain is ready to find a reasonable agreement with the EU on practical issues, including flights, freight transport or scientific cooperation, even if a trade deal is not reached. The post-Brexit transition period began for the UK on January 31, 2020 and will last until December 31, 2020. During this year, the EU and Britain should reconcile their future relationship. The next stage of negotiations is scheduled for tomorrow, September 8th.
September 08. US ready to hit China's economy again The US has said it is considering a ban on Chinese cotton products from Xinjiang. The US cited alleged human rights violations in Xinjiang as the reason for this move. Moreover, D. Trump noted that if he is re-elected in the presidential elections, he will end his dependence on the Chinese economy. In his statement, the president stressed that he «intends to turn the United States into a manufacturing superpower, independent of China.» According to the head of the White House, the US authorities will be able to return jobs from China, and companies that want to leave America will be required to pay large sums. Trump also said that today the United States is losing billions of dollars in the course of economic cooperation with China.
September 09. In July, the number of vacancies in the United States increased to 6.62 million Job vacancies in the US increased in July, with more workers leaving retail and professional and business services jobs due to concerns about COVID-19 infection and childcare concerns, according to a report from the U.S. Department of Labor (JOLTS). The number of vacancies, which is an indicator of labor demand, jumped from 6 million to 6.62 million on the last day of July, the highest since May. The JOLTS report follows last Friday's news that the US economy created 1.371 million jobs in August, after increasing 1.734 million in July.
September 14. OPEC downgrades forecast for global oil demand for 2020-2021 According to the September OPEC report, the organization downgraded the forecast for world oil demand for 2020 and 2021 by 0.4 million barrels per day. OPEC now expects a drop in demand by 9.5 million barrels per day this year and an increase of 6.6 million barrels next year. In 2020, demand is expected at 90.2 million barrels per day, and in 2021 – at 96.9 million. The deterioration is mainly due to a decrease in the level of economic activity in several countries of the Asia-Pacific region due to an increase in the number of cases of infection with Covid-19. Oil demand in India, Indonesia, Thailand and the Philippines in the second quarter was much lower than initially expected. At the same time, the demand for oil in China in the second quarter exceeded expectations. The organization notes that forecasts for demand may be lowered again due to the risks of a second wave of coronavirus in the world and the difficulties associated with vaccination. Moreover, the restrictions due to the pandemic and the operation of many businesses remotely could prevent the transport sector from fully recovering to pre-crisis levels next year.
September 16. Annual inflation in the UK in August was 0.2% According to the Office for National Statistics (ONS), inflation in Great Britain in August in annual terms slowed down to 0.2% from 1% in July. This is the lowest since December 2015. On a monthly basis, deflation was recorded at 0.4%. Analysts predicted annual inflation of 0.1%, and on a monthly basis – deflation of 0.6%. The CPIH index (inflation taking into account the costs of homeowners for the maintenance of housing) for the reporting month amounted to 0.5% in annual terms against 1.1% a month earlier. On a monthly basis, prices decreased by 0.3%, while in June their growth was 0.4%. Core inflation (CPI Core), excluding food, alcohol, tobacco and energy, rose 0.9% on an annualized basis in August after rising 1.8% a month earlier. The experts forecast an increase of 0.6%.
