August 6, 2020

Chinese video-sharing app TikTok planning to open its first European data center in Ireland

The center will store videos, messages and other data generated by European users from the short-form video-sharing app. Until now all of its users’ records have been stored in the US, with a back-up copy held in Singapore.TikTok said that the decision to set up a European center was something it had been thinking about “for a long time.”

The app’s director of public policy for Europe, Theo Bertram, told The Irish Times “This is a demonstration of our commitment for the long term in Europe and this is also about cementing the important role that Ireland plays for TikTok.” He added that “Dublin is really important for us and is going to grow rapidly.” 

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TikTok employs more than 1,000 people in Europe, with over 800 based in Britain and Ireland. It has been expanding its presence in Dublin in recent months as speculation mounts that its Chinese parent ByteDance might decide to locate its European headquarters there.

The hugely popular video-sharing social media platform has become the latest target of the Trump administration, with Washington accusing it of collecting data on Americans and sending it to the Chinese government. TikTok has denied any links to Beijing, stressing that all its servers used for the American market are located in the US. Tech giant Microsoft announced it is interested in buying TikTok’s US business to continue operations in the country.

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US unemployment during Covid-19 pandemic approaches 55 MILLION

That’s down from the 1.434 million who applied during the previous week, and would represent the 20th straight week that new claims topped a million. Continuing claims (for the week ending July 25) could be down from last week’s 17.018 million to 16.9 million.

New jobless claims in last week’s report rose for a second straight week, after what had been 15 consecutive weeks of declines previously. Statistics showed that more than 54 million people filed new unemployment insurance claims since the week ending March 20.

“Initial claims have remained stubbornly high, and the number of individuals receiving unemployment insurance has barely declined from its peak,” said Credit Suisse Chief Economist James Sweeney, as cited by Yahoo Finance.

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Continuing unemployment insurance claims, which represent the number of individuals still receiving benefits, are expected to have fallen to just under 17 million during the week ending July 25. They peaked at nearly 25 million in mid-May, and remain at more than double the pre-pandemic peak of 6.6 million that was reached in mid-2009.

The latest report for new weekly unemployment insurance claims covers the final week in which Americans were eligible for enhanced federal unemployment benefits as part of Congress’s original Coronavirus Aid, Relief, and Economic Security (CARES) Act passed in March. The weekly $600 benefit, which was part of the Federal Pandemic Unemployment Compensation program, expired at the end of July.

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The dollar is close to a Wile E. Coyote moment when it drops off the cliff & plummets – Peter Schiff

In his latest podcast, Schiff says that “in reality, gold is the only asset that’s not in a bubble because of negative real interest rates.”  The only thing that really surprised him about the precious metal exceeding $2,000 is that it took so long to get there.

“But I think that the thousand-dollar milestones are going to start dropping like dominoes here. And I think people are going to take notice, because today, very few people are noticing or commenting on the significance of gold going over $2,000 because they don’t understand it.”

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According to the economist, the rising price of gold is indicating that the US currency is in trouble. “The dollar is on fire, and the fire may have begun with the dollar, but it’s going to spread to the financial markets and the entire economy and people just don’t get this,” he said.

Schiff noted that the greenback is close to a Wile E. Coyote moment, when it drops off the cliff and plummets. “I think that’s what’s going to happen soon to people who are in the dollar. As soon as they look down and realize where they’re standing, the dollar is going to drop like a stone and that’s when the price of gold is going to skyrocket. And so, you’d better be on that rocketship before that ride begins.”

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Global oil demand will shrink by 8% in 2020 – IMF

This year, oil prices will be 41 percent lower than in 2019, the IMF said in its ‘Global imbalances and the COVID-19 crisis’ external report. The direct impact of the low oil prices on oil trade balances will vary across economies, reflecting their dependence on oil exports and imports, according to the IMF.

The fund’s estimates for this year’s global oil demand decline are in line with other forecasters such as the International Energy Agency (IEA) and OPEC.

Last month, the IEA said in its latest Oil Market Report that global oil demand was set to crash by 7.9 million barrels per day (bpd) this year, but this forecast is slightly more optimistic than last month’s expectation of an 8.1-million-bpd demand drop.

The IEA, however, noted that the recent rise in COVID-19 cases and the reinstating of partial lockdowns in some countries continue to contribute to the uncertainty surrounding the world’s global oil demand in 2020.

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This year, the world is expected to consume an average of 92.1 million bpd of oil, compared to the typical demand of 100 million bpd, the IEA said.

OPEC, for its part, expects overall global oil demand to drop by 8.9 million bpd in 2020, before rising by seven million bpd in 2021, when it will still be lower than demand in 2019.

The oil price plunge and the production cuts after the coronavirus pandemic will hit oil exporters in the Middle East and North Africa (MENA) hard, with the combined oil income for those countries expected to plummet by US$270 billion this year compared to 2019, the IMF said in its latest update on the region last month.

