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Chinese language shares fall round 1%; China holds regular on benchmark lending price

Chinese stocks fall around 1%; China holds steady on benchmark lending rate

SINGAPORE – Asia Pacific stocks fell mainly in Friday trading as China left its policy rate unchanged.

Mainland stocks fell as the Shanghai Composite fell about 1% and the Shenzhen stake fell 1.013%. Hong Kong’s Hang Seng index fell 1.18%.

China’s one-year policy rate (LPR) and five-year LPR were both left unchanged on Friday at 3.85% and 4.65%, respectively. According to Reuters, this was in line with the expectations of the majority of traders and analysts in a quick poll.

Japan’s Nikkei 225 lost 0.74% in morning trading while the Topix index lost 0.5%.

Japanese automaker stocks continued to decline on Friday, with Toyota Motor falling 2.14% during the month
Nissan Motor lost 5.69% and Honda Motor lost 3.63%.

That came after Toyota announced Thursday that it would cut global production for September by 40% from its previous plan, Reuters reported. Toyota’s shares plunged more than 4% Thursday after the Nikkei first reported the company’s plan.

Elsewhere, the South Korean Kospi lost 0.84% ​​while the S & P / ASX 200 in Australia climbed 0.2%.

MSCI’s broadest index for Asia Pacific stocks outside of Japan was trading 0.73% lower.

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Overnight in the States, the S&P 500 was up 0.13% to 4,405.80 while the Nasdaq Composite was up 0.11% to 14,541.79. The Dow Jones Industrial Average lagged, shedding 66.57 points to 34,894.12.

Currencies

The US dollar index, which tracks the greenback versus a basket of its competitors, hit 93.521 after rising below 93 earlier this week.

The Japanese yen was trading at 109.76 per dollar, up against the greenback above 110 yesterday. The Australian dollar changed hands at $ 0.7141 after falling above $ 0.728 earlier in the week.

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Health

New Zealand central financial institution rate of interest choice after Covid lockdown

New Zealand central bank interest rate decision after Covid lockdown

Workers and shoppers eat on the steps of Freyberg Place in downtown Auckland, New Zealand on October 29, 2020, enjoying the freedom from Covid-19 Alert Level 1.

Lynn Grieveson | Newsroom | Getty Images

New Zealand was widely expected to be the first advanced economy to hike rates, but the central bank left rates unchanged on Wednesday after a Covid case prompted the country to announce a nationwide lockdown the day before.

The Reserve Bank of New Zealand said in a statement the decision to keep rates at 0.25% was made “in connection with the government’s imposition of level 4 COVID restrictions on activities across New Zealand”.

Prime Minister Jacinda Ardern imposed a nationwide lockdown on Tuesday when the first Covid case in six months was discovered in Auckland, the country’s largest city.

The city will be on lockdown for seven days starting Wednesday, while the rest of the nation will maintain a three-day lockdown. Level 4 restrictions are the highest in the country and the most restrictive where people must stay at home and can only leave for essential services.

‘Knife edge situation’

By Wednesday morning, the number of cases discovered had risen to seven and was confirmed as a highly transferable Delta variant, according to Reuters.

Paul Bloxham, chief economist for Australia and New Zealand at HSBC, called it an “exceptional 24 hours” and a “very sharp situation”.

“This morning … we find out that it is Delta (variant), and at that point 24 hours ago the market thought the RBNZ would deliver not just 20 but 25 (basis points),” he told CNBC’s Street Signs Asia “.

Ahead of the interest rate decision on Wednesday, Michael Gordon, acting chief economist for New Zealand at the Australian bank Westpac, said he did not expect a rate hike.

“The key here is that the government cannot trust the extent of the (Covid) problem,” he said in a note Tuesday after Ardern’s lock decision.

Analysts mostly expected a rate hike from the central bank, at least until the lockdown was announced. The majority of the 32 economists polled by Reuters expected the central bank to raise the official currency rate by 25 basis points from a record low to 0.50%.

Most central banks around the world have cut interest rates to record lows to prop up their pandemic-hit economies. Governments around the world have incentivized their economies to support businesses.

But New Zealand is among the most successful in the world in keeping its Covid cases in check with tough lockdowns and closings of its borders.

