Asian stocks gain on U.S. stimulus hope, yuan surges

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Negotiations will continue on Wednesday, an aide to top U.S. Democrat Nancy Pelosi said.

On Wall Street, shares of Google parent company Alphabet rose despite an antitrust lawsuit against it by the U.S. Justice Department.

Netflix, however, reported disappointing earnings, leading its shares to fall 6% after trading hours.

The Dow Jones Industrial Average ended up 0.40% on Tuesday. The S&P 500 rose 0.47%, and the tech-heavy Nasdaq Composite rose 0.33%.

The onshore yuan jumped to 6.6602 per dollar, the strongest since July 2018. Yuan bulls have been encouraged by recent signs from the People’s Bank of China that it is more comfortable with currency appreciation.

The U.S. dollar hit a one-month low against a basket of major currencies as investors awaited the outcome of the fiscal stimulus talks and as coronavirus cases spiked in Europe.

Benchmark 10-year U.S. Treasury yields hit a four-month high of 0.8060% and the yield curve reached the steepest level in more than four months on hopes lawmakers could agree on a stimulus package.

Oil prices fell on Wednesday after a surprise climb in U.S. crude stockpiles added to concerns about a global supply glut.

Brent crude futures fell 0.56% to $42.92 a barrel while U.S. crude futures slipped by 0.55% to $42.92 per barrel.

(Reporting by Stanley White in Tokyo and Jessica DiNapoli in New York; Editing by Sam Holmes and Richard Pullin)

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With Covid-19 Under Control, China’s Economy Surges Ahead

BEIJING — As most of the world still struggles with the coronavirus pandemic, China is showing once again that a fast economic rebound is possible when the virus is brought firmly under control.

The Chinese economy surged 4.9 percent in the July-to-September quarter compared with the same months last year, the country’s National Bureau of Statistics announced on Monday. The robust performance brings China almost back up to the roughly 6 percent pace of growth that it was reporting before the pandemic.

Many of the world’s major economies have climbed quickly out of the depths of a contraction last spring, when shutdowns caused output to fall steeply. But China is the first to report growth that significantly surpasses where it was at this time last year. The United States and other nations are expected to report a third-quarter surge too, but they are still behind or just catching up to pre-pandemic levels.

China’s lead could widen further in the months to come. It has almost no local transmission of the virus now, while the United States and Europe face another accelerating wave of cases.

The vigorous expansion of the Chinese economy means that it is set to dominate global growth — accounting for at least 30 percent of the world’s economic growth this year and in the years to come, Justin Lin Yifu, a cabinet adviser and honorary dean of the National School of Development at Peking University, said at a recent government news conference in Beijing.

Chinese companies are making up a greater share of the world’s exports, manufacturing consumer electronics, personal protection equipment and other goods in high demand during the pandemic. At the same time, China is now buying more iron ore from Brazil, more corn and pork from the United States and more palm oil from Malaysia. That has partly reversed a nosedive in commodity prices last spring and softened the impact of the pandemic on some industries.

Still, China’s recovery has done less to help the rest of the world than in the past because its imports have not increased nearly as much as its exports. This pattern has created jobs in China but placed a brake on growth elsewhere.

China’s economic recovery has also been dependent for months on huge investments in highways, high-speed train lines and other infrastructure. And in recent weeks, the country has seen the beginning of a recovery in domestic consumption.

The affluent and people living in export-oriented coastal provinces were the first to start spending money again. But activity is resuming now even in places like Wuhan, the central Chinese city where the new coronavirus first emerged.

“You’ve had to line up to get into many restaurants in Wuhan, and for Wuhan restaurants that are popular on the internet, the wait is two or three hours,” said Lei Yanqiu, a Wuhan resident in her early 30s.

George Zhong, a resident of Chengdu, the capital of Sichuan Province in western China, said that he had made trips to three provinces in the past two months and has been actively shopping when he is home. “I spend no less than in previous years,” Mr. Zhong said.