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Record gold rally TRIPLES South African miner’s profits

The company, which earlier predicted that the coronavirus pandemic would have a limited negative impact on its performance, now says it could reap hefty gains due to rising gold prices.

Headline earnings (the main profit measure in South Africa) for the first half of the year are expected to be $19.5- $20.5 per share, or between 290 percent and 310 percent higher than the $0.05 per share reported last year.

READ MORE: ‘The world is going back to a GOLD STANDARD as the US dollar is about to collapse’ – Peter Schiff

“The increase in earnings for the period is driven largely by the increase in the gold price received,” Gold Fields said in a statement, adding that attributable gold equivalent production rose only marginally.

The mining company kept its production guidance for the full-year at the same level, but said costs could be higher than previously flagged after these rose during the first half of the year.

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Gold prices have been rallying amid global pandemic uncertainty. In June, bullion had its biggest monthly gain since 2012, soaring 11 percent as investors weighed a weaker dollar and record-low US real yields. The precious metal was trading at around $2,050 per ounce on Wednesday.

The discovery of gold in the late 19th century in South Africa made it the world’s primary gold producer. Over 50 percent of all gold reserves are found in the country, with the Witwatersrand Basin remaining the largest gold resource in the world.

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Silver to outshine gold thanks to global economic recovery demand growth – analysts

Spot gold prices have skyrocketed more than 32 percent so far this year and are on track for the best year since 1979. Silver prices have also followed suit, shooting up more than 30 percent this year to date. On Tuesday, gold was trading 1.45 percent higher, at $2,050, while silver added 2.12 percent to $26.58 per ounce.

The massive blasts in Beirut, Lebanon, which killed dozens and wounded thousands overnight, “probably (added) to the shine of Gold above $2020,” said Mizuho Bank in a note seen by CNBC.

Analysts say that as the world economy is set to bounce back, it will drive up industrial consumption and will lead to an increase in demand for silver, which has many industrial uses.

Also on ‘The world is going back to a GOLD STANDARD as the US dollar is about to collapse’ – Peter Schiff

“Silver … has a much higher industrial component to it. So, much higher component of silver supply demand in industrial consumption. And in an environment where we see the global economy recovering, that’s another reason to buy silver,” Michael Hsueh, a commodities and foreign exchange strategist at Deutsche Bank, told CNBC. He said that he expects silver to outperform gold. Hsueh echoed analysts at Citi who also said in a note last month that the rebound in manufacturing activity is pushing silver prices higher compared to gold.

Generally, both precious metals are set to continue rallying, analysts say. According to a precious metals fund manager at Jupiter Asset Management, Ned Naylor-Leyland, “There is plenty of upside for both gold and silver, in our view and … for silver to continue to outshine even gold.” 

READ MORE: Silver on the way to hit RECORD HIGH as ‘general commodity bull market’ coming – Peter Schiff to Boom Bust

He pointed to factors that are “tipping investors over the edge in their distrust of fiat currencies — especially the US dollar.” These include monetary easing and the spike in government spending on managing the coronavirus outbreak, he said.

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US dollar could be a ‘CRASH RISK’ amid rising economic & political uncertainty

“We expect the currency to be undermined by an ebbing of safe-haven flows, a reduction in the US rate advantage, and political uncertainty ahead of the November presidential election,” UBS analysts wrote last week.

The ICE US Dollar Index, which measures the dollar against a basket of six major rivals, plunged 4.2 percent in July – its biggest one-month decline since September 2010, data showed. The index was trading up on Tuesday at around 93.69, but data from the Commodity Futures Trading Commission showed that the dollar is well out of favor with speculative traders.

According to Steven Barrow, head of G-10 strategy at Standard Bank, the dollar’s weakness versus developed currencies comes at a time of heightened global uncertainty surrounding the Covid-19 pandemic. Usually, the dollar behaves “a bit better” against its developed-economy peers during a crisis, he said in a note seen by Market Watch.

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The strategist worries that the combination of rising economic and political uncertainty amid the coronavirus pandemic and ahead of the November presidential election could pose a so-called “crash risk,” a danger more often associated with emerging-market currencies.

Barrow noted that the dollar has held up well versus emerging-market currencies, which means the risk may be mainly against other developed-world currencies, like the euro, Japanese yen and Swiss franc.

Interest rate cuts and other easing measures by the Federal Reserve, as well as the drop in Treasury yields to or near all-time lows, have significantly reduced the US rate premium versus other “safe” currencies. What’s really important, according to Barrow, are other factors, like the liquidity of assets, particularly government bonds. The near-freeze-up of the US Treasury market at the height of the Covid-19 crisis earlier this year marked a “bit of a wobble,” he said. That could be a problem if it makes traders and investors reluctant to head for Treasuries in the event of another risk-off event.

