Japan’s yen takes the spotlight in central bank week

SINGAPORE  – The U.S. dollar barely moved in Asian trades on Monday, even as sterling blipped higher and the yen dipped, as a Japanese holiday and a bunch of upcoming central bank meetings sucked the air out of markets.

The Bank of Japan’s policy meeting on Friday is the highlight of the week in Asia, after Governor Kazuo Ueda stoked speculation of an imminent move away from ultra-loose policy.

That’s made the BOJ somewhat of a standout in a week packed with central bank meetings, with the U.S. Federal Reserve seen doing a hawkish pause on Wednesday and Bank of England possibly raising rates one last time on Thursday.

The yen was flat versus the greenback between 147.63 and 147.88 per dollar, with markets in Japan closed for a national holiday. In the days since Ueda’s remarks about a early move from negative rates, it has dropped 1.3 percent and taken losses for 2023 to more than 11 percent.

Carol Kong, economist and currency strategist at Commonwealth Bank of Australia, said she expects the yen to be volatile leading up to the policy meeting and that investors may have potentially misinterpreted Ueda’s comments.

The recent spell of weakness in Japanese wages and possibility prices too could soften and push the BOJ farther from its inflation goal, the case for a BOJ policy tightening is still not very strong, Kong said.

“In terms of the direction of travel, dollar/yen can definitely track higher…particularly if Governor Ueda sounds dovish and dashes hopes of policy tightening at the upcoming meeting,” she said.

Wei-Liang Chang, FX and credit strategist at DBS Bank, said market participants expect the BOJ could give guidance on when its negative interest rate policy will be reversed and the path of rate hikes beyond that.

“Anticipation of new BOJ rate guidance could support the yen into the meeting date, with the FOMC meeting also contributing to volatility this week,” Chang said.

The dollar index was a tad lower at 105.23, with the euro up 0.12 percent at $1.0705. Sterling was last trading at $1.2395, up 0.1 percent on the day.

Stark divergences in economic growth and in yields will keep the dollar propped up mostly, investors expect, particularly against the euro. Sterling has slid nearly 6 percent against the dollar since mid-July, while the euro has dropped more than 5 percent as the UK labor market and economy and the euro zone economy slowed.

The European Central Bank raised interest rates to 4% last week but said this hike could be its last.

With Japan shut, cash Treasuries were untraded on Monday.

U.S. Treasury yields have been edging higher, with the two-year above the 5 percent threshold and up 25 bps this month, spurred by rising government spending and the anticipation of the Fed keeping rates high for longer faces to rein in inflation that’s still above target. Last week’s U.S. retail sales data played a part, reducing the odds of recession even further.

Futures are pricing in almost no chance that the Fed raises interest rates at the end of its two-day meeting next Wednesday.

The Bank of England is likely to hike interest rates for the 15th time and take benchmark borrowing costs to 5.5 percent, and markets are already looking for a pause in a massive tightening cycle that has policymakers worried about the cooling economy.

UK inflation figures for August are also due on Wednesday, just ahead of the meeting.

Meanwhile, oil prices are adding a layer of complication to central banks’ growth-inflation dilemmas. Oil is also on track for its biggest quarterly increase since Russia’s invasion of Ukraine in the first quarter of 2022.

Brent crude futures are at 10-month highs above $93 a barrel, after having posted a third weekly gain on supply tightness spearheaded by Saudi Arabian production cuts and some optimism around Chinese demand.

-reuters

Biden 'optimistic' on debt talks with Republicans as default looms

WASHINGTON —President Joe Biden said Sunday he remains "optimistic" about finding an agreement with his Republican opponents to raise the US debt limit and avoid a default, which his administration warned would cause "catastrophic" consequences.

Congressional Republicans are demanding budget cuts in exchange for lifting the US borrowing limit, while the White House has insisted for months that the nation's credit should not be up for negotiation.

Alarm bells are meanwhile ringing over the possibility of a first-ever US default, with uncertainty over the actual date the government would stop being able to pay its bills.

The two sides have remained at an impasse despite weeks of warnings from government officials and bankers that a default could unleash drastic consequences, including a possible recession and likely global financial contagion.

Nonetheless, Biden said Sunday he thinks he will eventually be able to reach a deal.

"I remain optimistic because I'm a congenital optimist, but I really think there's a desire on their part as well as ours to reach agreement. I think we'll be able to do it," Biden told reporters while out on a bike ride near his beach home in Delaware.

A much-anticipated new round of debt-ceiling talks between Biden and Republican leaders, including House Speaker Kevin McCarthy, was postponed from Friday until the coming week.

Asked if the Tuesday meeting was still on, Biden said: "I think so."

Treasury Secretary Janet Yellen has warned a default could occur by June 1, while the nonpartisan Congressional Budget Office forecast on Friday the date of June 15.