Major central banks in the APAC region are in no hurry to raise key rates … with the exception of New Zealand and Korea.

Maxim Darmet

Fit ratings

Partly due to its zero Covid strategy, the number of Covid cases has so far been kept at around 2,500, including 26 deaths – one of the lowest in the world.

That has helped the economy recover as data shows that economic growth in the first quarter of this year was above expectations. It was mainly driven by strong retail spending, falling unemployment rates and rising house prices.

The combination of minimal Covid restrictions and generous incentives has resulted in a booming economy and rising inflation, leading analysts to expect higher interest rates.

New Zealand dollar is falling

The New Zealand dollar fell to 0.6944 against the US dollar on Wednesday.

The currency has fallen from over 0.70 to over 0.69 since the lockdown was announced on Tuesday.

Bloxham said the New Zealand dollar could rebound once the Covid situation is contained.

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“If (the lockdown) is enough to contain the virus, keep the numbers small and push them back to zero … then you could imagine in a few weeks … there would be some kind of benefit for the New Zealand dollar,” he told the other CNBC’s “Street Signs Asia”.

New Zealand is likely to continue hike rates

With the expected increase now derailed, analysts said it would now depend on the magnitude of the virus situation.

“Regardless of the economic case for higher interest rates, there is nothing to be gained by pushing the (official cash rate) higher now instead of waiting for more clarity about the Covid situation,” said Gordon of Westpac.

He said experience has shown that once restrictions are lifted, activity tends to rebound. “If that happens, the RBNZ will face many of the same problems as before: an economy faced with cost pressures and capacity constraints, with the risk of inflation becoming more stubborn,” he said, adding that the increases will continue will be needed.

Meanwhile, Maxime Darmet, Asia-Pacific economic director at Fitch Ratings, told CNBC that most of the major central banks in the region are unlikely to hike rates anytime soon.

“The major central banks in the APAC region are in no hurry to start raising rates … with the exception of New Zealand and Korea. Generally limited inflationary pressures and Covid-related economic setbacks put APAC central banks ready to keep policy easy, ”Darmet said in an email to CNBC on Tuesday before the New Zealand lockdown was announced.

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Health

Blood clots linked to AstraZeneca shot have 22% mortality charge: research

Blood clots linked to AstraZeneca shot have 22% mortality rate: study

A paramedic prepares doses of the AstraZeneca vaccine for patients at a walk-in COVID-19 clinic at a Buddhist temple in the Smithfield suburb of Sydney on Aug. 4, 2021.

Saeed Khan | AFP | Getty Images

A new study has provided further details on the “rare but devastating” blood clotting complications associated with the Oxford-AstraZeneca Covid-19 vaccine.

In a peer-reviewed article published Wednesday in the New England Journal of Medicine, Massachusetts Medical Society scientists analyzed the first 220 cases of the disease reported in the UK.

The Oxford-AstraZeneca vaccine – now one of the most widely used Covid vaccines in the world – was launched in the UK in January, making it the first country to give the vaccine.

A very small number of people who were vaccinated with the AstraZeneca vaccine have developed blood clots. Described by health officials as “extremely rare”, it is characterized by blood clots accompanied by low platelet counts.

The Massachusetts Medical Society study uses data identified from 294 patients who presented to UK hospitals between March 22nd and June 6th.

All of these patients had received their first dose of the Oxford-AstraZeneca shot and were hospitalized with symptoms between five and 48 days after their vaccination. The average time between vaccination and hospitalization was 14 days, the results showed.

The overall mortality rate for VITT in the study was 22%.

The researchers also found that 41% of patients who presented with VITT were not diagnosed with any underlying health problems. Of those reporting a past or current illness, the study found that no illnesses or medications that were “unexpected in the general population” were prevalent.

“Against the background of a successful vaccination program in the UK, VITT has emerged as a rare but devastating complication,” the study’s authors said in their report. “We found that it often affects young, otherwise healthy vaccine recipients and is associated with high mortality.”

“In our cohort, 85% of the patients were younger than 60 years, although the (Oxford / AstraZeneca) vaccination was predominant in older adults,” the scientists found.

As a precaution, Great Britain has been offering people under 40 an alternative to the Oxford AstraZeneca vaccine since May.

People diagnosed with VITT ranged from 18 to 79 years old, with the mean age being 48, the study showed.