China’s economic growth in the past three months came in slightly below economists’ forecasts of 5.2 percent to 5.5 percent. But the performance was still strong enough that stock markets in Shanghai, Shenzhen and Hong Kong rose in early trading on Monday.

The country’s broadening recovery could also be seen in economic statistics just for September, which were also released on Monday. Retail sales climbed 3.3 percent last month from a year ago, while industrial production was up 6.9 percent.

China’s model for restoring growth may be effective, but may not be appealing to other countries.

Determined to keep local transmission of the virus at or near zero, China has resorted to comprehensive cellphone tracking of its population, weekslong lockdowns of neighborhoods and cities and costly mass testing in response to even the smallest outbreaks.

China’s rebound also comes with some weaknesses, particularly a surge in overall debt this year by an amount equal to 15 to 25 percent of the economy’s overall output. Much of the extra debt is either borrowing by local governments and state-owned enterprises to pay for new infrastructure, or mortgages taken out by households and companies to pay for apartments and new buildings.

The government is aware of the risk of letting debt accumulate quickly. But reining in new credit would hurt real estate activity, a sector that represents up to a quarter of the economy.

Another risk to China’s recovery is its heavy dependence on exports. The surge in exports in the past three months, along with lower prices for imports of commodities, accounted for a big chunk of economic growth, one of the largest shares of any quarter in a decade. Exports still represent over 17 percent of China’s economy, more than double the proportion that they make up in the American economy.

China’s leaders recognize that the country’s exports are increasingly vulnerable to geopolitical tensions, including the Trump administration’s moves to unwind trade relations between the United States and China. Shifts in global demand might also threaten exports, as the pandemic batters overseas economies.

Xi Jinping, China’s top leader, has increasingly emphasized self-reliance, a strategy that calls for expanding service industries and innovation in manufacturing, as well as enabling residents to spend more.

“We need to make consumers the mainstay,” said Qiu Baoxing, a cabinet adviser who is a former vice minister of housing, at the news conference in Beijing. “By focusing on domestic circulation, we are actually enhancing our own resilience.”

But empowering consumers has long been a challenge in China. Under ordinary circumstances, most Chinese are compelled to save for education, health care and retirement because of a weak social safety net. The economic slowdown, and the pandemic, have meant lost jobs, compounding the problem, particularly for low earners and rural residents.

Beijing’s approach to helping ordinary Chinese during the slowdown has been to provide companies with tax rebates and large loans from state-owned banks, so that businesses would not need to lay off workers. But some economists argue that Beijing should instead be handing out coupons or checks to more directly assist the country’s poorer citizens.

Millions of Chinese migrant workers endured at least a month or two of unemployment in the spring as factories were slow to reopen after the epidemic. Young Chinese found themselves dipping into their savings to eat or taking on second jobs to make up for slashed wages.

But Chinese government economists are wary of providing direct payments to consumers. They say that the government’s priorities are investment-driven growth and measures to improve productivity and quality of life, such as digging new sewerage systems or adding elevators to three million older apartment towers that lack them.

“We’ve seen a lot of suggestions to increase consumption, but the crux is to enrich people first,” said Yao Jingyuan, a former chief economist of the National Bureau of Statistics who is now a policy researcher for the cabinet.

Western governments have experimented with providing extra-large unemployment checks, one-time payments and even subsidized meals at restaurants. These payments have been aimed at helping families sustain a minimum standard of living through the pandemic — which in turn has fueled demand for imports from China.

Michael Pettis, a finance professor at Peking University, said that as people in other countries supported by government subsidies continue to turn to China for products during the pandemic, “we’re going to see a resurgence of trade conflict, and not just U.S.-China, but global.”

Liu Yi and Amber Wang contributed research.

