US existing home sales surge to highest level since 2006

Sales of previously owned homes in the US surged to their highest level in more than 13 years in July, as record low mortgage rates and demand for roomier dwellings continued to draw buyers into the market.

Existing home sales jumped 24.7 per cent against the prior month to a seasonally adjusted annual rate of 5.86m, the best pace since December 2006, according to figures published by the National Association of Realtors on Friday.

It was the second consecutive month of record gains, after existing home sales rose 20.7 per cent month-to-month in June. Sales in July were also up 8.7 per cent from a rate of 5.39m in July 2019.

“The housing market is well past the recovery phase and is now booming with higher home sales compared to the pre-pandemic days,” said Lawrence Yun, NAR’s chief economist.

Home-buying activity has been a bright spot as the US economy battles back from the depths of coronavirus shutdowns, fuelled by low borrowing costs and pent-up demand after lockdowns. Mr Yun noted that the shift to remote work has also contributed to the recovery, as current owners seek out larger homes. “This will lead to a secondary level of demand even into 2021,” he said.

Some economists have cautioned that higher lumber prices could lead the housing market to lose momentum in the fall, as builders grapple with rising costs.

All four major regions recorded double-digit sales increases versus June, the NAR said. The northeast was the lone region where sales were down year-on-year.

The national median existing-home price eclipsed $300,000 for the first time ever, growing 8.5 per cent year-on-year to $304,100. Housing inventory totalled 1.5m units at the end of July, which was down 2.6 per cent from June and 21.1 per cent from one year ago.

Parts of Colombia may not reach peak pandemic until next year – authorities

Gideon Long in Bogotá

Health authorities in Colombia have warned that the coronavirus pandemic might not peak in some parts of the country until early next year.

In a document sent to congress, the state’s National Health Institute (INS) said it expected the outbreak to peak in the capital Bogotá on September 6, in Cali on September 10 and in Medellín on September 24. Those three cities account for around a quarter of the country’s population of 50m.

In more isolated areas, the peak will come later, it said. In Cúcuta and Bucaramanga, in the northeast, it would hit in October, in Yopal, in the eastern lowlands, in November, and in Armenia, in the coffee-growing area in the west of the country, on January 14. It said its forecasts were based on mathematical models.

Colombia, Latin America’s third most populous country, has recorded over half a million cases of coronavirus, the eighth highest total in the world. It’s death toll stands at over 16,000.

In a piece of much-needed good news for the battered tourist industry, the INS said the pandemic had already peaked in the coastal cities of Cartagena and Barranquilla, on the Caribbean island of San Andrés and in the city of Leticia, a gateway to the Amazon.

The government has announced a partial resumption of domestic flights from September 1 in a bid to reactivate the sector and the broader economy, which contracted by 15.7 per cent year on year in the second quarter.

Infections across UK steady but fail to capture full picture, experts say

Clive Cookson in London

Coronavirus infections across the UK remain fairly stable, according to estimates from two official sources published on Friday, though government scientists say these do not take local Covid-19 outbreaks fully into account.

R, the average number of infections generated by an individual with Covid-19, is between 0.9 and 1.1 — up from a range of 0.8 to 1.0 last week, the Government Office for Science revealed. The daily growth rate is between minus 3 and plus 1 per cent.

The weekly infection survey in England by the Office for National Statistics shows no increase. It estimates that 24,600 people in the community had Covid-19 between August 7 and 13, equivalent to 1 in 2,200 people, and that there are 2,400 new infections per day.

These figures probably did not capture all the additional cases in local outbreaks, said a senior government scientist: “I think we are on a slight upward trend nationally but outside the infection hotspots it is probably flat.”

Public Health England said a total of 6,418 Covid-19 cases were officially registered during the past week, up from 5,763 last week.

“All these sources of information have strengths and limitations, and have their own peculiarities,” and said Professor Kevin McConway, a statistician at the Open University. “There inevitably remains some uncertainty about what’s actually happening.”

My overall feeling is that there is not a major cause for immediate concern about the national position on new infections and cases of Covid-19, but that we must continue to be very vigilant.

Pound weakens after Brexit talks show ‘little progress’

Sterling took a hit against the dollar after Brexit negotiators on both sides of the table bemoaned a lack of progress in the seventh round of talks.

A deal “will not be easy to achieve”, David Frost, the UK’s negotiator, said on Friday, noting that “time is short for both sides”.

Michel Barnier, his EU counterpart, said “the clock is ticking” and added that the UK “must come with clear, constructive proposals” to the next round of Brexit talks.

The coronavirus crisis may take some blame for eating into the time both sides might otherwise have allocated for the negotiations as an end-of-the-year transition deadline looms. The UK is no longer part of the 27-member bloc but talks between the two sides persist.

The pound has had a particularly topsy-turvy week, posting on Wednesday its biggest one-day drop in two months while a day earlier its 1 per cent rise became its largest daily gain since June 1. Those sharp moves put it on track to turn positive for the week, up 0.5 per cent against the dollar.

On Friday, the pound fell 0.5 per cent against the dollar at $1.3141 but versus the euro it was steady. One euro bought 89.75p in midday trading on Friday.

“We have had useful discussions this week but there has been little progress,” Mr Frost said in a statement on Friday, after the two sides concluded their seventh round of talks.

Meanwhile, data out on Friday showed a strong rebound in the economy, in stark contrast to the UK’s eurozone neighbours.

Retail sales volumes rose 3.6 per cent in July from a month earlier even as consumer confidence remained subdued this month.

Business activity growth rose to its strongest level in almost seven years, quite a change from a stumbling recovery seen in the parallel figures among Britain’s eurozone peers.

Certain industries, especially in the key services sector that accounts for 80 per cent of the UK economy, have been buoyed by temporary government initiatives such as value added tax cuts and discounts on dining out.

