Government strategy: Jobs report firms Biden resolve to focus on household aid …

Currency pairsExchange Rate as of 4 February 2021The eventPost Event-Exchange Rate as of 5 February 2021 
AUD/USD0.7616US adds 49,000 jobs. Biden believes years before US sees full employment0.7616 
USD/CAD1.2782US adds 49,000 jobs. Biden believes years before US sees full employment1.2809 
USD/CNY6.4585US adds 49,000 jobs. Biden believes years before US sees full employment6.4639 
EUR/USD1.2030US adds 49,000 jobs. Biden believes years before US sees full employment1.9920 
USD/INR72.8942US adds 49,000 jobs. Biden believes years before US sees full employment72.8955 
GBP/USD1.3651US adds 49,000 jobs. Biden believes years before US sees full employment1.3637 
USD/JPY105.0200US adds 49,000 jobs. Biden believes years before US sees full employment105.3000 
USD/MXN20.1501US adds 49,000 jobs. Biden believes years before US sees full employment20.3041 
USD/DKK6.1815US adds 49,000 jobs. Biden believes years before US sees full employment6.2005 
USD/NOK8.5960US adds 49,000 jobs. Biden believes years before US sees full employment8.6190 
Source: OANDA

In the news

From the White House’s Council of Economic Advisors. This morning’s jobs report reveals that the pace of job gains has slowed sharply in recent months as the pandemic continues to weigh on job creation, especially in face-to-face services. Strong relief is urgently and quickly needed to control the virus, get vaccine shots in arms, and finally launch a robust, equitable and racially inclusive recovery. The Employment Situation in January | The White House

House Democrats on Friday voted to adopt a final budget measure, setting off an approximately two-week sprint to draft a coronavirus relief bill that would mark President Joe Biden’s first legislative win. House clears way for massive coronavirus stimulus plan (msn.com)

The Commerce Department’s National Telecommunications and Information Administration (NTIA) is committed to increasing broadband Internet access across America, particularly in unserved and underserved communities. The recently enacted Consolidated Appropriations Act of 2021 provides new sources of tribal broadband funding to assist in mitigating the effects of the COVID-19 pandemic which is exacerbating the digital divide across Indian Country.  NTIA Announces Tribal Consultations on New Program to Increase Broadband Access Across Indian Country | U.S. Department of Commerce

The Takeaway

The White House will not be placing emphasis on infrastructure deployment via its “American Rescue Plan.” The White House appears focused on short term aid to households via an additional $1400 in aid payments and on the gender issue, particularly the reported disproportionate impact pandemic-induced unemployment has had on women in the workforce. Not to say that infrastructure is off the agenda. Mr Biden through the U.S. Department of Commerce, has announced the administration’s intent to incentivize the deployment of broadband infrastructure on Native American lands via grants from the U.S. Department of Commerce.

Mr Biden’s approach to infrastructure, at this juncture, seems more like patchwork versus coordinated, targeted, and streamlined. Covid relief itself, through the American Rescue Plan, looks like it will be delayed with final work on legislation not expected until March 14th.

Currency markets should not view the funding as a currency mover especially with no definitive information on the impact the funding will have on interest rates or yields, factors that make the US more attractive for investment thus greater demand for US currency.

Interbank market news scan: Biden ready to pull reconciliation trigger; central banks, cryptocurrency, foreign exchange

The strategy takeaway …

The White House yesterday released the following statement on President Joe Biden’s meeting with GOP senators:

“The President and the Vice President had a substantive and productive discussion with Republican senators this evening at the White House. The group shared a desire to get help to the American people, who are suffering through the worst health and economic crisis in a generation. 

While there were areas of agreement, the President also reiterated his view that Congress must respond boldly and urgently, and noted many areas which the Republican senators’ proposal does not address. He reiterated that while he is hopeful that the Rescue Plan can pass with bipartisan support, a reconciliation package is a path to achieve that end. The President also made clear that the American Rescue Plan was carefully designed to meet the stakes of this moment, and any changes in it cannot leave the nation short of its pressing needs. 

The President expressed his hope that the group could continue to discuss ways to strengthen the American Rescue Plan as it moves forward, and find areas of common ground  including work on small business support and nutrition programs. He reiterated, however, that he will not slow down work on this urgent crisis response, and will not settle for a package that fails to meet the moment.”