As of July 28, inclusive, an estimated 24.8 million first doses of the Oxford-AstraZeneca Covid vaccine had been administered in the UK, with an estimated 23.6 million second doses received.

On July 28, government figures show that for every million first or unknown doses of the Oxford AstraZeneca shot, 14.9 people developed a rare blood clot with low platelet counts. After a second dose of the vaccine, the number dropped to 1.8 cases per million.

The overall death rate for that period was 18%, the government data showed, with 73 deaths. Six of these occurred after the second dose.

Late last month, AstraZeneca published a study that found the VITT rate was 8.1 per million after the first dose of its vaccine, which dropped to 2.3 per million after a second dose.

According to official information, 411 suspected cases of VITT had been reported in Great Britain by July 28.

Benefits vs. Risks

In a statement Thursday, AstraZeneca said the research published in the New England Journal of Medicine was drawn from “a small sample size.”

“Recent practical evidence from millions of people shows that AstraZeneca’s vaccine has a similar safety profile to other vaccines and that thrombosis with thrombocytopenia is extremely rare and treatable,” said a spokesman.

The spokesman added that the infection with Covid-19 “poses a far greater risk” for rare blood clotting events.

“Vaccines remain the most effective protection against Covid-19 and the best way out of this pandemic,” they said.

Both the UK and EU drug regulators have identified possible links between the Oxford AstraZeneca vaccine and rare blood clots.

In April, the company announced it would comply with government requests in the UK and Europe to update its Covid vaccine labels. However, it stressed that the WHO had said “a causal relationship is considered plausible but not confirmed”.

The UK Joint Vaccination and Immunization Committee has stated time and time again that for the vast majority of people, the benefits of the Oxford-AstraZeneca vaccine continue to outweigh the risks.

Several health authorities, including the WHO, the European Medicines Agency and the International Society on Thrombosis and Hemostasis, agree that the benefits of giving the vaccine outweigh the risks.

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Health

Singapore to chill out Covid restrictions as vaccination charge will increase

Singapore to relax Covid restrictions as vaccination rate increases

A poster will be on display at the National Gallery of Singapore on March 30, 2020, reminding people to keep a safe distance from each other.

Ore extraction | Getty Images News | Getty Images

SINGAPORE – The Singapore government said Friday it will start easing Covid-19 measures next week as the proportion of people vaccinated increases.

The government has revised the Covid measures several times since May due to an increase in locally transmitted infections – many are caused by the more highly transmissible Delta variant. The country last tightened measures on July 22, banning eating and restricting social gatherings.

Singapore Health Minister Ong Ye Kung said the number of daily cases has stabilized since the recent restrictions were imposed. During that time, the proportion of people who received two doses of Covid vaccine rose from around 40% to 67% on Thursday.

“We have prevented an uncontrollable increase in infections, serious illnesses and deaths,” Ong, the co-chair of the country’s Covid task force, told reporters at a briefing.

Singapore has one of the fastest vaccinations in the world. Ong said the percentage of people fully vaccinated would rise to around 70% by Monday, when the country celebrates National Day.

However, with a “significant” portion of the population still not fully vaccinated, the government will introduce differentiated social rules based on people’s vaccination status, said Gan Kim Yong, Ministry of Commerce and Industry and co-chair of the coronavirus task force.

Differentiated Covid measures

From Tuesday next week, the group sizes of social gatherings will be relaxed from two to five people. But the government “strongly” encouraged those who were not vaccinated to stick to pairs.

Eating and drinking in catering facilities is allowed for groups of up to five people if they are all fully vaccinated or have had a negative Covid test in the last 24 hours. However, eating in open-air food centers and cafés is only allowed for groups of up to two people, regardless of their vaccination status.

The Singapore government also announced that it would ease its border restrictions.

Starting Tuesday, Singapore will allow fully vaccinated work card holders and their dependents to enter the country. And from August 20, fully vaccinated travelers from select countries – including Australia, Canada, Germany and South Korea – will be able to take a mandatory quarantine in their homes.

“We are now in a stronger position to continue our reopening journey, but in a cautious and calibrated way,” said Gan.

The government said it would ease measures further in early September, when 80% of the population is expected to be fully vaccinated.