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As the Coronavirus Surges, a New Culprit Emerges: Pandemic Fatigue

The virus has seeped through communities, rural and urban: In Chicago, public schools remained closed to students for a sixth consecutive week as the city’s rate of positive coronavirus tests inched up near 5 percent. In Gove County, Kan., population 2,600, nine people have died from the virus in recent days, health officials reported. Clusters of infections have emerged from a spa in Washington State, a hockey league in Vermont, a Baptist church in North Carolina and a Sweet 16 party on Long Island.

Sick people are telling contact tracers they picked up the virus while trying to return to ordinary life. Beth Martin, a retired school librarian who is working as a contact tracer in Marathon County, Wis., said she interviewed a family that had become sick through what is now a common situation — at a birthday party for a relative in early October.

“Another case said to me, ‘You know what, it’s my adult son’s fault,’” she recalled. “‘He decided to go to a wedding and now we’re all sick.’”

Mark Harris, county executive for Winnebago County, Wis., said he had been frustrated by the “loud minority” in his county that had been successfully pushing back against any public health measures to be taken against the pandemic.

They have a singular frame of mind, he said: “‘This has been inconveniencing me long enough and I’m done changing my behavior.’”

In the Czech Republic, a politically divided nation, people met the initial order to shelter at home this spring with an unusual show of unity. They began a national mask sewing campaign, recognized around the world for its ingenuity. Confidence in the government, for its handling of the crisis, reached a record 86 percent.

Since then, support for the government response has plummeted, and the country is now experiencing the fastest increase in virus cases in Europe. Roughly half of the more than 150,000 cases recorded in the Czech Republic have come in the past two weeks, and more than half of the country’s nearly 1,300 deaths have come this month.

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As Virus Surges in Europe, Resistance to New Restrictions Also Grows

LONDON — France has placed cities on “maximum alert” and ordered many to close all bars, gyms and sports centers on Saturday. Italy and Poland have made masks compulsory in public. The Czech Republic has declared a state of emergency, and German officials fear new outbreaks could soon grow beyond the control of their vaunted testing and tracing.

Across Europe and beyond, Covid-19 has come roaring back, and, as happened last spring, officials are invoking restrictions to try and suppress it. But this time is different.

Still reeling from the economic, emotional and physical toll of nationwide lockdowns that brought the Continent to a virtual standstill, government officials are finding that the public might not be so compliant the second time around.

In some places new restrictions are accepted, albeit grudgingly, because the alternative — new nationwide lockdowns — would only be worse. But there is widening skepticism that publics would even go along with such a drastic step.

Instead, as exhaustion and frustration with pandemic restrictions sets in, governments are trying to thread a narrowing course between keeping the virus in check and what their publics and economies will tolerate. That is especially so in democracies, where governments are ultimately answerable to the voters.

“It is going to be a lot more difficult this time,” said Cornelia Betsch, Heisenberg-Professor of Health Communication at Erfurt University, in Germany, citing “pandemic fatigue.”

As the crisis deepens, the once-solid consensus in many countries to join in sacrifices to combat the virus is showing signs of fracturing. New rules are challenged in courts. National and local leaders are sparring.

In Spain, the government on Friday decreed a state of emergency in the Madrid area. The step was taken over the heads of the highest regional court and objecting local politicians, and within hours the nation’s main opposition leader called on the prime minister to appear in Parliament to justify it.

The intense feuding in Spain reflects a broader political resistance confronting national leaders worldwide.

Business groups are issuing dire warnings that whole industries could collapse if restrictions go too far. Sporadic protests, usually though not always, limited to a political fringe, have broken out. Public skepticism is fueled in many countries by the failure of governments to fulfill grand promises on measures like contact tracing, testing and other measures.

In perhaps the most telling indication that people are either confused or done listening to guidance, cases continue to explode, including in places where new measures have already been promulgated.

Portugal ordered new restrictions last month, but on Thursday recorded more than 1,000 daily infections for the first time since April. In the northern England, where new rules have come and gone and come again, the most tangible result has been sowing confusion, not slowing contagion. Officials are now warning that hospitals could face a greater flood of patients than at the height of the pandemic in April.