The key word here is reconciliation. In this statement, Mr Biden is signaling that the GOP’s offer does not come close enough to his vision on spending. Reports have the Republicans promoting a pandemic relief package of approximately $618 billion while Mr Biden wants a package of $1.9 trillion. Given Democratic Party control of both chambers of Congress, Mr Biden may believe that fast tracking his measure through Congress is his best option. He can argue that he kept his promise to pursue a bi-partisan approach with the Republicans while keeping his campaign pledge to push a $1.9 trillion plan.

Reconciliation allows Democratic House leadership to issue instructions to its committees to make changes in existing law to support the proposed program costs. The House Budget Committee bundles together the committees’ recommended changes in spending and revenues and submits the bundled recommendations to the House floor for vote. When the reconciliation bill is sent to the Senate, the bill goes through an expedited process. Filibuster is not allowed and a simple majority would be all that is needed to pass in the Senate.

Traders should position themselves for a stronger dollar accompanied by higher yields and an uptick in inflation due to additional spending by consumers. The duration of dollar strengthening, in my opinion, will be determined by the type of spending generated by the bill. As I concluded yesterday, Mr Biden’s America Rescue Plan does not appear to provide funding for infrastructure projects and seems more of a band-aid for households. With the bulk of monies expected to go to households, I expect spending on consumer items, rent, and mortgages.

Currency pairsExchange Rate as of 4:45 pm EST 1 February 2021The eventPost Event-Exchange Rate as of 1:49 am EST 2 February 2021
AUD/USD0.7641Joe Biden meets with GOP senators0.7626
USD/CAD1.2776Joe Biden meets with GOP senators1.2824
USD/CNY6.4267Joe Biden meets with GOP senators6.4605
EUR/USD1.2135Joe Biden meets with GOP senators1.2066
USD/INR72.8760Joe Biden meets with GOP senators72.9740
GBP/USD1.3699Joe Biden meets with GOP senators1.3676
USD/JPY104.6400Joe Biden meets with GOP senators105.0200
USD/MXN20.5641Joe Biden meets with GOP senators20.2827
USD/DKK6.1262Joe Biden meets with GOP senators6.1539
USD/NOK8.5474Joe Biden meets with GOP senators8.5639
Sources: Federal Reserve, Reuters

In the news …

Australia’s central bank held rates at near-zero in a widely expected decision on Tuesday and said it would expand its bond buying programme by A$100 billion ($76.4 billion)from mid-April to help support jobs and boost inflation. Australia central bank expands QE by $76 bln, commits to prolonged easy rates (msn.com)

China’s central bank on Tuesday conducted 80 billion yuan ($12.36 billion) of reverse repos to maintain reasonably ample liquidity in the banking system. China’s central bank conducts 80b yuan of reverse repos – Chinadaily.com.cn

The news of NVIDIA Corporation (NASDAQ: NVDA) potentially restarting production of graphics processing units (GPUs) production is very good news for all those hoping for bitcoin mining GPUs. Cryptocurrency Miners Are Eagerly Awaiting News From Nvidia – MarketWatch

As of 5:51 pm AST, foreign exchange rates as Congress ponders additional relief …

Pairs Federal Reserve as of 23 December 2020 OANDA as of 23 December 2020 OANDA as of 28 December 2020 
GBP/USD 1.3510 1.3449 1.35603 
USD/CAD 1.2841 1.2872 1.28619 
USD/CNH 6.5400 6.5323 6.51546 
USD/DKK 6.0989 6.1031 6.10186 
EUR/USD 1.2194 1.2185 1.21836 
USD/INR 73.7700 73.7316 73.4122 
USD/MXN 20.0800 20.0878 19.8603 
USD/JPY 103.5200 103.50 103.63 
USD/NOK 8.6307 8.6886 8.62746 
USD/SEK 8.2841 8.3036 8.24517 
USD/CHF .8882 .8886 .89037 

Source: Board of Governors of the Federal Reserve, OANDA

Legal/Political Events Impacting Foreign Exchange Rates

U.S. House considers increasing dollar amount of pandemic relief payments to taxpayers

The U.S. House of Representatives is, at the time of this writing, considering a vote to increase the amount of pandemic relief to individual taxpayers from the current $600 to $2,000. President Trump and House Democrats are aligned on this issue, but the increase is expected to face considerable push back in the Republican controlled U.S. Senate. Mr Trump argued yesterday that the pandemic relief passed by Congress over the weekend contained unnecessary spending and argued that these funds be reallocated to American taxpayers.