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Health

Rule-breaking in bars in Holland a difficulty as Covid fee soars

Rule-breaking in bars in Holland an issue as Covid rate soars

Students cheer on a terrasse of a cafe in Amsterdam on June 25, 2021 when the Netherlands eased Covid-19 restrictions.

PAUL BERGEN | AFP | Getty Images

Rule-breaking in cafes and bars in the Netherlands is a persistent problem that the hospitality industry must deal with, the country’s prime minister said as the nation battles with a surge in Covid-19 infections.

Speaking Monday, Dutch Prime Minister Mark Rutte implored the industry to make customers adhere to the rules on social distancing and remain sitting down in their assigned seats, adding that this was critical given the high number of infections.

“With regard to the hospitality industry, we would like to point out that it is going well in many places, but in too many places it is not and it is extremely important,” Rutte said at a brief news conference Monday afternoon.

Rutte said the police cannot monitor tens of thousands of bars, cafes and restaurants in the Netherlands to make sure they are complying with the rules of social distancing and seating customers, “so we really have to do that together,” he said. “With the current infection figures, we don’t want to have to take extra measures,” he added.

Not enough social distancing

Rutte’s comments come as the Netherlands scrambles to contain a surge in Covid infections, mainly among younger people. Amid a fit of optimism over its vaccination program, the Dutch government announced in late June that most restrictions would be lifted, apart from the 1.5 meter social distancing rule, and that nightclubs would be allowed to reopen.

Cases soon began to soar, however, surging eightfold in just one week to around 10,000 cases on July 10, prompting the government to perform a U-turn and for Rutte to apologize for lifting restrictions too soon.

The government conceded that the “coronavirus infection rate in the Netherlands has increased much faster than expected since society reopened almost completely on 26 June.”

“Most infections have occurred in nightlife settings and parties with high numbers of people,” it said, as it forced nightclubs to close down again on July 10.

While bars, restaurants and cafes have been allowed to remain open and can operate at 100% capacity, there are strict rules in place.

People must be assigned seats and keep a 1.5 meter distance if sitting inside, unless hygiene screens are placed between tables. For outdoor service, social distancing is not necessary. Entertainment, including live performances and TV screens, is not permitted and loud music may not be played, government rules state. Venues must close at midnight.

Coen Berends, a spokesperson for the Netherlands’ National Institute for Public Health and the Environment, told CNBC on Tuesday that it was “impossible to calculate the effect of this ‘rule breaking'” in bars, cafes and restaurants.

“In general we model the effects of the applied rules and can also model the effect of the absence of rules. These models predict the effect of a whole package of measures, but can’t discriminate between different rules or the lack of compliance to a specific rule. In general our Management Outbreak Team advises the rules on social distancing and sitting in assigned seats in bars and restaurants to diminish spreading of the virus. So, disobeying these rules might definitely have an effect. Especially with the now dominant Delta variant of the virus,” he said.

“We do not, however, know the extent of this effect. It will certainly not have the massive effect that opening clubs and organizing large events had a couple of weeks ago. We see a stabilization of the numbers of positive tests now. So it seems the latest measures made by our government are successful. We will still have to see what the effect is on [the] number of hospitalizations,” Berends noted.

Infections running high

The Netherlands is certainly still in a difficult position when it comes to Covid infections, however, lying just below the U.K. in terms of its high infection rate in Europe but further behind when it comes to vaccinations. In the U.K., 68.5% of adults are fully vaccinated, in the Netherlands, it’s just above 50%, the latest available data shows.

On Monday, Jaap van Dissel, chair of the government’s Outbreak Management Team and director of the Centre for Infectious Disease Control, warned that in the past seven calendar days (measured from July 9-15), the number of reports of Covid-positive individuals has increased by 298%, compared with the previous seven days.

“Since the relaxation of the measures on June 26, there has been a strong increase of the number of infections among 18-29 year-olds,” van Dissel said in an open letter to the country’s director-general of public health. He said it was too early to tell what impact the tightening of measures would have.

On Monday, Health Minister Hugo de Jonge expressed the hope that cases were stabilizing and would begin to fall. Speaking alongside Rutte on Monday, de Jonge said that “over the past week … the number of positive test results has stabilized and that means that growth is not continuing. I think that’s positive.” 