The World Health Organization on Thursday announced a record one-day increase in global coronavirus cases. Europe, as a region, is now reporting more cases than India, Brazil or the United States.

The pitfall of imposing stricter new measures has already been witnessed in Israel, the only country to order a second nationwide lockdown. It has led to chaos and rampant protests.

“People view the decisions as political, and not health-based,” said Ishay Hadas, a protest organizer in Israel, arguing that masked outdoor gatherings carried minimal risk. “The main problem is the lack of public trust.”

While issues around mask wearing and other prudent measures remain far less politicized in Europe, especially compared to America, the prospect of a winter under tight restrictions or even lockdowns is stirring new frustration and dividing political parties.

With Britain expected to announce even more sweeping measures on Monday, many focused on curbs to drinking and carousing, the leader of the opposition Labour Party, Sir Keir Starmer has challenged the government to produce any scientific evidence showing that the early pub closings help slow transmission.

Even people responsible for advising the British government cannot keep up and are at a loss to explain some of the measures.

“People are very confused,” said Robert West, a professor of health psychology at University of College London. Mr. West is a subcommittee member of SAGE, a scientific body advising the government on policy.

“I couldn’t put my hand on my heart and say I know what the rules are,” he said.

In part of the eurozone region that the W.H.O. team has studied in detail, about half the population is experiencing pandemic fatigue, Ms. Betsch said. These people were searching for less information about the virus, less concerned about the risks and less willing to follow recommended behaviors.

Slowing the spread of the virus, which thrives on human contact, still depends on individuals changing their behavior.

“The only other option is to lock us up again,” said Francesca Del Gaudio, 24, as she and a friend, wearing masks like nearly everyone around them, walked through Rome’s Piazza Trilussa on Thursday, the first day of Italy’s expanded measures. “And we do not want that.”

But if people choose not to listen to guidance, it remains to be seen if steep punishments will chasten them. Violators in Italy now face a 1,000-euro fine.

Surveys in countries across Europe reviewed by the health officials show that a clear majority of people are willing to comply with regulations if they are well explained and easy to follow.

People may also be more willing to submit to new restrictions if they see hospitals fill and death tolls rise, Ms. Betsch said.

But Europe’s regulatory landscape is shifting so quickly that governments risk undermining basic guidance in their contortions to avoid further lockdowns Some steps have seemed simply nonsensical.

In Spain, restaurants in Madrid were ordered to stop serving after 10 p.m., and to close by 11 p.m. — when many people are just considering sitting down to eat.

“Everybody knows that we dine in Spain much later than in other countries, so not being able to stay open until midnight is pure economic nonsense,” said Florentino Pérez del Barsa, a Madrid restaurateur.

While public attention often focuses on those who shout the loudest — like the thousands who protested recently outside the Reichstag in Berlin and in London’s Trafalgar Square, calling the pandemic a hoax and a government-driven plot — they represent only about 10 percent of the public, according to a study from Germany.

About 20 percent of people are against regulations, presumably for personal, emotional and financial reasons.

But Ms. Betsch, who has been working with the W.H.O. research group, said the larger concern is roughly half the population — the “fence-sitters.”

They are open to regulations but need to be listened to and educated, she said, and new government policies that are fragmented only compound the frustration.

The choices facing national governments are onerous.

The French government, watching anxiously as hospital beds fill up, extended its maximum-alert ‘‘red zone’’ to many major metropolitan areas including Lyon, Grenoble, Lille and Saint-Etienne in addition to Paris, Marseille and Aix-en-Provence. Residents of Toulouse protested on Friday, fearing their city would be included.

Xavier Lencou, an engineering student queuing for a coronavirus test near Les Halles, in central Paris, said that more people around him were respecting measures like mask-wearing, unlike in the spring.