Source: U.S. House of Representatives

Foreign exchange rates; Pandemic stimulus bill passes Congress

Pairs Federal Reserve as of 18 December 2020 OANDA as of 21 December 2020 
GBP/USD 1.3497 1.33499 
USD/CAD 1.2776 1.28559 
USD/CNH 6.5395 6.53668 
USD/DKK 6.0798 6.09401 
EUR/USD 1.2236 1.22056 
USD/INR 73.5300 73.7333 
USD/MXN 19.9813 20.1582 
USD/JPY 103.3500 103.4600 
USD/NOK 8.5959 8.6862 
USD/SEK 8.2786 8.2959 
USD/CHF .8850 .8865 
Sources: Federal Reserve and OANDA

Legal/Political news impacting foreign exchange

Congress passes $900 billion relief package

Reuters reporting that the United States Senate has passed a $900 billion coronavirus relief package which includes a one-time $600 payment to eligible American taxpayers. President Donald Trump is expected to sign the legislation later today.

Federal Reserve finds perception of quality of life worsening for lower, middle income…

The Federal Reserve Bank of Atlanta released a summary of a Federal reserve survey assessing the lower and middle income communities’ perception of quality of life during the pandemic. The summary has been reproduced below.

Source: Federal Reserve Bank of Atlanta

For immediate release: November 9, 2020

A national Federal Reserve survey of organizations serving low- and moderate-income (LMI) communities shows that eight months into the pandemic, many aspects of life—from employment to education to public health—are deteriorating.

Perspectives from Main Street: The Impact of COVID-19 on Low- to Moderate-Income Communities and the Entities Serving Them” is the latest survey of government agencies, nonprofits, financial institutions, and other organizations. It was conducted in October and included 1,127 respondents who work on a range of issues within their LMI communities. Respondents represented a mix of U.S. urban, suburban, and rural areas across all 50 states as well as U.S. territories.

Key findings:

  • 55 percent of organizations said income lossjob loss, or unemployment impacts from COVID-19 got modestly or significantly worse in their LMI communities since August; 24 percent said these got modestly or significantly better.
  • 44 percent said impacts on basic consumer needs (changes in needs for housing, food, and other personal needs) worsened since August; 22 percent said things got better.
  • 51 percent indicated that disruptions to business (for example, short- or long-term closures, supply chain disruptions, or reduced demand) worsened since August; 26 percent said these got better.
  • 58 percent reported that impacts on education worsened since August, such as through disruptions to childcare, K-12, and higher education; only 19 percent said things got better.
  • 45 percent said pandemic-related impacts on health worsened; 19 percent said these got better. This includes changes in access to adequate health care and insurance or impacts on mental and physical health.

When asked how COVID-19 has affected their organization or agency, about two thirds said demand for their services has increased as a result of the pandemic. Meanwhile, more than a third noted a corresponding decrease in their ability to provide services in LMI communities. This was similar to findings from the same survey administered in August.

The full survey results from October, as well as previous surveys from August, June, and April, are available at frbatlanta.org/covidsurvey-communities.

The Federal Reserve seeks to promote the economic resilience and mobility of individuals and communities across the United States, including LMI and underserved households. Increasing economic opportunity is not only good for individuals and communities but also is vital to the overall economy. Amid the pandemic, the Fed is deepening its existing outreach to gather useful information as conditions evolve.

Contact: Karen Mracek | 470-249-8348

Federal Reserve reduces minimum loan size for credit facilities designed to help small businesses during pandemic …

Source: Federal Reserve

“The Federal Reserve Board on Friday adjusted the terms of the Main Street Lending Program in two important ways to better target support to smaller businesses that employ millions of workers and are facing continued revenue shortfalls due to the pandemic. In particular, the minimum loan size for three Main Street facilities available to for-profit and non-profit borrowers has been reduced from $250,000 to $100,000 and the fees have been adjusted to encourage the provision of these smaller loans. The Board and Department of the Treasury also issued a new frequently asked question clarifying that Paycheck Protection Program loans of up to $2 million may be excluded for purposes of determining the maximum loan size under the Main Street Lending Program, if certain requirements are met, which should also help smaller businesses access Main Street loans.

The Main Street Lending Program supports lending to small and medium-sized for-profit businesses and nonprofit organizations that were in sound financial condition before the COVID-19 pandemic but lack access to credit on reasonable terms. To allow borrowers time to recover from the pandemic, the program offers several five-year loan options, with deferred principal and interest payments for qualified businesses and nonprofits. Loan documents reflecting the new terms are expected to be available to registered lenders within the next week.