“At the same time, we have to say: The number of positive test results at this level, of around 10,000 per day over the past week, is of course too high and that must of course be reduced.” 

He said the country must work hard to reduce the number of infections, echoing Rutte’s call for the 1.5 meter social distancing rule to be adhered to “in the hospitality industry, on the street and also at home when we receive guests. … We really need that 1.5 meter space for the time being to ensure that we will keep that epidemic under control.”

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World News

Asia-Pacific shares edge increased; Australia central financial institution’s fee choice forward

Asia-Pacific stocks edge higher; Australia central bank's rate decision ahead

SINGAPORE — Shares in major Asia-Pacific markets edged higher on Tuesday morning as investors look ahead to the Australian central bank’s interest rate decision.

The Nikkei 225 and Topix index in Japan both rose fractionally in morning trade. Over in South Korea, the Kospi gained 0.24%.

Meanwhile, stocks in Australia climbed as the S&P/ASX 200 advanced 0.22%.

MSCI’s broadest index of Asia-Pacific shares outside Japan traded 0.08% higher.

Looking ahead, the Reserve Bank of Australia is set to announce its interest rate decision at 12:30 p.m. HK/SIN on Tuesday.

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US crude futures jump

U.S. crude futures jumped in the morning of Asia trading hours on Tuesday, rising 1.57% to $76.34 per barrel. International benchmark Brent crude futures were fractionally higher at $77.19 per barrel.

Shares of Asia-Pacific firms in the oil space rose in Tuesday morning trade, with Australia’s Beach Energy rising 1.57% while Santos gained 1.44%. Shares of Inpex in Japan also jumped 1.19%.

Oil prices surged to multiyear highs on Monday after talks between OPEC and its oil-producing allies, known as OPEC+, were postponed indefinitely following a failure by the group to reach on agreement on production policy for August and beyond.

Currencies

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 92.241 — off levels above 92.4 seen late last week.

The Japanese yen traded at 110.86 per dollar after touching levels around 110.8 against the greenback yesterday. The Australian dollar changed hands at $0.7541, above levels below $0.752 seen yesterday.

Here’s a look at what’s on tap:

  • Australia: Reserve Bank of Australia’s interest rate decision at 12:30 p.m. HK/SIN

— CNBC’s Pippa Stevens contributed to this report.

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Health

Moody’s Analytics on Covid outbreaks in Asia, Fed fee hikes in 2023

Moody's Analytics on Covid outbreaks in Asia, Fed rate hikes in 2023

Asian countries need to tame the current waves of the coronavirus outbreak to prepare their economies for future rate hikes by the US Federal Reserve, an economist said Monday.

Fed officials said last week that rate hikes could happen as early as 2023, diverging from earlier comments in March that said the US Federal Reserve doesn’t expect a hike until at least 2024.

Higher US rates would attract overseas investors, and central banks in other countries may have to raise their own rates in defense. Raising interest rates could help countries prevent too much capital from leaving their economies, but increasing interest rates too quickly increases the risk of an economic slowdown.

“The Asian countries need to get Covid under control so that once the Federal Reserve starts raising interest rates, the economies here have an advantage and can make the transition,” said Steve Cochrane, chief economist for Asia-Pacific at Moody’s Analytics CNBC’s “Squawk Box Asia”.

Cochrane predicted that the US Federal Reserve could hike rates by 25 basis points once per quarter starting in 2023. The so-called dot plot of the expectations of individual Fed members indicated two rate hikes this year.

Asian countries need to get a grip on Covid so that as soon as the Federal Reserve raises interest rates, the economies have an advantage here and can also handle the transition.

Steve Cochrane

Chief Economist APAC, Moody’s Analytics

Many economies in Asia, including Japan, Taiwan and Malaysia, have seen a renewed spike in Covid cases in recent months – which has forced authorities to impose stricter social distancing measures. The new waves of infection come as vaccination progress in the region lags behind that in the US and Europe.

The World Bank said in a report this month that economic output in two-thirds of East Asian and Pacific countries will remain below pre-pandemic levels through 2022. Factors dampening potential economic growth in these countries include widespread Covid outbreaks and a collapse in global tourism, the bank said.

Cochrane noted that Covid outbreaks across the region are “stilling” domestic demand and keeping inflation moderate.

