Question

Report (summarize, discuss or analyze) at least one international financial news/events occurred in the current weeks about global financial markets, the financial markets of US or other countries/ regions.

Note 1: include but not limited to news/events about foreign currency, international monetary system, multinational corporation operation, capital flow, cross-border merger and acquisition, international banking, and global investment.

Note 2: please indicate the information sources such as the web links or any references.

Note 3: grades on relevance and significance of the news/events.

Answer 1

U.S. economy’s historic slump in the second quarter lowered to a 31.7% annual decline &

US debt will overtake GDP next year for the first time since 1946

NEWS- The unprecedented fall in gross domestic product in the second quarter was marginally updated to reflect a 31.7% annual drop, underlining the destruction of the economy caused by the coronavirus pandemic.

foreign currency, -Exchange rate fluctuations during the COVID-19 pandemic are an important indicator to global policymakers of ongoing economic stress. Aggressive and organised policy responses within the G20 and the wider world will benefit fragile economies and dampen excessive currency fluctuations. Primary initiatives include central bank swap lines, expanded support for international financial institutions and the prevention of protectionist policies.

international monetary system, - Supply chains are failing, businesses are facing bankruptcy, and mass unemployment is continuing. Covid-19 has sparked a global financial crisis and is pressuring states to establish recovery packages on a scale that has not been seen before. In addition, the crisis has brought the US dollar's hegemony into question and could redefine the global monetary system. The research team at the Institute for Advanced Sustainability Studies (IASS) has developed four scenarios that demonstrate how political decisions can shape the post-Corona environment.

multinational corporation operation,- In addition to demand, trust and supply chain disruption caused by the spread of COVID-19, businesses will now also have to fix currency depreciation caused by the combination of falling oil prices and global final markets that fuel a flight to safety. As a result, pricing strategies and consumer market sensitivity will challenge companies to solve the challenges in the coming months, regardless of the degree of COVID-related problems in individual countries.

capital flow,-

• The COVID-19 crisis has triggered major disruptions for exchange rates and global capital flows.

• Cross-border portfolio investment stopped in many emerging markets as well as in some advanced economies in March 2020.

• Countries have not had to resort to capital controls. To support foreign currency liquidity, several emerging markets have intervened in the foreign exchange market and relaxed rules on capital inflows.

cross-border merger and acquisition,- The COVID-19 pandemic has impacted public well-being, but there is also a commercial effect on multinational business activities as well as the economic sector. The effects of the spread of this pandemic are felt, all the more profoundly, in some projects and have therefore been influenced by various aspects of Mergers and Acquisitions ( M&A). Organizational lockdowns and travel restrictions have disrupted the due diligence process and have resulted in agreements being deferred or cancelled time and time again. Deals are usually calculated to depend on the majority of turnover statistics, which, given the prevailing situation, are difficult to forecast.

global investment.-

• Coronavirus has dramatically impacted globalization, with flows of foreign direct investments (FDI) being disrupted as a result.
• According to the UN Conference on Trade and Development (UNCTAD), global FDI flows are expected to contract between 30 to 40% during 2020/21.
• If the contraction in global FDI lasts for a while, the consequences for developing countries will be severe.

Sources can be referred back to CNN and CNBC as well as Reuters articles.