But he worried stricter measures would push people past their limit.

“If we have a new lockdown it might be worse, because people wouldn’t respect it.” he said.

Jérôme Fourquet, a political analyst at France’s IFOP polling institute, said that managing the economy and epidemic was like “squaring the circle,” even more so now that “our maneuvering room is not at all what it was last March.”

He said France’s government now has less to spend to prop up businesses and people are less accepting of any new restrictions.

For Chancellor Angela Merkel of Germany, too, fears that a second lockdown would doom the fragile economic recovery have led to increasing pushback from citizens and companies.

Ms. Merkel said this week that she does not “want a situation like the one in spring to repeat itself” — meaning another lockdown — and warned on Friday that the next 10 days would be critical.

But the country’s mass-circulation Bild newspaper reflected the feelings of many Germans in its lead editorial on Friday, warning that a lockdown would lead to “mass unemployment, bankruptcies and never-ending strains on families and children.”

“It is not a case of what Merkel wants, however — she MUST, together with the states and towns and cities, prevent a second lockdown!” the Bild editors warned. “In a free country the majority cannot be made to pay for the behavior of a few idiots.”

In Germany, like in other countries, the focus is on changing the behavior of young people.

“Isn’t it worth it to be a bit patient now?” Ms. Merkel beseeched them. “Everything will return — partying, going out, fun without corona rules. But right now, something else matters most, being mindful of one another and sticking together.”

But public patience, in Germany and elsewhere, is precisely what is waning.

It is important to follow rules like mask-wearing and hand washing, said. June Nossin, 32, a Belgian-born therapist sitting at the terrace of a Parisian cafe. But there was a limit to what people could take.

“If everything is banned,’’ she said, ‘‘people are going to go crazy.”

Reporting was contributed by Raphael Minder from Spain, Christopher Schuetze and Melissa Eddy from Berlin, Adam Nossiter, Aurelien Breeden and Antonella Francini from France, Isabel Kershner from Jerusalem, and Elizabeth Povoledo and Emma Bubola from Italy.

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Alex de Minaur surges into US Open quarter-final with win over Vasek Pospisil

Australian young gun Alex de Minaur tamed Canada’s Vasek Pospisil 7-6(6), 6-3, 6-2 at the US Open on Monday to ease into his first grand slam quarter-final.

The first Australian to reach the men’s last eight at Flushing Meadows since John Millman in 2018, the 21st seed now awaits the winner of second-seeded Austrian Dominic Thiem and Canadian Felix Auger-Aliassime.

Alex de Minaur, pictured, will play either Dominic Thiem or Felix Auger-Aliassime in the quarter-final.Credit:Getty Images

When the US Open started, neither promising 21-year-old De Minaur nor 30-year-old Pospisil, who grabbed more attention in recent weeks as Novak Djokovic’s sidekick in starting a new players’ association, would have been tipped as a major winner.

But with Djokovic disqualified on Sunday after striking a line judge in the throat with a ball, Roger Federer and Rafa Nadal not at Flushing Meadows and Andy Murray suffering an early exit, the chances of de Minaur winning the title have grown.

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Centre urges 140 tests per million in all districts as coronavirus surges across India

The meeting was convened at a time when coronavirus pandemic cases have refused to show a downward trend

New Delhi: Amid unrelenting spike in cases of coronavirus across the country, Cabinet Secretary Rajiv Gauba on Thursday held a video conference with chief secretaries and health secretaries of nine states, including Maharashtra, Tamil Nadu, Andhra Pradesh and Karnataka – which have recorded the most number of positive cases and deaths due to the pandemic – directing them to ensure effective containment, contact tracing and surveillance as well as to ensure a minimum of 140 tests per million per day in all districts.

The meeting was convened at a time when coronavirus pandemic cases have refused to show a downward trend and India has recorded more than 33 lakh registered cases and over 60,000 deaths.