The economist said several Asian countries, including China, South Korea and Singapore, are stepping up Covid vaccinations. “It looks good, but it has to go on,” he said.

But other countries, including Thailand, Indonesia and the Philippines, have not effectively controlled the outbreak and do not yet have strong immunization programs, Cochrane added.

– CNBC’s Jeff Cox contributed to this report.

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Health

70 % Covid Vaccination Fee Might Be in Attain, New Ballot Suggests

70 Percent Covid Vaccination Rate May Be in Reach, New Poll Suggests

A new poll suggests the US may be on track to vaccinate at least 70 percent of the adult population against Covid-19 by the summer.

In the latest survey by the Kaiser Family Foundation, 62 percent of respondents said they had received at least one dose of vaccine, up from 56 percent in April. At the same time, around a third of those classified as “waiting” stated that they had already made vaccine appointments or that they would have planned to do so shortly.

Dr. William Schaffner, National Infectious Disease Foundation medical director and vaccine expert, found the results encouraging.

“I think there are many people on the fence worried about things moving too fast and possible side effects. However, those concerns will be allayed as more friends and acquaintances celebrate the vaccination,” said Dr. Schaffner, who did not participate in the monthly survey, the Covid-19 Vaccine Monitor.

“You get a growing sense of comfort and security that ‘people like me’ will be vaccinated,” which he said was essential in building confidence in the vaccines.

The two populations that saw the largest increases in vaccination rates from April to May were Latino adults (from 47 percent to 57 percent) and adults without a college degree (from 48 percent to 55 percent).

The telephone survey of 1,526 adults was conducted in English and Spanish from May 18-25.

On May 10, the Food and Drug Administration approved Pfizer and BioNTech’s vaccine for children 12 years and older. The survey found that 40 percent of parents said either their child has already received at least one dose or will soon receive one.

However, the parents of younger children were much more cautious. Only about a quarter expressed willingness to have their children vaccinated once the shots have been approved for them.

The results suggest that efforts to protect as many young students as possible from Covid-19 at the start of the school year may face obstacles.

While public health experts welcomed the continued improvement in vaccination rates, they found that the pool of most willing adults was shrinking.

“There is almost no low hanging fruit at this point, but there is a path to a slow but steady increase in vaccination rates through improved access, information, advocacy and incentives,” said Drew Altman, president and chief executive officer of Kaiser Family Foundation.

President Biden’s goal is to achieve 70 percent adult vaccine coverage by July 4th. Dr. Schaffner said he thought the goal was possible. “We have to work harder,” he said.

The survey authors said the target was realistic because in addition to 62 percent of adults who received at least one dose, another 4 percent said they wanted the shot as soon as possible and another 4 percent – a third of the ” “wait and see” group said they had made an appointment or intend to do so within three months.

Despite the positive news, vaccination rates in adults who previously reported significant hesitation (7 percent) or outright rejection (13 percent) have remained unchanged for several months. And a third of the “wait and see” group said they would wait at least a year before taking the picture.

The survey also looked at attitudes towards vaccination incentives and the impact of government news about the shots. Financial incentives, such as the million dollar lottery in Ohio for the newly vaccinated, are being pushed back a little.

However, the survey found that such rewards can be successful motivators for people to get the shots. Fifteen percent of non-vaccinated adults in the survey said their state’s offer of $ 100 may make them reconsider, as well as free transportation and tickets to a sporting event or concert.

Earlier this month, people vaccinated at an event at Talladega Superspeedway in Alabama were able to complete two winning laps on the track. (Cars and trucks, yes; motorcycles, no.) Similar incentives are being offered across the country.

About 20 percent of unvaccinated workers said they would be more likely to get the shots if their employer gave them paid time off for the dates and time needed to recover from side effects.

The report also showed that the public had some confidence in the government’s health-related messages, although many were confused by the Centers for Disease Control and Prevention’s announcement earlier this month that vaccinated people could largely avoid face masks and social distancing. Over half said the CDC’s guidelines were generally clear and accessible, but about 40 percent found them confusing and cloudy.

Notably, 85 percent of people who were not vaccinated said that the CDC’s new guidelines no longer made them ready to be vaccinated.