To date, the Main Street program has made almost 400 loans totaling $3.7 billion, providing support to businesses from a wide range of industries. The program was established with the approval of the Treasury Secretary and with $75 billion in equity provided by the Treasury Department from the CARES Act.” — Board of Governors of the Federal Reserve System

For media inquiries, call 202-452-2955.

Covid-19 and the need for talent driving executive decisions on work location …

NEW YORK, Oct. 13, 2020 /PRNewswire/ — A new survey of U.S. business executives concludes corporate decision makers find large urban areas less attractive business locations due to the COVID-19 pandemic. Released today at the International Economic Development Council (IEDC) Annual Conference, which is being held virtually from Dallas, the study shows that nearly 50% of the executives surveyed reported that large urban areas – cities with a population of more than 1 million – are less attractive as business locations due to COVID-19. Respondents also reported that their perception of some state’s business climates has deteriorated due to the way some states have handled the pandemic.

Conducted by Development Counsellors International (DCI) every three years, the “Winning Strategies in Economic Development Marketing” survey has tracked trends in economic development since its inception in 1996. In light of COVID-19, this year’s survey also includes findings about how the pandemic affects corporate location decisions and perceptions of U.S. cities and states.

“Now in its ninth iteration, the Winning Strategies survey reveals the changing perceptions of location decision makers, as well as the tools and tactics that help shape those perceptions,” said Julie Curtin, president of DCI’s economic development practice. “The confluence of a global pandemic, a presidential election and intense scrutiny of equity policies is putting a renewed interest on how location decisions are made, so the results from this year’s survey are especially interesting for communities and site selectors alike.”

Key findings from the 2020 survey, which is based on the aggregate responses of 316 corporate executives with site selection responsibilities, include:

  • States with the Best Business Climates: Texas ranks No. 1 with 48% of respondents citing the state as having a favorable business climate, followed by Georgia at No. 2 with 25%, North Carolina at No. 3 with 22%, Florida at No. 4 with 18% and Tennessee at No. 5 with 13%.
  • States with the Worst Business Climates: California has held the distinction of being the least-favorable state for the past seven editions of the survey, with the percentage rising from 57% in 2017 to 63% this year. New York, Illinois and New Jersey have also been ranked in the top five for the last three editions of the report.
  • Corporate executives are closely watching the presidential election and expecting to pivot if needed. A majority of respondents (55%) reported that should President Trump be re-elected, they—or their clients—will be more likely to explore locations in the United States.
  • Talent continues to rule the decision-making process. Even as the country has seen unemployment rates skyrocket since the start of the pandemic, skills gaps continue to exist and access to skilled talent remains the top location factor in site selection searches.
  • Even amidst the pandemic, companies are moving forward with location decisions. 55% of respondents reported that their company will make a location decision (such as move, expand or consolidate) during the next 24 months—5 percentage points up from 2017.

Best States for Business:

  1. Texas                                 48%
  2. Georgia                              25%
  3. North Carolina                    22%
  4. Florida                                18%
  5. Tennessee                         13%

Worst States for Business:

  1. California                           63%
  2. New York                           33%
  3. Illinois                                 32%
  4. New Jersey                        14%
  5. Florida                                12%

For a free copy of the full “Winning Strategies” survey report or an executive summary, visit aboutdci.com/thought-leadership/winning-strategies.

About DCI
Development Counsellors International (DCI) is the leader in travel and economic development marketing — increasing visitors and business inquiries for places across the globe. Since 1960, DCI has worked with more than 500 cities, regions, states and countries, helping them attract both investors and visitors. DCI has offices in New York, Denver, Toronto and Los Angeles. For more information, visit aboutdci.com or follow @aboutDCI on Twitter.

SOURCE Development Counsellors International

Related Links

The COVID/AI Era of Law …

For five months now, the United States has been in lock-up.  One of the ugliest hashtags I have seen and heard used is #AloneTogether.  At first it reads like an oxymoron.  If we are alone, how can we be together.  It sounds like the status of the last few years of my first marriage.  Sharing space with an energy pulling against you is draining.

The COVID-19 pandemic may be casting a new meaning on that phrase.  If you have the misfortune of having to share more time in energy draining space with a spouse that you are considering divorcing, #AloneTogether may be the last rallying cry before calling a divorce attorney.