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The Economic Uncertainty Index showed that US uncertainty has soared to levels similar to those in the rest of the world, while it had been significantly below global levels before the pandemic.

According to Barrow, there are other factors that could lead to dollar weakness, but the underlying question is whether the dollar can be trusted. “For if trust has disappeared in the US’ economy, policy making, election credibility and more, then the dollar could be in for a slump, at least against other major currencies,” he said.

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EU launches antitrust probe into Google’s Fitbit deal over privacy issues

According to the European Commission, a pledge by Google not to use Fitbit’s data for advertising in a bid to address competition concerns was insufficient. 

Google announced its Fitbit acquisition back in November, and it could be a full year or more before the company is able to finalize it.

The company aims to take on market leader Apple and Samsung in the fitness-tracking and smart-watch markets via the deal. 

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Google has promised not to use data but regulators and consumer advocacy groups have been raising concerns about the search giant gaining access to sensitive data like fitness activities, heart rates, sleep patterns, and more.

Consumer groups from across Europe, the US, Mexico, Canada, and Brazil have already called the deal a “test case” for regulators’ abilities to prevent data monopolies.

EU officials are reportedly demanding more concessions that would guarantee that Fitbit’s data won’t be open to third-party developers. They also seek assurances that Google won’t use Fitbit data to improve its search engine.

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US ‘theft’ of TikTok turning once great America into ‘rogue country’ – Chinese media

According to the state-backed paper, Washington’s “bullying” of Chinese tech companies was a consequence of a zero-sum vision of “America first” that left China with no choice but “submission or mortal combat in the tech realm.”

China had “plenty of ways to respond if the [Trump] administration carries out its planned smash and grab,” the paper said.

Short-video app TikTok has been under fire since the Trump administration accused it of collecting data on Americans and sending it to the Chinese government. TikTok has denied any links to Beijing, stressing that all its servers used for the American market are located in the US. General Manager Vanessa Pappas dismissed privacy concerns, saying the company is “not planning on going anywhere” and intends to create 10,000 US jobs over the next three years.

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US President Donald Trump reversed course on a plan to ban the app when American tech giant Microsoft announced plans to partially acquire TikTok’s business. Trump gave the green light to the plan, saying the deal between Microsoft and TikTok’s Chinese owner ByteDance should be inked within 45 days. He also said that some “key money” would have to be paid to the US Treasury Department for making the deal possible. 

READ MORE: ‘Stop politicizing economy’: Beijing blasts US for threatening to ban TikTok other Chinese apps

The editor-in-chief of China’s Global Times newspaper Hu Xijin called the move an “open robbery” and said, “President Trump is turning the once great America into a rogue country.”

Technology has been a major part of the trade dispute between the two countries, with TikTok becoming the latest firm to be dragged into the fight.

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India seeks tighter control on imports of Chinese goods from other Asian countries

Two government sources told Reuters that India is planning to raise quality standards of imports, impose quantity restrictions, mandate stringent disclosure norms and initiate more frequent checks at ports of entry for goods coming from many Asian countries. According to the sources, the measures will mainly target imports of base metals, electronic components for laptops and mobile phones, furniture, leather goods, toys, rubber, textiles, air conditioners and televisions, among other items.

Last week, India’s Trade Ministry issued a notice to restrict inbound shipments of TVs by requiring importers to get a special license. The restrictions are expected to primarily hurt Malaysia, Thailand, Vietnam and Singapore, which are members of the Association of Southeast Asian Nations (ASEAN) and with which India has a free trade agreement (FTA). India is also worried about heavy trade flows from South Korea. 

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“Raising duties has a limited impact,” one of the unnamed officials said, adding: “Now we want to raise quality standards and also make sure that goods in FTA routes have roots in those countries. So, customs would be more vigilant than before.”

The government will also discuss raising the value-addition requirement for products imported from those countries from the current level of 20 percent to 40 percent, the official said, adding that FTAs could be reviewed too. 

“A lot of the Asian partners have become a place from where just Chinese goods are routed. We are going product by product to design various kinds of action, most of which will be on non-tariff lines,” the official said. 

According to the sources, the government was inclined to only stick to those free trade agreements that it deems mutually beneficial. India has a trade deficit with most of the countries with which it has signed FTAs. 

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The tightening of regulations on imports from China follow a deadly clash in June between Indian and Chinese soldiers along a disputed border in the Himalayas in which 20 Indian soldiers were killed. New Delhi has since imposed 100 percent physical checks on shipments from China, which is its second-biggest trading partner. Trade turnover between the two countries was worth $87 billion in the fiscal year ending March 2019, with a trade deficit of $53.57 billion in China’s favor, the widest India has with any country.

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