But another cohort viewed government approval as a potential launch vehicle. The survey found that a third of unvaccinated adults, including 44 percent in the “wait and see” group, said they would be more likely to receive a vaccine once it received full approval from the Food and Drug Administration. Vaccine makers Moderna and Pfizer-BioNTech recently announced that they are making progress towards this goal.

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Politics

Jamie Dimon is skeptical of Biden’s minimal international company tax price

Jamie Dimon is skeptical of Biden's minimum global corporate tax rate

JPMorgan Chase Chairman and CEO Jamie Dimon testifies during a US House Financial Services Committee hearing on Capitol Hill in Washington, DC, June 19, 2012, about JPMorgan Chase’s trading loss.

Saul Loeb | AFP | Getty Images

JPMorgan Chase CEO Jamie Dimon and Citigroup chief Jane Fraser on Thursday expressed concerns over President Joe Biden’s effort to hike the amount of taxes businesses pay on foreign profits and a concurrent goal to set a global minimum corporate tax rate.

Testifying before the House Financial Services Committee, Dimon argued that a plan to raise the U.S. tax rate on foreign profits to 21% could, over time, push firms to move business overseas. Dimon thinks that shift could accelerate if allies renege on their promises to impose a similar global minimum tax rate.

“America would be the only country, I think, in the world that would have what we call a global tax rate,” he said, referring to the proposed 21% rate on U.S. companies’ foreign income.

“There’s no question in my mind that, at the margin … that will drive capital and, eventually, brains and R&D and investment overseas,” he said. “And that would be a mistake for America.”

Fraser, Citigroup’s new CEO, concurred, adding that “it’s very hard to get other countries to sign on to an equivalent program despite some optimism.”

“I think that will be extremely difficult,” she continued. “And, therefore, it could put the U.S. in a position of being less competitive around the world.”

The commentary from two of the nation’s top bankers came as the Biden administration continued to seek international support for a global minimum corporate tax rate of 15%.

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The Treasury Department, which has taken the lead in trying to persuade Germany, France and others to back the plan, contends that a universal floor on corporate tax rates would allow governments to more effectively generate tax revenue.

Neither the White House nor the Treasury Department wished to comment on the record.

The current system, according to Treasury Secretary Janet Yellen, incentives countries to offer lower effective corporate rates over time in a “race to the bottom” to lure corporations across geographies.

But Dimon and others have expressed doubts over any chance of long-term success in persuading U.S. peers to adhere to a global minimum at 15% or any other level, especially when it may be more lucrative for governments to cheat the system by offering backdoor incentives or flouting the agreement entirely.

A JPMorgan spokesperson explained that the concern is that the U.S. would adopt a relatively high tax on foreign income, at 21%, only for foreign partners to shirk their own tax promises. That scenario could put the U.S. at a competitive disadvantage and encourage the offshoring of factories, profits and workers.

The Treasury Department has reiterated that the 15% proposal should be thought of as a sort-of floor and that subsequent talks could eventually push it higher. That, in theory, could work to reduce a tax disadvantage.

That the White House is keen to coax others into a global minimum tax isn’t necessarily a surprise given the amount of spending it wants to see to achieve its agenda priorities.

Its American Jobs Plan, an infrastructure-focused proposal, would funnel $2.3 trillion over a decade into traditional infrastructure as well as toward scientific innovation, pay for home health aides and the construction of 500,000 electric-vehicle charging stations.

The GOP countered with its own version Thursday, a more modest $928 billion proposal with a greater emphasis on “hard” infrastructure like roads, bridges and public transit.

The White House also hopes to enact the American Families Plan, a $1.8 trillion piece of legislation aimed at funding for social programs like paid family leave, free early childhood education and free community college. 

Biden’s economic team says its Made In America tax plan would help cover the costs of both bills. Broadly, that tax plan seeks fortify the IRS and crack down on tax evasion, raise the amount the wealthiest households pay on capital gains, and hike the rate U.S. businesses pay on domestic profits to 28%.

President Donald Trump’s 2017 tax cuts reduced the U.S. corporate tax rate to 21% from 35%. 

The bank CEOs appeared on Wednesday before the U.S. Senate Committee on Banking, Housing and Urban Affairs.

