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Australia’s economy goes from bad to worse. On Tuesday last week, Australia’s bureau of statistics said the last week of June experienced the latest fall in the number of jobs since the end of April. The figure for the weekly payrolls job report dropped by 1% as the second wave of the coronavirus cases caused anxiety among businesses. According to the report, health professionals suffered the most from this decline. Meanwhile, the surge in the price of iron ore in the past few days and its strong demand might help the country to cope up with the pandemic. Prices rose to $112 per ton. However, the tension between its largest importer (China) and military ally (United States) might derail the industry’s growth. Meanwhile, following Fitch Ratings AAA outlook with Switzerland, it has now reaffirmed its AAA rating with Zurich. The city’s sovereign-like power under the Swiss federal system has transformed it to a global financial district.
The political and economic interest of Turkey is under pressure. The European Union has given Turkey another month to open a dialogue with regards to its drilling activities in Cyprus and Greece, both of whom are members of the European Union. Also, the bloc questioned Ankara’s involvement in the war in Libya and Syria, which might hurt its accession bid. It’s failure to answer these questions might lead to an economic sanction. Furthermore, the country’s ex central banker said the country has no more room for interest rate cut. Since the pandemic began in March, the country’s central bank has already slashed 250 basis points on its rate, from 10.75% to 8.25%. Cutting the rates further could trigger another inflation hike. In June, the inflation rate was recorded at 12.6%. The low interest rate has also caused a credit boom in Turkey, which can trigger another flash crash. Due to the pandemic, Turkey’s economy is expected to contract by 5.0% this 2020.
Norway is expanding its oil and gas industry through tax refunds by up to 100% of the exploration expenses. The possible tax reform was announced just weeks after the country said it is exploring the possibility of finding oil reserves in the arctic. Around 47% of the country’s export value was from its oil and gas industry and its $1 trillion sovereign wealth fund was established through the surplus from this export. Currently, Norway’s June export was down by 45.8% YoY. However, the recovery in crude oil prices is expected to restore balance among energy companies’ revenue. On the other hand, the European Union is having a hard time bringing back the economic activity inside the bloc. Consumer Price Index (CPI) report recorded 0.3% growth for June on Friday, July 17. The European Union’s failure to force member states to contribute a higher amount on the bloc’s economic aid program is hurting the performance of the single currency in the near term.
The US retail sales report almost fully recovered its March and April decline after it reported 7.5% growth on Thursday, July 16, for the month of June. This figure followed the 17.7% surge in May as the country began to reopen. Meanwhile, Russia’s retail sales haven’t seen growth since March. On Friday, June 17, it reported another decline of 7.7% for the report. The same thing happened with the country’s monthly YoY GDP report which plunged by -6.4% on Friday, July 17. Unemployment was also at its highest in 8 years at 6.2%. Also, its industrial production report of -9.4% was among the highest monthly decline since the 2008 Global Financial Crisis. On the other hand, the United States’ initial jobless claim continues to slow down. Record for the second week of July was 1,300K, down from 1,314K in the prior week. The figures for the United States and Russia will send the pair towards the 75ish price level.
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