Maharashtra tops the list of positive cases and deaths as it has 7 lakh cases and 23,000 deaths respectively. Tamil Nadu is second with 3.9 lakh positive cases and 6,800 deaths, followed by Andhra Pradesh and Karnataka.

According to official sources, Gauba directed the chief secretaries to ensure that at least in 80 per cent of new cases, all close contacts should be traced and tested within 72 hours. The chief secretary also suggested ensuring a minimum of 140 tests per million per day in all districts while targeting a positivity/confirmation rate of less than 5 per cent.

The states were also asked to conduct regular monitoring of home isolation patients (tele-calling and home visits) and ensure timely admission to healthcare facility. They have been directed to put in public domain, the availability of beds and ambulances across COVID-19 facilities, while significantly reducing ambulance response time.


Monitoring of week-wise fatality rates for each health facility with particular focus on vulnerable patients having comorbidities, upgrading COVID-dedicated facilities based on case load, and keeping track of the availability and usage of necessary drugs, masks and PPE kits in all the above mentioned facilities, were some other important directives given to the states.

Chief secretaries and health secretaries of Telangana, Gujarat, West Bengal, Uttar Pradesh, Punjab and the union territory of Jammu & Kashmir, along with the Union Health Secretary, Director General of ICMR and Member (Health) of Niti Aayog Dr VK Paul were also present in the meeting.


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Coronavirus latest: S Korea on brink of near-lockdown nationwide as virus surges

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Large US corporate bankruptcies are running at a record pace this year and set to surpass the levels of the financial crisis in 2009. As of August 17, 45 companies with assets of more than $1bn filed for Chapter 11 bankruptcy, a common way for distressed businesses to reorganise, according to New Generation Research.

US stocks this week hit a record high, back losses inflicted by the coronavirus pandemic. But share prices of a fifth of S&P 500 companies were more than 50 per cent below their all-time highs on Friday and the average stock in the index is 28.4 per cent below its peak, according to Cornerstone Macro, a research group.

Frantic buying by Malaysian retail investors of hot stocks such as rubber glove makers has driven trading volumes on the country’s stock exchange to record highs, prompting the bourse to consider steps to curb the frenzy. Turnover in the year to date has already topped last year’s total by 20 per cent at 143.8bn ringgit ($34.5bn).

The French champagne industry cartel of growers and producers last week agreed to a sharp cut to the annual grape harvest as sales have collapsed during the coronavirus pandemic. “Champagne is synonymous with partying,” said David Faivre of Champagne R. Faivre. “And the whole world isn’t doing that right now.”

UK business activity stood at its strongest level in almost seven years in August, according to the latest purchasing managers’ index, rising to 60.3 from 57 in July. Tim Moore, economics director at IHS Markit, said “staycations” and the “eat out to help out” scheme, pictured, would boost service-sector growth in August.

Hedge fund Gammon Capital has chalked up a 600 per cent gain so far this year, ranking it as one of the world’s best performers, thanks to well-timed bets on volatility during the coronavirus-driven market ructions. The New York firm, correctly wagered on soaring volatility in early March.

Nippon Paint has agreed to a $12bn deal that will combine it with Singapore’s Wuthelam Holdings to create a regional titan. Masaaki Tanaka, Nippon chief executive, warned the effects of Covid-19 had been severe, particularly for the automotive paint business once expected to deliver strong growth in China.

The cost of London’s east-west Crossrail rail line has ballooned to nearly £19bn, with the heavily delayed project now not expected to open fully until mid-2022 as the pandemic compounded engineering problems. The price tag was expected to rise to £18.7bn, more than £450m over the last estimate in November.

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Euro zone trade surplus surges as imports drop, GDP and employment post record falls

FILE PHOTO: Containers and cars are loaded on freight trains at the railroad shunting yard in Maschen near Hamburg September 23, 2012. REUTERS/Fabian Bimmer

August 14, 2020

By Francesco Guarascio

BRUSSELS (Reuters) – The euro zone’s trade surplus with the rest of the world ballooned in June to 21.2 billion euros ($25 billion) as the bloc’s drop in imports of goods outpaced the fall of exports amid a global slide in trade due to the COVID-19 pandemic.