Euro knocked by economic data while stalled Brexit talks hit pound

The euro fell after eurozone data showed an economic recovery losing momentum this month while the pound slipped after Brexit talks showed little signs of progress.

The single currency fell 0.4 per cent against the dollar to $1.1814 after survey data showed a rebound in the bloc faltering, raising questions about the strength of the recovery in the third quarter. French and German figures reflected the slide in business activity.

The currency’s slide puts only a small dent in a sharp rally for the currency in recent weeks, which came after EU leaders agreed a bloc-wide rescue package and the dollar came under broad selling pressure.

There is “a clear sense of concern over the near-term outlook for the economy”, Derek Halpenny from MUFG said before the figures were released and after the European Central Bank said on Thursday there was “no room for complacency”.

Meanwhile, the pound also took a hit after the UK Brexit negotiator admitted there had been “little progress” this week in Brexit talks with the EU. David Frost added a deal “will not be easy to achieve” and noted that “time is short for both sides”.

“We have had useful discussions this week but there has been little progress,” Mr Frost said in a statement on Friday, after the two sides concluded their seventh round of talks.

European stocks rose after a mixed start to the day. Europe’s Stoxx 600 rose 0.4 per cent in midday trading and London’s FTSE 100 rose 0.2 per cent.

Number of Britons on furlough scheme peaked in May at almost 9m

Chris Giles

New figures from HM Revenue & Customs on Friday showed that the number of people on the government’s job retention scheme peaked at just below 9m in May and fell to 6.8m by the end of June.

Torsten Bell, director of the Resolution Foundation, praised HMRC for publishing for the first time the trajectory of furlough claims and said that since June, surveys suggested “the number fully furloughed fell faster so we’ll be well below 6.8m now”.

Covid-19 crisis delays London’s Crossrail train line as costs balloon

Philip Georgiadis, Acting Transport Correspondent

The coronavirus crisis has added to the delay in opening London’s Crossrail train line, which is now expected to open not until 2022 as its budget balloons to nearly £19bn.

The 118km Crossrail line linking east and west London was set to open in 2018 but the pandemic has compounded previous delays and overrunning costs.

The central section of the railway between Paddington and Abbey Wood is now set to open in summer 2022, the state-backed organisation running the project said on Friday. It could not offer a date for when full services from Heathrow in the west to Shenfield in the east will be introduced.

Crossrail said costs have increased by a further £1.1bn, leaving Europe’s largest infrastructure project more than £4bn over budget at £18.9bn.

The Covid-19 crisis has added to the spiralling delays due to a pause in work on the sites and “significant constraints on ongoing work and productivity” during government-imposed lockdown measures to halt the spread of the disease, the board said.

The site has 2,000 workers on it, less than half the pre-Covid number.

“Delivery of the Elizabeth line is now in its complex final stages and is being completed at a time of great uncertainty due to the risks and potential impacts of further Covid outbreaks,” Crossrail said.

Socialising pushes Spain’s Covid-19 rate far above rest of Europe

Daniel Dombey in Madrid

Coronavirus is spreading far faster in Spain than in the rest of Europe, confronting the country with a race against time to bring the outbreak under control before the return to school and work next month following the holiday season.

Figures published by the European Centre for Disease Prevention and Control, an EU agency, on Thursday indicated that in the previous 14 days Spain had reported about 139 new Covid-19 cases per 100,000 population.

Apart from Malta, no other European country had a ratio above 100, and the Spanish figures compare with ratios of 46 in France and 21 in the UK.

In three districts of Madrid, the Spanish region with most cases, the equivalent ratio is above 400 and in one it is almost 600.

Read more about the effects of Spain’s partying and drinking on Covid-19 rates

UK economic rebound accelerates in August

Chris Giles

Britain’s economy recovered extremely strongly in August, according to the latest purchasing managers’ index, with business activity growth at its strongest level in almost seven years.

The flash composite PMI index rose from 57 in July to 60.3 in August, with a large majority of businesses reporting that activity had improved in the month.

The strong UK data contrasted with much weaker readings across Europe on Friday, highlighting the reopening of the UK economy in July and August and government initiatives such as temporary lower VAT on the hospitality sector and the “eat out to help out” discounted restaurant meals.

Tim Moore, economics director at IHS Markit, which produces the figures, said: “August’s data illustrates that the recovery has gained speed across both the manufacturing and service sectors since July.”

But he cautioned that context was needed in interpreting the figures. “Positive signals for the recovery of course need to be considered in the context of UK GDP shrinking by around one fifth during the second quarter of the year,” he said.

Euro under pressure after disappointing economic surveys

Sarah Provan

The euro dropped after a flurry of eurozone economic data revealed how harsh a blow the coronavirus crisis has dealt to the region’s biggest economies.

The single currency fell about 0.4 per cent after figures suggested that the French and German economic recovery was losing momentum, raising questions about the strength of the rebound in the third quarter.

The euro was recently trading at $1.1842, down 0.2 per cent against the US currency. The fall puts only a small dent in a sharp rally for the currency in recent weeks, which came after EU leaders agreed a bloc-wide rescue package and the dollar has come under broad selling pressure.

Irish agricultural minister quits after seen to breach coronavirus rules

Arthur Beesley in Dublin

An Irish minister has resigned after he attended a golf dinner for 81 people in apparent breach of coronavirus guidelines signed off the day before by the government.

Dara Calleary was agriculture minister in Micheál Martin’s administration for one month, having been appointed after the prime minister sacked the previous minister — after 17 days — over a historic drink-driving case.

The three-party coalition took office in late June but it has had a very rocky start, facing public and business criticism for coronavirus restrictions as it confronts grave health and economic crises amid rising infections.

