UBS believes gold prices will hit $ 2,000 an ounce in late September, driven by the weaker dollar, making it cheaper for foreign investors to buy precious metals. Historically, low interest rates also reduce the attractiveness of other safe-haven investments, such as US Treasury bonds.
But the virus perspective is undoubtedly part of the picture.
“Not only gold rose against the dollar, but almost everything,” Societe Generale strategist Kit Juckes said Monday. “That is partly due to the feeling that the United States is having a harder time controlling the virus than others, which will underperform the United States economy.”
That makes it crucial that American lawmakers get it right for the next round of aid.
What’s in the bill: White House officials and Senate Republicans are finalizing legislation that would offer another round of $ 1,200 checks to many Americans, my CNN colleagues report.
It wouldn’t renew the total $ 600 weekly unemployment insurance upgrade because it will expire shortly, which Republicans have argued is a disincentive for people to return to work. Instead, workers would receive a refund of up to 70% of lost wages.
This benefit remains a key point of discussion with Democrats and could serve as a barrier to passing the bill before the August recess.
“Let me say: the reason we had $ 600 was its simplicity,” House Speaker Nancy Pelosi said Sunday, noting that calculating 70% of someone’s lost earnings would be difficult for administrators. . “Why don’t we make it simple?”
Goldman Sachs said in a note Sunday that it believes a roughly $ 1.5 trillion bill will get legislative approval before the August vacation. But big issues are still up for grabs, from the scope of unemployment benefits to tax relief for struggling states.
Travel stocks fall on second wave fears
Travel stocks are shrinking again in Europe as fears of a second wave of coronavirus infections scare investors.
Short-term bookings in places like Barcelona are already having an impact as infections increase, Ryanair said. The carrier predicts that its traffic this year will drop at least 60%, from 149 million passengers last year to 60 million passengers this year at best.
Investor insight: Ryanair shares fell 5% in early trading.
It is not the only travel company to take a hit. Concerns about a recovery in regional tourism grow. The UK said over the weekend that it would require all people returning from Spain to isolate themselves for 14 days.
Still, the euro continued its rise against the US dollar, rising another 0.4% on Monday to nearly $ 1.17. The coin has gained more than 9% from its recent lows in late March, helped by concerns about the economic outlook in the United States and a large aid package signed by EU leaders last week.
Hong Kong’s ‘East Nasdaq’ makes debut
Ant Group, the company behind Chinese mobile payment giant Alipay, last week chose Hong Kong and Shanghai for its IPO.
The new index, which Citi analysts called the “Nasdaq of the East”, could help attract quality tech companies to Hong Kong at a difficult time. The city’s role as a global financial center has been shaken in recent months by tensions between the United States and China, which have escalated as Beijing moves to tighten its grip on the city.
Until next time
Also Today: Durable Goods Orders in the US for June are posted at 8:30 am
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