Good morning, and welcome to our rolling coverage of the world economy, the financial markets, and business.
As we start the week, there have been new Covid-19 outbreaks in Asia leading to local lockdowns, and the worldwide number of cases has passed 16.25 million, with 646,841 deaths, according to a Reuters tally.
China has posted the highest daily increase in new coronavirus cases since April; Australia has recorded a record daily rise in new cases after a flare-up in southeastern Victoria; Vietnam has locked down the city of Danang after three residents tested positive for Covid-19; and Hong Kong is set to announce further restrictions, including a ban on restaurant dining and making face masks compulsory outdoors, according to local media.
You can read more on our main Covid-19 live blog here:
To make things worse, tensions between China and the US are rising, as China said it had taken over the premises of the US consulate in the southwestern city of Chengdu. It ordered the facility to be closed in retaliation for being ousted from the Chinese consulate in Houston, Texas.
It’s no surprise that gold prices are surging, as investors rush into safe-haven assets. Spot gold jumped more than $30 to a new record high of $1,943.93 an ounce this morning, while silver prices are also rallying, up 6.2% at $24.16 an ounce.
The dollar is sliding and fell to its lowest level in a year – because of mounting US-China tensions, fears about the US and global recovery and the expectation that the US Federal Reserve could soften its inflation stance at its meeting on Tuesday and Wednesday, which would allow interest rates to stay low for longer.
Over here, Ryanair, Europe’s biggest airline, has posted an after-tax loss of €185m in the three months to 30 June when the Covid-19 crisis reduced traffic by 99%, and the airline says it is impossible to say whether it will make a profit this year. At the end of the quarter, Ryanair moved from a skeleton service to flying 40% of its normal schedule.
Ryanair’s finance chief Neil Sorahan said the budget carrier was not planning to cut flights to Spain – despite the UK government’s “regrettable” decision to advise against all non-essential travel to the country, and the reimposition of a two-week quarantine on all travellers arriving from Spain after a surge of Covid-19 cases.
It’s a quiet day on the economic data front, but we are getting the closely watched Ifo business survey from Germany mid-morning and US durable goods orders at lunchtime.
- 9am BST: Germany Ifo business climate index for July (Forecast: 89.3)
- 1:30pm BST: US Durable goods orders for June (Forecast: 7.2%)