Technology may also impact how we view the phrase.  Zoom calls and TEAMS meetings are a growing part of the workplace lexicon.  The spaces that we enjoyed being alone in at home have become offices and digital conference rooms where everything from sales pitches to digital happy hours are taking place.

For the extra sensitive, walking down a sidewalk and observing people take the extra precaution of taking a wider berth around you while hindering their own breathing by wearing a mask can be disconcerting.  The slightest attempts at saying “hello” or “good morning” are increasingly avoided because of fear that the slightest exhale from a fellow human may lead to a 14-day quarantine or time in a hospital on a ventilator.

In theory, the state quasi-mandated environment of staying away from each other should result in a reduction in analog contacts as our world goes increasingly digital.  Hard for kids to get into school fights when kids are at home distance learning.  Tough to get in a shouting match with a restaurant cashier over an order when Uber Eats, Grub Hub, or Door Dash is picking up your food.

There will be controversies; they will continue.  We are humans, taking conflict to levels that exceed what other lifeforms endure.  Legal philosophy should have us asking “Why are we engaging?” or “What is engagement?”.  Society will have to come up with tweaks to the rules for human engagement in a digital age where a corona virus is forcing on a global scale the reconstruction of society.  Should judges have to consider new threshold principles before trying to apply statutes, laws, rules, code, from a pre-COVID, non-artificial intelligence world to an issue before them arising out of a digital environment?  Will we need a new definition for personal spaces? For zones of danger?

In the area of political law how we structure political engagement and eventually the rules for engagement are already taking on a new twist.  For example, the recent squabble in the United States over funding for the U.S. Postal Service appears to be a result of the controversy over the use of mail-in ballots and the possibility of mail fraud.  As I ponder these questions, I suspect that new legal principles will appear as COVID-19 continues to change how we address the question of whose rule should prevail during political conflict.

Rather than clearly promoting telehealth, Trump’s messaging yesterday was aimed at elderly voter fear.

President Donald Trump yesterday held a press briefing on the status of the United States’ efforts to control spread of COVID-19.  What gave me pause was the President’s cloudy description of advanced communications and the lost opportunity to promote broadband.  The President said this about technology and connecting people:

“Nursing homes in higher-risk areas will be receiving more funding.  This money can be used to address critical needs, including the hiring of additional staff, increasing testing, and providing technology support so residents can connect their families and they can connect to their families.  They are having a tremendous time.  They want to be with their loved ones.  They can’t do it, so what we’re doing is we’re working it so that we can connect — have them connect with their families if they’re not able to visit.”

According to the President, $5 billion would be allocated to nursing homes from the Department of Heath and Human Services provider relief fund.  Mr Trump’s statement implied that some of this funding would go toward connecting nursing home patients and their families.  But a review of HHS allocation targets did not identify any amounts going toward nursing homes for additional communications facilities.  The Administration’s signaling of this intent does not appear to be included in the actual allocation program.

Mr Trump may have had an eye on applying political messaging to secure votes from the elder population in general and the nursing home population in particular given controversy around a directive by Governor Andrew Cuomo, Democrat of New York, to not prohibit the placement of patients in nursing homes based solely on the possibility of having COVID-19.  Critics of the Governor’s actions have been quick to point out the risk to elderly non-infected nursing home residents.  Hours after Mr Trump’s remarks on the elderly and COVID-19, Senator Rand Paul, Republican of Kentucky, referred to Governor Cuomo’s decision to locate infected patients in nursing homes as a “disastrous decision” that amounted to an impeachable offense.

That an opportunity for promoting public policy, in this case broadband for telehealth, may have been lost due to prioritizing political messaging is unfortunate.  The loss could have been mitigated by using specific terminology and definitions in one or two sentences rather than using a broad term such as technology. It is another lesson to readers of and listeners to political messaging to remain aware of as much of the existing political environment when assessing the value of political statements.

 

How is thermal imaging being used to detect COVID-19?

Dubai Police have recently began equipping their officers with innovative smart helmets fitted with thermal imaging cameras designed to detect people running a high fever – a common symptom of COVID-19. The helmet can identify a high temperature from the safe distance of five meters and will send an automatic alert to the wearer if a fever is detected.

Some businesses in the U.S. are using similar thermal imaging technology to detect if customers or employees at their business have the COVID-19 symptom, which could help reopen the economy faster. Companies like Thermal Guardians have begun manufacturing these thermal imaging tools for use in public spaces such as airports, hospitals, residential communities, and businesses.

Watch this video from the Khaleej Times of the Dubai Police using the smart helmets: