February 24, 2020
Global Safety Rush Puts U.S. Yields Within Sight of Record Low
“Traders are preparing for the worst as the coronavirus spreads across national borders, stoking fears about its economic impact. Investors snapped up U.S. Treasuries, sending the yield on 10-year securities to the lowest level since 2016 and within 10 basis points of its all-time low. Bets on Federal Reserve easing this year surged. In Europe, the entirety of Germany’s bond yield curve fell back below 0% for the first time since October, meaning that investors may have to pay for the privilege of holding them to maturity. Global stock indexes tumbled, with S&P 500 futures dropping 2.4%, the most in six months.”
U.K. Refuses to Prepare Ports for Goods Checks in New Brexit Row
“The British government is refusing to ask ports to get ready to implement new checks on goods moving between Britain and Northern Ireland, a decision that risks inflaming tensions between London and Brussels ahead of next week’s trade talks. Prime Minister Boris Johnson’s spokesman, James Slack, insisted businesses in Northern Ireland will have unfettered access to the market of mainland Britain. And, he said, the government had not asked any ports to prepare for new checks on goods moving between Britain and Northern Ireland.”
Millions of Chinese Firms Face Collapse If Banks Don’t Act
“Brigita, a director at one of China’s largest car dealers, is running out of options. Her firm’s 100 outlets have been closed for about a month because of the coronavirus, cash reserves are dwindling and banks are reluctant to extend deadlines on billions of yuan in debt coming due over the next few months. There are also other creditors to think about. “If we can’t pay back the bonds, it will be very, very bad,” said Brigita, whose company has 10,000 employees and sells mid- to high-end car brands such as BMWs. She asked that only her first name be used and that her firm not be identified because she isn’t authorized to speak to the press.”
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