The government had tightened restrictions on Tuesday, limiting public and private gatherings and telling business to allow remote working where possible.

Mr Calleary was among dozens who attended the dinner in a county Galway hotel on Wednesday that was organised by a golf society in the Irish parliament. The other attendees included Phil Hogan, EU trade commissioner and a former Irish minister, and a recently appointed Supreme Court judge who was attorney-general in the last Irish government.

Guests were reportedly seated in two partitioned rooms but new pandemic rules that the cabinet approved only the day before state that “no formal or informal events or parties should be organised” in hotel restaurants.

Mr Martin said the minister’s attendance at the event “was wrong and an error of judgment”, saying in a statement that he had made “the right decision for the country” in standing down.

“People all over the country have made very difficult, personal sacrifices in their family lives and in their businesses to comply with Covid regulations,” the taoiseach said.

“This event should not have gone ahead in the manner it did given the government decision of last Tuesday.”

Mr Calleary, deputy leader of Mr Martin’s centrist Fianna Fáil party, was quick to say sorry on Thursday night when the Irish Examiner reported his attendance at the dinner. His resignation early on Friday came hours ahead of a cabinet meeting at which ministers are due to discuss whether to prolong special coronavirus measures in three midlands counties.

Aodhán Ó Riordáin, a member of the Dáil assembly for the opposition Labour party, criticised the event organisers, questioning whether there should be a police investigation in an event that breached coronavirus guidelines.

Mr Hogan and others should consider their positions, Mr Ó Riordáin said. “That anybody felt it was appropriate such an event is stunningly arrogant.”

Germany’s economic rebound shows signs of slowing as PMI falls

Martin Arnold in Frankfurt

German business activity lost some momentum in August as the rebound in Europe’s largest economy from the coronavirus pandemic showed signs of slowing, raising doubts about the strength of a third-quarter recovery.

The IHS Markit Germany flash composite purchasing managers’ index fell to 53.7 in August, down from 55.3 in July. Economists polled by Reuters had expected a much smaller decline to 55.

Phil Smith, an economist at IHS Markit, said activity in the German services sector was close to stalling in August after a jump in job losses that weakened domestic demand and a return of quarantine rules for travellers after coronavirus infections surged this summer.

German manufacturing seemed to do better, although Mr Smith said cuts to factory employee numbers showed “there is still ground to make up and businesses remain under pressure to cut costs”.

August’s drop in the PMI score indicates that the recovery in the German economy is slowing, with a falling proportion of businesses saying activity improved compared with the previous month.

However, the reading is still above the 50 mark that indicates a majority of businesses reporting an expansion.

IHS Markit’s monthly business sentiment surveys are not a measure of the extent to which economic activity has recovered relative to its pre-coronavirus level and while they signal how broad-based the recovery is, they cannot measure its pace.

The PMI index for German services was 50.8, down from 55.6 in July, while the PMI for German manufacturing was 53, up from 51 in July.

The German economy suffered a historic 10.1 per cent contraction in the second quarter, after a 2 per cent decline in the first quarter.

But retail sales in Germany rebounded to pre-crisis levels in May and industrial production and orders have also risen since June, albeit to a lower level, pointing to strong growth in the third quarter.

Germany’s economy has been hit less dramatically than other European countries, reflecting a less stringent lockdown, and high-frequency data such as the Google mobility report point to a faster return to normal levels.

Hopes of a V-shaped rebound are, however, being damped by the sharp increase in new coronavirus infections, which this week rose above 1,500 a day for the first time since May.

Flash estimates are published one week before the final results and are based on about 85 per cent of the typical responses.

French recovery loses momentum as business activity subsides

Martin Arnold in Frankfurt

French business activity undershot expectations in August as the economy lost momentum in its recovery from the coronavirus lockdowns, raising questions about the strength of the rebound in the third quarter.

The IHS Markit France flash composite purchasing managers’ index fell to 51.7 in August, from 57.3 in July. Economists polled by Reuters had expected a slight improvement to 57.4. Data for Germany showed a similar trend.

The euro fell about 0.3 per cent against the dollar after the news broke. It was recently down 0.1 per cent against its US peer.

This month’s fall in the PMI score indicates that the recovery in the French economy has slowed, particularly in manufacturing, with a falling proportion of businesses saying activity improved compared with the previous month.

However, the reading was still above the 50 mark that indicates a majority of businesses reporting an expansion.

IHS Markit’s monthly business sentiment surveys are not a measure of the extent to which economic activity has recovered relative to pre-coronavirus level and, while they signal how broad-based the recovery is, they cannot measure its pace.

The PMI index for French services was 51.9, down from 57.3 in July, while the PMI for French manufacturing was 49, down from 52.4 in July.

The French economy suffered a historic 13.8 per cent contraction in the second quarter, after a 5.9 per cent decline in the first quarter.

But retail sales in France rebounded to pre-crisis levels in June and industrial production also rose, albeit to a lower level, pointing to sharp growth in the third quarter.

Hopes of a V-shaped rebound are being damped by the sharp resurgence in new coronavirus infections, which this week rose above 4,000 per day for the first time since May.

Flash PMI estimates are published one week before the final results and are based on about 85 per cent of the typical responses.

UK retail sales volumes rise 3.6% as lockdown measures ease

Andrew Whiffin in London

British retail sales rose an above-expected 3.6 per cent in July from a month earlier, pushed up by online shopping, as consumers emerged from stringent lockdown measures put in place to contain the spread of coronavirus.

A Reuters poll predicted the monthly sales volume to rise 2 per cent.

Volumes excluding fuel rose 2 per cent last month compared with June, beating expectations for a modest 0.2 per cent gain, the Office for National Statistics said on Friday. Retail sales on the same measure were 4.4 per cent higher in July, compared with February and before the pandemic tightened its grip on the country.

