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Fed Vice Chairman Clarida: The economy may need more financial and monetary assistance;
Fed Vice Chairman Richard Clarida said on Thursday that in addition to the unprecedented actions that have been taken, US policymakers may also need to provide additional support to the severely hit economy. "Depending on the development process of the epidemic and the depth and duration of the economic downturn caused by the epidemic, additional monetary and fiscal policy support may be required."

Although Clarida promised that the Fed will continue to take positive actions to offset the impact of the coronavirus crisis on the economy, he also emphasized the limitations of the Fed ’s support-only borrowing foreign money instead of spending money and saying that budgetary action is essential. "He said that direct financial support can play a key role, not only to help families and businesses maintain their livelihood when needed, but also to maintain the productivity of the economy after the economy comes out of recession.

New York Federal Reserve Chairman Williams (Williams): The United States can afford to provide more support for the economy;
New York Federal Reserve Chairman John Williams said that even if the United States has authorized nearly $ 3 trillion in financial relief measures to deal with the impact of the coronavirus epidemic, the country can still afford to provide substantial additional support for the economy.

"From my point of view, we can afford more government support for the economy," Williams said in a virtual discussion in New York on Thursday. "Depending on how the economy develops and recovers, we will observe whether More financial and monetary support is needed, and how it should be designed to help the economy embark on a strong and sustainable path. "

New York Fed Chairman Williams (Williams): The US economy is expected to rebound in the second half of 2020;
Williams expressed confidence that the US economy will fully recover, but believes that it may take some time for the economy to return to the level before the outbreak. "I expect the economy to rebound in the second half of the year, and I think consumers may be hesitant to return to normal life."

The New York Fed governor warned that it is too early to know where the economy is heading, because it still depends on the path of the virus. But he added that relaxing social alienation measures will help to better understand the impact of the coronavirus epidemic on the US economy. He also played down the market's expectations of the Fed following other central banks' negative interest rates in the United States.

The United States continued to record a record number of jobless claims last week as a second wave of layoffs occurred as the economy restarted
More than two months after the United States imposed a blockade to curb the spread of the new crown epidemic, millions of Americans claimed unemployment benefits last week, indicating a second wave of layoffs in industries that were not initially affected by pandemic-related lockout measures. The US government stated that as of the week of May 16, the number of jobless claims was 2.438 million after seasonal adjustment, which was lower than the 2.687 million the previous week. As of May 9, the number of retired unemployment benefits surged 2.525 million to a record 25.073 million.

U.S. second-hand housing sales in April hit the largest decline since 2010;
U.S. second-hand housing sales recorded the largest decline since mid-2010 in April because the New Crown epidemic emptied national demand at the beginning of the critical spring sales season. According to data from the National Association of Realtors, sales of second-hand homes fell by 17.8% month-on-month in April to a year-on-year rate of 4.33 million units, the largest decline since the expiration of the home purchase tax relief policy in July 2010. The annual discount rate in April was also the lowest since September 2011; economists surveyed by Bloomberg expected a median of 4.22 million.

The IHS Markit index shows that corporate activity in the United States stabilized in May;
The decline in corporate activity in the United States in May eased more than a month ago. The economy began to gradually get rid of the corona-virus-related epidemic blockade, but output was still significantly weak. The IHS Markit Manufacturing and Services Purchasing Managers ’Composite Index, released on Thursday, improved 9.4 points to 36.4, but it is still the second lowest since records were recorded in 2009. A reading below 50 indicates that the industry is in contraction, and the data is consistent with the indexes of Europe, Japan and Australia, all indicating that the global economy is in recession. This month's IHS Markit service industry index climbed to 36.9 from 26.7 in April, which was the lowest since October 2009. The manufacturing index rose from 36.1 to 39.8.

The US senator urged the extension of the exemption period for small business PPP loans;
A builder of the US Small Business Payroll Protection Program (PPP) urged the Senate on Thursday to quickly vote on the extension of the plan before the Memorial Day holiday break. Senator Marco Rubio, chairman of the Small Business Committee, said he was “increasingly optimistic” that he would get bipartisan support to extend the loan period. The current rule is that the time is 8 weeks, and small businesses must use loans to pay for employees and other expenses during this period in order to be eligible for loan exemption. He expects the Senate to pass an initiative this week to extend the loan exemption period to 16 weeks.

The IMF chairman called on the banking industry to suspend dividends and stock repurchases;
Kristalina Georgieva, chairman of the International Monetary Fund (IMF), said banks need to collectively suspend dividend distributions and share repurchases to enhance the resilience of the financial system and resist the impact of the new crown virus pandemic. Banks must have strong capital and liquidity positions to support new credit. Bank buffer capital needs to be strengthened by retaining the proceeds of continuous operations. "Banks acting alone may be punished by investors who do not understand the need to limit dividends," considering the adverse economic conditions caused by the pandemic, determine whether and to what extent banks should be restricted from paying dividends.

The British economy continued to shrink due to the blockade measures in the epidemic in May, but the pace has slowed down;
The British economy continued to shrink in May because the government is still implementing most of the anti-epidemic blockade measures, but the rate of contraction has slowed down compared with April. The May IHS Markit composite index was 28.9, but it was higher than April ’s 13.8. In addition, another survey by the British Industrial Union (CBI) showed that in the three months to May, British manufacturing output fell to its lowest level in 1975 since it was recorded.

The United States provided 1.2 billion US dollars to help AstraZeneca vaccine research and development, and "order" 300 million doses;
British pharmaceutical company AstraZeneca (AstraZeneca) in the trial phase of the new crown vaccine can initially supply 1 billion doses, the United States pledged to provide up to 1.2 billion US dollars to win nearly a third of them. World powers are scrambling to buy medicines to help the economy return to normal.
The Trump administration announced its intention to withdraw from the Open Sky Treaty;
According to foreign media reports, the Trump administration announced its intention to launch the Open Sky Treaty. It is reported that the treaty was signed in 1992 and entered into force in 2002. According to the treaty, a Contracting State may conduct unarmed reconnaissance on the entire territory of other Contracting States in order to verify the other party ’s implementation of international arms control treaties. Airplanes can be equipped with camera equipment, radar and infrared instruments, but they must not carry weapons. There are currently 34 parties to the treaty, including Russia and most members of the North Atlantic Treaty Organization. (China Daily)



News and Data




Existing Home Sales (Apr)





Retail Sales (MoM) (Apr)





ECB Publishes Account of Monetary Policy Meeting 





Core Retail Sales (MoM) (Mar)


Summary of Institutional Perspectives

Rabobank: Bank of Japan may launch loan plan

Rabobank said that later in the day the Bank of Japan will announce the May interest rate resolution, which may be to enhance the Bank of Japan ’s flexible image; the purpose of the meeting is to outline the details of the bank ’s plan to provide low-interest loans to small businesses, companies will be able to 0.1% Interest rates borrow from financial institutions, and financial institutions will be able to obtain loans from the Bank of Japan at zero interest rates. It is expected that a series of new policy measures issued by the Bank of Japan will not have much impact on the yen

Société Générale: If the UK implements negative interest rates, it will be very bad

① Kit Juckes, foreign exchange strategist of Societe Generale, said that in the UK, inflation has further declined, and the prices of transportation, fuel, utilities and clothing have fallen, surpassing pizza, burgers, whiskey, beer and games (preschool education and computer / game consoles) Price increase

② This paints a picture of “blocking life”, but it also enlivens the debate on negative interest rates, especially when members of the Monetary Policy Committee discuss this issue; no economy implements negative interest rates worse than the United Kingdom.

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