One testy exchange from that hearing came between Sen. Elizabeth Warren, D-Mass., and Dimon. Warren accused JPMorgan Chase, and the other consumer banks, of not doing enough to communicate to its customers about relaxation of certain overdraft fee rules during the coronavirus outbreak.

Dimon countered that the bank had accommodated customers who had made qualifying overdraft fee waiver requests and that the bank would not be refunding billions it collected in such fees in 2020.

Categories
Health

Single dose cuts an infection charge by 65%, examine finds

Single dose cuts infection rate by 65%, study finds

James Shaw, 82, receives Oxford University / AstraZeneca COVID-19 vaccine from advanced nurse Justine Williams on January 4, 2021 at Lochee Health Center in Dundee, Scotland, UK.

Andy Buchanan | Reuters

LONDON – A single dose of the Covid-19 vaccine from Oxford-AstraZeneca or Pfizer-BioNTech drastically reduces the risk of infection in adults of all ages, British researchers have found.

Two studies published on Friday analyzed more than 1.6 million nasal and throat swabs from 373,402 people between December and April. The data was collected as part of the ongoing Covid-19 infection survey carried out by Oxford University, the UK Office for National Statistics and the UK Department of Health and Welfare.

The researchers found that 21 days after a single dose of the Oxford-AstraZeneca or Pfizer-BioNTech vaccine, new Covid infections – both symptomatic and asymptomatic – had decreased by 65%.

Symptomatic infections decreased by 74% three weeks after a single dose of either vaccine, while asymptomatic cases decreased by 57%, the data showed.

A second dose of vaccine reduced the overall infection rate by 70%, reducing symptomatic Covid infections by 90% and asymptomatic cases of the virus by 49%.

The researchers compared these effects to the natural immunity obtained from infection with the virus.

However, they warned that the fact that vaccinated people could still be infected – even if those infections were mostly asymptomatic – meant “transmission possible”.

The study found that vaccines had a similar effect in reducing infection rates in adults of all ages. Their ability to reduce infection was also similar, regardless of whether the participants had long-term health conditions or not.

What about antibody resistance?

The scientists also looked at the effects of Covid vaccinations on participants’ antibody levels.

They found that older adults – especially those over 60 – who had never been infected with Covid had a lower immune response to a single dose of vaccine than those who had previously been infected with the virus.

Antibody responses to two doses of the Pfizer BioNTech vaccine were high in all age groups. The data showed that older adults were able to achieve antibody levels similar to those who received a vaccine dose after a previous Covid infection.

Too few people in the UK had received two doses of the Oxford AstraZeneca vaccine for researchers to assess the effects on antibody response. However, it was found that immune responses to a first dose differed between the Oxford AstraZeneca vaccine and the Pfizer BioNTech vaccine.

Antibody levels rose more slowly after a single dose of the Oxford-AstraZeneca vaccine than after the Pfizer-BioNTech alternative. However, after a dose of the latter, antibody levels fell more rapidly, especially in older adults, so patients achieved antibody levels similar to those seen after an initial dose of the Oxford-AstraZeneca vaccine.

Although immune responses differed between age groups, the scientists emphasized that there was no group that did not respond to either vaccine. However, a small number of people – less than 5% – had poor immune responses to both vaccines.

Important to get the second dose

The Oxford-AstraZeneca vaccine has been approved for use in the UK, India and several other countries, but has been temporarily suspended in some markets amid concerns that it could be linked to rare blood clots. Global health officials have stated that the benefits of giving the vaccine continue to outweigh the risks.

The WHO recommends an interval of eight to 12 weeks between the first and second dose of the Oxford AstraZeneca vaccine.

The Pfizer BioNTech vaccine is also given in several countries, including the United States. The U.S. Centers for Disease Control and Prevention recommends receiving a second dose of the vaccine three weeks after the first.

In February, the UK started a study to see if mixing doses of the Oxford-AstraZeneca and Pfizer-BioNTech vaccines could be effective.

Sarah Walker, professor of medical statistics and epidemiology at Oxford University and chief investigator and academic director of the Covid-19 infection survey, said Friday that scientists are still not sure how strong and how long an antibody response is. was needed for long-term protection against Covid.

David Eyre, associate professor at Oxford University’s Big Data Institute, added that the results released on Friday highlighted the importance of a second dose of vaccine for increased protection.