“Retail sales have now regained all the ground lost during the height of the coronavirus restrictions as more stores open for trade,” said Jonathan Athow from the ONS.

Non-store volumes dipped 2.1 per cent in July as many shoppers took advantage of lockdown restrictions easing enough to allow more stores to reopen.

Shoppers overwhelmingly preferred to buy online with volumes up almost 50 per cent compared with pre-crisis levels in February. That preference was reflected in non-food store sales volumes that were 6.6 per cent off February levels as traditional non-food retailers struggle.

Clothing retailers remain the hardest hit, with July sales volumes 26 per cent below February levels. Household goods retailers held up better as consumers improved their homes during lockdown, which helped push volumes 6 per cent above February levels.

“Consumers are currently relaxed on their personal finances having saved over lockdown and on their likely overseas summer holiday, although this may change when government support pares off over the autumn,” said Jon Hudson of Premier Miton asset management.

UK public debt tops £2tn for first time on Covid-19 spending boom

Chris Giles in London

The coronavirus pandemic has severely undermined Britain’s public finances with the government’s debt exceeding £2tn for the first time and borrowing at its highest peacetime level in history.

The Office for National Statistics on Friday reported that public sector net debt rose another £20.2bn to hit £2.004tn in July. It is now higher than the annual value of goods and services produced in the UK.

With normal tax revenue statistics unreliable because statisticians cannot perform accurate accruals adjustments, the cash figures showed that the central government borrowed more in the first four months of the financial year than in the whole of 2009-10, the previous record year for the deficit.

The central government net cash requirement in July was £25.5bn, a deterioration of £33.6bn from the same month a year ago. Since the start of the financial year in April, the cash requirement has hit £199.5bn, a figure higher than the previously worst full year in 2009-10.

UK consumer confidence shows little change in August

Andrew Whiffin in London

UK consumer confidence remained subdued this month at levels last seen in early 2013 as the coronavirus pandemic maintained its grip on the UK economy.

GfK’s index recorded minus 27 in August, the same as July, but above the minus 37 low recorded in May, the depths of the coronavirus-related lockdown that kept people at home. The only bright spot was an improvement consumers expected in personal finances over the coming year.

“Circumspect consumers report they are more confident about their personal financial situation over the next year,” said Joe Staton, client strategy director at GfK. “The uptick from zero to +1 does not amount to much, and this can change quickly when furlough ends and the inevitable redundancies start.”

Expectations for the state of economy over the coming year worsened slightly to minus 42, from minus 41 in July, levels last seen in 2009 during the financial crisis.

“That the consumers’ mood remains in the trenches is a real concern for all concerned with the UK economy, as perceptions precede behaviour,” said Clive Black, head of research at broker Shore Capital.

“There is a sense of economic sleep-walking at the moment with the understandable fear among many that a cliff-edge awakening beckons in autumn as furlough in particular ends.”

He added: “It is hard to see a discernible uplift in consumer confidence anytime soon.”

South Korea cancels reserve training for 1st time in 50 years

Edward White

South Korea has cancelled its annual training for millions of reserve troops for the first time in more than 50 years because of fears over the country’s worsening coronavirus resurgence.

The annual training sessions, involving about 2.75m troops, were scheduled for September but have now been replaced with online programmes, a military spokesperson said on Friday. It was the first time the drills had been cancelled since 1968.

The cancellation marks the latest disruption to activities designed maintain preparedness for a potential North Korean attack, following a decision by General Robert Abrams, who leads the 28,500 US troops in South Korea, on Monday to reinstate tight restrictions over US garrisons positioned across the country.

The moves come as the Korea Centers for Disease Control and Prevention reported 324 new Covid-19 cases on Friday as officials grapple with the worst resurgence in local transmission since early March with nearly 2,000 new cases reported over the past eight days.

The South Korean government has over the past week reinstituted a series of measures in response, including urging people to avoid travel in and out of the capital Seoul, reducing school class sizes and banning large-scale gatherings.

Still, Asia’s fourth-biggest economy showed more signs of recovery with the pace of decline in exports slowing in the first 20 days of August, according to official data.

Exports for the period declined 7 per cent year on year in the period, an improvement from a decline of 13 per cent in July.

“We reiterate our view that sequential growth momentum should strengthen in Q3, even though the recent resurgence of the coronavirus will likely weigh on the economic recovery,” Nomura analysts said in a research note.

‘Elite’ Indonesians confident about Widodo’s Covid-19 strategy

Most well-educated Indonesians believe the country’s president, Joko Widodo, is capable of handling the Covid-19 pandemic successfully, according to a poll released late on Thursday.

The Indonesian Political Indicator Survey Institute said 14.8 per cent of Indonesian “elites” were very confident and another 42.8 per cent were “confident enough” that Mr Widodo would guide the country out of the pandemic.

Institute executive director Burhanuddin Muhtadi told the Antara news agency that 23.4 per cent of the elite were neutral, while 16.8 per cent had little or no confidence in the president.

The poll of 300 “opinion leaders” was conducted in late July and early August, Antara reported the institute as saying.

There have been 147,211 confirmed cases of Covid-19 reported in the country of 265m people as of Thursday, according to health ministry data.

The number of recovered cases passed the 100,000 mark on Thursday, while there have been 6,418 deaths.

China tech listings drop sharply due to pandemic, says PwC

The number of initial public offerings of Chinese technology, media and telecommunications companies fell in the first half of 2020, according to consultancy PwC.

There were 55 new listings in the January to June period, compared with 74 in the second half of 2019. Total IPO proceeds reached Rmb97.2bn ($14bn).

The largest IPOs were those of JD.com and NetEase, which raised Rmb27.5bn and Rmb22.1bn respectively in secondary listings in Hong Kong. China Resources Microelectronics raised Rmb4.3bn on Shanghai’s tech-focused Star market.