The bloc also suffered the biggest drop ever recorded in employment in the second quarter, the European Union’s statistics agency Eurostat said.

The agency also confirmed the record drop in the bloc’s gross domestic product last quarter, which fell by 12.1% compared with the first three months of the year.

Eurostat said on Friday the June trade surplus was wider than that posted a year earlier when the bloc had a positive balance of 19.4 billion euros. The reading also largely beat market expectations of a 12.6 billion euros surplus.

The surplus was more than twice as big as that recorded in May when the bloc had a positive balance of 9.4 billion euros.

The year-on-year improvement was caused by a 12.2% drop of imports, which more than offset the 10% fall in exports, Eurostat estimates showed.

From January to June, the bloc’s exports to the rest of the world fell by 12.7% to about 1 trillion euros compared with the same period in 2019. Imports dropped by 12.9% to 929 billion euros. Trade among euro zone countries was down by 13.6% to 869 billion euros.

The 19 countries of the currency bloc also traded much less among themselves. In June they exchanged goods worth 150.6 billion euros, down by 7.3% compared with the same month last year.

The larger EU, which is composed of 27 states, posted a 20.7 billion euros surplus in June, also caused by a bigger drop in imports than exports.

Among its top three trading partners, the EU reduced trade mostly with Britain, which left the EU on Jan. 31.

For January-June, exports to Britain fell by 21.5% from the same period last year, while imports dropped 17.5%, leaving the EU with a smaller trade surplus of 46.7 billion euros compared with 64.5 billion euros in the same period of last year.

Trade with the United States also fell significantly while the drop of exchanges with China was small.

In a separate release, Eurostat said euro zone employment in the period between April and June fell by 2.8% compared with the previous quarter, in the sharpest decline since data began to be collected in 1995.

The agency confirmed the estimates it released on July 31 of a record fall in euro zone GDP in the second quarter, the deepest since the time series started in 1995.

The new release on GDP is based on data from 13 of the 19 euro zone countries, including all the big ones. The earlier release included data from 10 states.

The record fall coincided with coronavirus lockdowns which many euro zone countries began to ease only from May.

($1 = 0.8473 euros)

(Reporting by Francesco Guarascio @fraguarascio; Editing by John Chalmers and Hugh Lawson)

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Iran’s stock market surges past key level to record high, as analysts warn of bubble

FILE PHOTO: A woman looks at an electronic board showing stock prices, following the outbreak of the coronavirus disease (COVID-19), at Tehran Stock Exchange in Tehran, Iran, May 12, 2020. WANA (West Asia News Agency)/Ali Khara via REUTERS

August 2, 2020

DUBAI (Reuters) – Iran’s main stock index broke through the key 2 million point mark for the first time ever on Sunday, state media reported, amid warnings that the market is overheating.

The Tehran Stock Exchange’s benchmark TEDPIX index gained 46,844 points in early trading, the official IRNA news agency said, up 2.4%.

The index closed at 1,961,649 on Saturday after surging by over 57,325 points, or 3.01%, on the day, according to the Tehran Stock Exchange (TSE) website.

Iran’s clerical rulers have been encouraging ordinary Iranians to invest in local stocks to boost the country’s economy, which has been hard hit by the reimposition of U.S. sanctions over Tehran’s nuclear programme.

Analysts and some lawmakers, however, have warned that the move might raise the risk of a stock market bubble as the rising market is at odds with Iran’s deteriorating economic fundamentals, which are also feeling the impact of the coronavirus outbreak.

Iranian authorities have denied that there is a bubble in the country’s stock market.

(Writing by Parisa Hafezi; Editing by Susan Fenton)

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