Morning Macrodesiacs

 European Opening Calls:#FTSE 6093 +0.28%#DAX 12902 +0.16%#CAC 4943 +0.09%#AEX 560 +0.02%#MIB 19852 +0.03%#IBEX 7055 +0.16%#OMX 1766 +0.36%#STOXX 3294 +0.14%#IGOpeningCall— IGSquawk (@IGSquawk) August 19, 2020 

Total exports fell 19.2% in July from a year earlier, roughly in line with market expectations for a 21.0% decrease, government data showed on Wednesday.

It was, however, smaller than a 26.2% drop in June, which some analysts saw as a sign external demand may have bottomed out.

“Today’s trade data confirmed that external demand hit bottom and is heading toward gradual recovery,” said Masaki Kuwahara, senior economist at Nomura Securities.

Shipments to the United States plunged 19.5% in the year to July as demand for engines and automobile remained weak, a sign Japan was feeling the pinch from the slow U.S. recovery from the pandemic’s pain.

In a glimmer of hope, exports to China - Japan’s largest trading partner - rose 8.2% to mark the first increase in seven months on brisk demand for chip-manufacturing equipment and cars.

But those to the rest of Asia were down 8.2%, the data showed, reinforcing expectations that a full-fledged recovery in regional trade was still some time off.

“We’re willing to cut our bill in half to meet the needs right now,” she said Tuesday at a Politico Playbook event. “We’ll take it up again in January.”

Pelosi’s spokesman Drew Hammill later said that she was referring to previous offers to meet Republicans “halfway, not cutting our bill in half.”

The Trump administration has advocated a so-called skinny approach, pushing for a smaller package that addresses areas on which both sides agree. A key sticking point so far has been a Democratic call for almost $1 trillion in aid for state and local authorities, which have seen their finances crippled by the economy’s slump into recession. President Donald Trump says the move would reward what he says are poorly run states.

Some Democrats and Republicans have a “real desire” to reach agreement on a smaller coronavirus relief bill that could be worth around $500 billion, a senior Trump administration official said late on Monday.

The official said the agreement could include funding for the U.S. Postal Service, additional funding for loans to small- and medium-sized businesses to keep workers on their payrolls and potentially added money for schools.

“I think there’s a real desire by some in the Democratic caucus and some in the Republican conference, both in the House and the Senate, to do a smaller deal on the things we can agree upon,” the official said. “It could be about $500 billion.”

via ING

Oil has come under pressure in early morning trading in Asia, despite the API reporting overnight that US crude oil inventories fell by 4.26MMbbls last week, which was larger than the market was expecting. The concern seems to be more on the product side, with API numbers showing that US gasoline inventories increased by 4.99MMbbls over the week, which was very different from the draw the market was expecting, and will likely raise worries once again over the demand recovery. The more widely followed EIA numbers will be released later today.

Today will also see the OPEC+ Joint Ministerial Monitoring Committee (JMMC) meet, which will discuss compliance with the output cut deal over the last month, with particular focus on the stragglers and their compensatory cuts. While there is still plenty of uncertainty over the demand outlook, along with weaker Brent time spreads, physical values and continued weakness in refinery margins, it is largely expected that OPEC+ will continue with the deal in its current form, and so retain cuts of 7.7MMbbls/d for now.

The U.S. State Department is asking colleges and universities to divest from Chinese holdings in their endowments, warning schools in a letter Tuesday to get ahead of potentially more onerous measures on holding the shares.

“Boards of U.S. university endowments would be prudent to divest from People’s Republic of China firms’ stocks in the likely outcome that enhanced listing standards lead to a wholesale de-listing of PRC firms from U.S. exchanges by the end of next year,” Keith Krach, undersecretary for economic growth, energy and the environment, wrote in the letter addressed to the board of directors of American universities and colleges, and viewed by Bloomberg.

“Holding these stocks also runs the high risks associated with PRC companies having to restate financials,” he said.