PwC said the Chinese tech IPO market showed strength despite the pandemic-induced decline.

“The listing momentum of Chinese TMT companies prevailed and was not dampened by the Covid-19 outbreak,” said Wilson Chow, PwC’s global TMT industry leader in Hong Kong.

He, however, cautioned on the effects of geopolitical tensions. “Global setbacks may cast an uncertain outlook for valuation and volume of issuances in the second half of the year.”

UK permit delay stresses NHS’s overseas doctors

Robert Wright in London

Doctors from overseas working in the UK’s National Health Service have faced threats of eviction, been prevented from switching jobs or had family members sacked because of delays by the UK government in issuing new residence permits they were promised at the height of the coronavirus pandemic.

The issue affects non-EU nationals — many of whom were exhausted after months battling Covid-19 — who have also been unable to travel abroad on holiday or to see their families.

Julia Patterson, a psychiatrist and chief executive of Every Doctor, a campaign group for doctors, told the FT she believed the problem was widespread among the 3,000 NHS staff the government estimated required the visa extension.

Read more here

Asia-Pacific shares rebound after US tech rally

Hudson Lockett in Hong Kong

Shares in the Asia-Pacific region rebounded on Friday as a rally in technology stocks on Wall Street buoyed investor sentiment despite signs of worsening US unemployment and manufacturing activity.

China’s CSI 300 index of Shanghai and Shenzhen-listed stocks led the region higher, climbing 0.7 per cent, while Japan’s benchmark Topix index rose 0.3 per cent and Hong Kong’s Hang Seng went up 0.5 per cent.

Asian stocks stumbled during the previous session on Thursday after minutes from the US Federal Reserve showed officials questioning the use of unconventional stimulus measures, such as the so-called yield curve control.

Many investors had been betting on the Fed taking such measures. But on Thursday, gains by top technology companies helped push the S&P 500 up 0.3 per cent by the close, even after new data showed more than 1m Americans had filed for first-time jobless benefits last week, snapping a two-week streak of falling claims.

Strategists warned that an impasse in Congress over renewing expanded unemployment benefits to soften the pandemic’s impact could pose a serious threat to an already shaky US economic recovery.

“Even amidst the worst labour market in modern history, Congress has not agreed to extend emergency unemployment benefits or the moratorium on evictions,” Ronald Temple, head of US equities at Lazard Asset Management, wrote in a note.

“The absence of $17bn per week of jobless benefits as well as protection from eviction is likely to cause negative repercussions for the broader economy if not corrected,” he added.

Unease over the widening divergence between main street and Wall Street has helped drive up US Treasury prices in recent sessions, pushing down yields. On Friday, the 10-year yield was holding steady at 0.6541 per cent but was down 0.05 percentage points for the week.

Biden lambasts Trump’s handling of pandemic

Demetri Sevastopulo in Washington

Donald Trump’s performance during the coronavirus pandemic emerged as a key theme on a night that Joe Biden accepted the Democratic party nomination for president.

Mr Biden lambasted Mr Trump’s handling of coronavirus, arguing that the US response was “by far the worst performance of any nation on earth”.

Former presidential candidate and New York mayor Michael Bloomberg said: “When confronted with the biggest calamity any president has faced in the modern era, Donald Trump spent the year downplaying the threat, ignoring science and recommending quack cures.”

Dozens of former Republican national security officials endorsed Mr Biden, including John Negroponte and Richard Armitage, both former deputy secretaries of state, and Chuck Hagel, a retired Nebraska senator and former defence secretary.

The group rebuked Mr Trump for his handling of Covid-19, accusing him of spreading misinformation and “wallowing in self pity”.

The Democrats also used the final night of their largely online convention to urge Americans to vote in the early-voting window, which has become more important because of the potential impact of the pandemic on in-person voting.

UAE bank returns fees to small businesses hit by Covid-19

A large bank in the United Arab Emirates has returned more than $1m in fees to merchants affected by the coronavirus pandemic, state media reported on Thursday.

First Abu Dhabi Bank disbursed about Dh4m ($1.1m) in rebates to small and medium-sized businesses as part of relief measures, the official WAM news agency reported.

The lender decided to return half the service fee charged for credit card transactions in the April to June quarter.

The bank also deferred for up to three months instalments on all small-business loans, WAM said.

New York state expands absentee voting amid pandemic

Mamta Badkar in New York

Andrew Cuomo, the New York state governor, has signed legislation allowing residents to request an absentee ballot if they are concerned about contracting coronavirus.

“All voters can now request an absentee ballot if they are concerned about Covid,” Mr Cuomo wrote on Twitter on Thursday. “Voters can request absentee ballots starting today.”

New York is one of the few states that had required a verifiable explanation — such as overseas military service or illness — to receive an absentee ballot.

But the new legislation puts the state in line with many others that make mail-in balloting an easy option for any voter.

Asia needs ‘better water management’ to combat outbreaks

More effective risk management is needed on health and water-related disasters in the wake of the coronavirus pandemic, an online conference was told on Thursday.

“The pandemic has highlighted the critical importance of water, sanitation and adequate hygiene services — or Wash — which are the primary line of defence against the spread of Covid-19 as well as waterborne and other diseases,” said Masatsugu Asakawa, Asian Development Bank president.

Water supply and distribution issues compound the risks from health crises, the International Online Conference to Address Water-related Disasters under Covid-19 was told.

“The hygiene needed to combat disease is a challenge for the 300m people in Asia and the Pacific who lack access to a safe water supply, and the 1.2bn who lack access to safe sanitation,” Mr Asakawa said.

“The massive disruptions caused by the pandemic have led to business continuity difficulties, not least in water resource management,” Angel Gurría, the OECD secretary-general, told the conference.

“Social distancing and travel restrictions have delayed key water infrastructure works, upgrades and repairs,” he added.

Pandemic-hit England school exam results improve

Bethan Staton and Laura Hughes in London and Chris Tighe in Darlington

Secondary school results improved sharply in England this year as GCSE and A-level students received teacher-assessed grades after the government scrapped a computing algorithm to set marks.

Figures released on Thursday showed the overall pass rate among 16-year-olds who took GCSEs rose to 78.8 per cent, from 69.9 per cent in 2019. Those who received the top grades, of 7 to 9, rose from 21.9 per cent to 27.6 per cent.

The proportion of 16-year-olds achieving level 4 and above in English rose from 70.5 per cent to 80.2 per cent and in maths from 71.5 per cent to 77.2 per cent.

Students did not sit exams this year because of the coronavirus pandemic.

Read more here

New cases drop below 200 in Australia’s Victoria

Australia’s second most populous state reported 179 coronavirus cases on Friday, the first time the daily count in Victoria has dropped below 200 since July 13.

There were nine more deaths, bringing the toll of fatalities in the state of 6.4m people to 376 and the case count to 17,862, the Victorian health ministry reported.

Residents of Melbourne, the state capital, are into the third week of a six-week, highest-stage lockdown, with outdoor activities limited to an hour a day of exercise.

On Thursday, Victoria’s government extended a ban on evictions and rental increases until the end of the year due to the pandemic.

The office of premier Daniel Andrews said landlords and tenants were eligible for up to A$3,000 (US$2,160) in rent relief payments.

US companies award executives big pre-bankruptcy bonuses

Joe Rennison in London and James Fontanella-Khan in New York

Companies across the US are awarding top executives multimillion-dollar “retention” bonuses shortly before declaring bankruptcy, angering creditors who claim the payments are rewards for failure.

The practice has become commonplace among distressed companies pushed over the edge by the coronavirus pandemic. The list includes high-profile collapses such as JC Penney, Hertz and Neiman Marcus, and smaller groups where revenues have been hit by the health crisis, such as century-old lawnmower engine maker Briggs & Stratton.

In most cases, the payments are tied to senior managers remaining in their roles while the company goes through a reorganisation. Supporters of the practice say retaining top talent is critical to a successful turnaround.

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Don’t link suicide and Covid-19, NZ health official urges

New Zealand health officials warned on Friday against drawing conclusions that the country’s suicide rate could be linked to the Covid-19 pandemic.

“Inaccurate, speculative and distressing information about the relationship between suicide risk and the Covid-19 response is unhelpful and has the potential to cause significant harm,” said Carla na Nagara, a former coroner who leads the health ministry’s Suicide Prevention Office.

She added:

While the Covid-19 response may have significant, long-term effects on people’s lives, an increase in suicides is not inevitable. There have been speculative comments on a wide range of platforms on media and social media of suicide numbers over recent months.

Figures released on Friday by Deborah Marshall, New Zealand’s chief coroner, showed 654 people died from suicide in the year to June 30, a three-year low and a drop of 31 deaths from the 2018-19 total of 685, the highest number reported since records began.

“While it is encouraging to see that the number of suspected suicides over the course of the year is lower than the past two years, there is no conclusion to be drawn from this,” Ms na Nagara said.

She criticised media and social media that speculated about the effect of lockdowns and movement restrictions on the suicide rate. “Focusing on suicide numbers will not help us to prevent suicide in New Zealand, and speculating about them can have the opposite effect,” she said.

Ms na Nagara called for a deeper understanding of suicide beyond the data. “We need to look behind the numbers to understand what is contributing to our suicide rate, and to the different rates within different population groups,” she said.

“Until we do that as a country, there will not be any enduring impact on what is a shamefully high suicide rate in New Zealand.”

Airbnb bans large groups over virus and violence fears

Alice Hancock in London

Parties of more than 16 people will be banned at Airbnb properties, after fears of virus contagion and a number of shootings at events held in its listings in the US prompted the short-term rentals group to revise policies.

The ban, which came into force on Thursday, is an extension of a previous moratorium on so-called party houses, which the company defined as “listings that create persistent neighbourhood nuisance”.

In the UK, US and Canada, the company has also introduced certain restrictions on under-25s using Airbnb homes.

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Return of Victoria lockdown drives fall in Australian business activity

Business activity across Australia fell back into decline during August as the reimposition of Covid-19 measures disrupted operations and hit demand in key areas such as Victoria, the country’s second most populous state.

New order inflows dropped after two months of growth while employment contracted at a steeper rate, according to the Commonwealth Bank’s purchasing managers’ index, which fell sharply from 57.8 in July to 48.8 in August.

Readings above 50.0 signal an improvement in business activity over the previous month, while readings below 50.0 show deterioration.

The Australian private sector economy fell back into a contraction midway through the third quarter, the Commonwealth Bank Flash Manufacturing PMI found, coinciding with the return of lockdown measures in Victoria and travel restrictions across state borders.

“The downturn in overall activity was primarily driven by the service sector, as manufacturing output continued to rise,” said Bernard Aw, the bank’s Singapore-based principal economist. “Though only modest, the reduction contrasted with two months of solid growth.”

The rate of decline in jobs also quickened as spare capacity developed, CBA noted.

“The fall in employment is the inevitable consequence of shutting down large parts of the Victorian economy,” said Gareth Aird, the bank’s head of economics in Australia.

He said companies collectively retain an optimistic view on the outlook despite the setback in Victoria. “Ongoing fiscal support for households and businesses remains critical to ensuring that optimism is not misplaced,” Mr Aird said.

US gun and ammunition sales surge in pandemic

Andrew Edgecliffe-Johnson in New York

Demand for guns and ammunition is accelerating in the US ahead of November’s election, driven by consumer concerns about protests and civil unrest and by Americans seeing hunting as a socially distanced leisure pursuit during a pandemic.

Ammo Inc, an ammunition manufacturer based in Scottsdale, Arizona, reported on Thursday that its revenues had surged 125 per cent to $9.7m in the three months to June.

“Extraordinary” demand from its commercial segment, which sells to the hunting, sports shooting and self-defence markets, had powered its order backlog to a record $45m, said Fred Wagenhals, chief executive.

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Restrictions set to remain as Hong Kong reports 18 new cases

Hong Kong announced 18 new cases of Covid-19 on Thursday, and two more deaths, as officials hinted curbs on dining and other gatherings would persist into September.

The Centre for Health Protection said the new cases brought the city’s total to 4,605.

Describing Hong Kong’s situation as “severe epidemic”, CHP called on the public to “avoid going out, having social contact and dining out”.

Local media reported that social-distancing measures, including a ban on nighttime dine-in service at restaurants, were unlikely to be eased before September 15 at the earliest.

Restrictions were expected to stay in place until a citywide Covid-19 testing programme has been completed.

The Hong Kong government has set up 150 voluntary testing stations, repurposing buildings such as community halls and even ferry piers to test as much of the population as it can.

A 72-year-old woman in Prince of Wales Hospital and a 71-year-old man in Kwong Wah Hospital became the city’s latest Covid-19 fatalities, the government said.

Dining discount scheme lifts UK seaside towns

Andrew Whiffin in London

UK seaside towns appear to have been some of the biggest beneficiaries of government measures to stimulate activity in high streets and restaurants, according to research by a public policy institute.

Bournemouth and Southend experienced the largest increase in visitor numbers during the first weeks of the “eat out to help out” scheme in early August, a study by the Centre for Cities said.

“The centres of coastal towns have seen some of the biggest increases in footfall over the summer,” said Lahari Ramuni, a researcher at the institute. “However … the biggest city centres have seen the biggest dips in footfall and they haven’t yet recovered.”

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Auckland Covid-19 cluster reports 5 more cases

New Zealand confirmed five new cases of Covid-19 on Thursday.

All are linked to an Auckland cluster that dashed hopes the country had eliminated the virus and resulted in the postponement of a general election by a month.

There are 133 people linked to the cluster in quarantine, comprising 65 people who have tested positive and 68 of their household contacts, the health ministry said in a statement.

Six other people are receiving hospital care.

On Friday, New Zealand announced that businesses could apply for a two-week wage subsidy of up to NZ$1,171.60 (US$766) per worker to help cover wages.

Grant Robertson, finance minister, said the new wage subsidy would support about 930,000 jobs.

“The government has stood beside businesses and workers as we respond to the impacts of the global pandemic,” said Mr Robertson, pictured, who added that new and existing wage subsidies had protected more than 1.7m jobs. “And we know it works.”

ECB fears recovery at risk from a delayed jobs surge

Martin Arnold in Frankfurt

The eurozone is likely to suffer a sharp increase in unemployment this autumn even as the economic recovery from the coronavirus pandemic takes hold, the European Central Bank has warned.

Top ECB policymakers voiced fears at their monetary policy meeting last month that the labour market was lagging behind the rest of the economy, according to minutes published on Thursday.

Philip Lane, ECB chief economist, told the meeting that “surveys suggested that employment was lagging output, with actual and expected declines in employment and income, amid precautionary household saving, weighing on consumer spending”, the minutes said.

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US reports below 50,000 new cases for fifth day in a row

The US reported new coronavirus cases and deaths on Thursday that hovered around levels of the past few days, but remained below levels from a week ago.

A further 1,117 people died, according to Covid Tracking Project data, down from 1,416 on Wednesday and the third day in a row that fatalities have risen by more than 1,000.

Deaths in hotspot states such as Texas (234) and California (181) hovered at more elevated levels than Florida (119).

Over the past 24 hours, US states reported 43,245 people tested positive for coronavirus, down from 45,103 on Wednesday.

This was the first time since late June infections have risen by fewer than 50,000 a day for five days in a row.

Okinawa anger stoked by US bases coronavirus surge

Kana Inagaki and Leo Lewis in Tokyo

Shortly after July 4, a video emerged online showing crowds of revellers dancing at a party on one of Okinawa’s beaches. The event to celebrate American Independence Day was hosted by a former US marine and not one person in the video was wearing a face mask.

To ordinary Japanese watching on social media — who had spent four months in self-restrained voluntary lockdown — it was a stunning snub to the nation’s efforts to keep coronavirus under control.

“We’re all being extra cautious not to allow any infection so to see that video made me so angry and disappointed,” said Chieko Oshiro, who heads a local residents’ group in Okinawa, Japan’s southernmost island.

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NYC reaffirms pledge to reopen schools on September 7

New York City said it would reopen schools on September 7 despite union scepticism, with the mayor claiming the metropolis is the “safest major city in America”.

“Our plan to reopen our schools is the most rigorous in the country, and I want parents to know that we are taking absolutely every precaution to keep their children healthy and safe,” mayor Bill de Blasio said on Thursday.

The plan is for children to attend in-person classes on one to three days a week.

City officials insist the education system will be ready in three weeks, despite the largest teacher union saying on Wednesday that no schools in the city should reopen in autumn unless they meet health criteria that the group is calling for the mayor to adopt.

Michael Mulgrew, president of the United Federation of Teachers, said the current plan laid out by the city’s education department lacked transparency and clarity and contained many requirements that were unattainable at school level.

Officials rejected the idea that schools were not ready.

“We’re a few weeks away from the first day of school, and [personal protective equipment] deliveries are happening every day, families are getting their schedules, and schools are organising their classrooms,” said NYC schools chancellor Richard Carranza.

AMC chain begins to reopen some US cinemas

The AMC chain began to reopen some of its US cinemas on Thursday, citing a lower risk posed by the coronavirus pandemic.

“Many theatres are now open, and most theatres will reopen by Labor Day weekend,” it said, referring to the traditional end-of-summer marker in the US, which falls on September 7.

The chain, which has more than 11,000 screens in about 1,000 US locations, said it would begin by opening about 15 per cent of its cinemas, including the one in Austin, Texas (pictured).

The company said its cinemas would be patronised at 40 per cent or less capacity, based on local guidelines. Moviegoers would have seats blocked on either side for social distancing.

AMC said patrons of auditoriums without reserved seating would have to make their own arrangements to ensure adequate distancing.

California, Texas report fewer new cases amid positive Florida trends

Peter Wells in New York

New coronavirus deaths in California remained elevated on Thursday, while new infections remained below average.

A further 163 people died, the state government revealed in the afternoon, down from 181 on Wednesday.

Over the past 24 hours, 5,920 people tested positive for Covid-19, down from 6,164 on Wednesday and below the seven-day average of 7,372 each day.

Texas reported one of its smallest one-day jumps in coronavirus cases this month, but daily deaths remained elevated.

A further 4,923 people tested positive for Covid-19, state authorities said, down from the 6,474 new cases that were reported on Wednesday.

Texas has reported fewer than 5,000 cases a day just four times so far in August, according to an FT analysis of Covid Tracking Project data, and excluding August 2 when a scheduled update of the state’s online dashboard resulted in no data being reported.

The latest coronavirus figures from Florida continued to show encouraging downward trends in cases, while deaths also eased from elevated levels earlier this week.

A further 4,555 people tested positive for Covid-19 over the past 24 hours, the state health department revealed on Thursday, up from 4,115 Wednesday but below the average over the past week.

Of nearly 77,200 tests Florida conducted over the past day, 6.78 per cent tested positive, down from 7.06 per cent on Wednesday. This was the first time since June 14 that the positivity rate has been below 7 per cent.

The National Hurricane Center said on Thursday it is monitoring two tropical depressions in the Gulf of Mexico that could threaten Florida in the next few days.

However, some of the state’s beachgoers (pictured) appeared to be undeterred by the threats from the weather or Covid-19.

Travel operators call for end to ‘stop-start’ UK policy

Alice Hancock and Laura Hughes in London

UK travel industry operators have called on the government to end its “stop-start” strategy of quarantining countries with rising coronavirus rates after the announcement on Thursday that Portugal is now safe to visit but Croatia is not.

“There is a ridiculousness to [these changes to travel advice] because holiday operators can’t stop-start at the rate that the government can,” said Simon Cooper, chief executive of online travel company On The Beach.

“Consumers are having to change their decisions each week based on this quarantine league table, which is short-termist,” said Paul Charles, whose PC Agency advises more than 30 companies.

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News you might have missed …

New claims for US unemployment aid unexpectedly rose back above 1m last week signalling an uneven recovery for the labour market from the coronavirus pandemic. There were 1.1m initial jobless claims on a seasonally adjusted basis last week, the US Department of Labor said on Thursday. That was higher than economists’ forecast for 925,000 claims.

The Nasdaq Composite notched its second record high this week, as technology shares led the market higher. The tech-weighted Nasdaq gained 1.1 per cent, with Apple and Microsoft each advancing more than 2 per cent. The Dow Jones Industrial Average rose 0.2 per cent. The broader S&P 500 was up 0.3 per cent, close to its record high set on Tuesday.

Travellers returning to the UK from Portugal will no longer have to self-isolate on their return after the government lifted quarantine restrictions on Thursday. Grant Shapps, the transport secretary, announced that the popular holiday destination had been added to the government’s “travel corridors exemption list”.

Northern Ireland has reduced the number of people allowed to gather both indoors and outdoors and stopped any further relaxation of lockdown measures. The limit on outdoor gatherings has been reduced from 30 to 15 people, and the limit on gatherings indoors in private dwellings has been cut from 10 to six people (from two households).

Scotland will allow bingo halls, casinos and amusement arcades to reopen next week, but its government has cautioned that recent coronavirus outbreaks will mean any easing of lockdown measures will be conditional. The country reported 77 Covid-19 daily cases on Wednesday, the highest number in nearly three months.

Estée Lauder delivered a disappointing quarterly forecast. The beauty group behind labels such as MAC and Too Faced said it was cutting 1,500 to 2,000 positions globally, about 3 per cent of its workforce, and would close about 10 per cent to 15 per cent of its freestanding stores worldwide. It expects to incur restructuring and other charges of $400m to $500m.

Frasers Group plans to invest more than £100m in technology to support its move upmarket. The UK retail group’s pre-tax profit before exceptional items for the year to April 26 fell to £143m, from £179m last year, on sales that were slightly higher at £3.95bn. An analyst survey compiled by Capital IQ forecast pre-tax profit at £135m.

Premier Oil announced a $530m equity raise as part of a refinancing of its $2.9bn debt facilities, as the North Sea oil and gas group seeks to draw a line under a torturous seven-month battle to put its finances on a more stable footing. The majority — or $300m — of the equity share will be used to pay down its $2.4bn debt pile.

Chilean copper miner Antofagasta said it would pay a dividend of 6.2 cents a share, down from 10.7 cents a share a year earlier. Earnings before interest, tax, depreciation and amortisation fell 22 per cent to $1.01bn for the six months ending June 30. Revenues fell 15 per cent to $2.14bn.

Car dealer Lookers has delayed publishing its 2019 annual results for a fourth time as it widened an audit probe into potential fraud in its previous accounts. The group generated bumper trading during July as car demand returned after being pent up during coronavirus-related lockdown measures that kept drivers at home.


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