"We shouldn't be here," Deputy Treasury Secretary Wally Adeyemo said Sunday on CNN's "State of the Union."

"If Congress failed to raise the debt limit by the time of default, we would go into a recession and it'd be catastrophic," he warned.

"The United States of America has never defaulted on its debt -- and we can't."

'MASSIVE CUTS' 

Biden has stated he wants a "clean" hike of the debt ceiling, but Republicans are insisting any extension of the country's borrowing authority, currently capped at $31.4 trillion, come with substantial curbs on spending.

"It's time to bring spending levels back to pre-Covid, and then we can talk about raising the debt ceiling," Byron Donalds, a Republican representative from Florida, told FOX News on Sunday.

"If Joe Biden brings nothing to the table, if all he does is sit there with his hands in his pockets... then he's the one leading our nation into default."

Former president Donald Trump has encouraged Republican lawmakers to hold out for a default if Biden doesn't agree to "massive cuts."

The looming possibility of a default has also threatened Biden's upcoming trip to Asia for a G7 leaders meeting, among other events in the region.

Asked by reporters Sunday if he still planned to leave this week, Biden said: "That's my plan as it stands now."

'CONSTRUCTIVE' NEGOTIATIONS 

Adeyemo acknowledged "constructive" negotiations were ongoing at the staff level, while pushing back on assertions that Biden does not want to address ballooning US debt.

"The president's laid out a plan that includes $3 trillion in debt relief over 10 years," Adeyemo said, referring to Biden's budget request unveiled in March, which featured tax increases on the wealthy and businesses.

Congressional leaders should address ways to hammer out a deal on fiscal policy, "but as we have that conversation, there is no reason we shouldn't raise the debt limit and prevent default in this country, a default that could lead to a massive recession that would cost us millions of jobs," he said.

Lael Brainard, director of the White House's National Economic Council, maintained that a deal would be reached.

"Our expectation is that Congress will do what is necessary" to avoid a default, Brainard, a former Federal Reserve vice chair, told CBS Sunday show "Face the Nation."

Biden addressed the issue on Saturday in Delaware, where he talked briefly to reporters.

"They're moving along," he said of the talks. But while there was "real discussion," he added the two sides were "not there yet."

Agence France-Presse 

China's economy expected to rebound as zero-Covid era fades

BEIJING — China is expected to announce an economic rebound on Tuesday, when Beijing releases its first quarterly GDP figures since abolishing growth-sapping Covid restrictions late last year.

The Asian giant's virus containment policy -- an unstinting regime of strict quarantines, mass testing and travel curbs -- strongly constrained normal economic activity before it was abruptly ditched in December.

The disclosures on Tuesday will give the first snapshot since 2019 of a Chinese economy unencumbered by public health restrictions, with analysts polled by AFP expecting an average of 3.8 percent year-on-year growth in the period from January through March.

But the world's number two economy remains beset by a series of other crises, from a debt-laden property sector to flagging consumer confidence, global inflation and the threat of recession elsewhere.

"The recovery is real, but still in its early stage," said Larry Hu, chief China economist at the investment bank Macquarie.

Any rebound "will be gradual, largely due to the weak confidence" of consumers, which in turn makes companies "reluctant" to hire more staff, he said.

China's economy grew by just three percent in the whole of last year, one of its weakest performances in decades.

It posted a 4.8 percent expansion in the first quarter of 2022, though growth pulled back to just 2.9 percent in the final three months of the year.

PROPERTY PERILS

A creeping crisis in the property sector -- which together with construction accounts for around a quarter of China's GDP -- continues to "pose challenges to economic growth", said Rabobank analyst Teeuwe Mevissen.

Real estate was a key driver of China's recovery from the initial wave of the pandemic in 2020, when Beijing managed to stop the coronavirus from spreading widely.

But weak demand has since plagued a sector already afflicted by falling home prices and crippling debts that have left some developers struggling to survive.

The situation appears to have eased slightly in recent weeks as official support helped prices stabilize in March, according to figures released on Saturday by the National Bureau of Statistics.

Economists will also be watching keenly on Tuesday for March's retail data, the main indicator of household consumption.

Retail sales finally ticked up in January and February following four successive months of contraction, according to official figures.

But nearly 60 percent of urban households still prioritize saving money over investing or spending it, up from 45 percent before the pandemic, according to a survey by China's central bank.

Consumer confidence "remains well in negative territory" despite the heartening abolition of Beijing's Covid curbs, said Harry Murphy Cruise, a macroeconomist focusing on the Asia-Pacific region at the ratings agency Moody's.

"Households have long memories and will take time to forget the economic pain of recent years," he told AFP.

GLOBAL TENSIONS

Beijing has set a comparatively modest growth target of around five percent this year, a goal the country's Premier Li Qiang has warned could be hard to achieve.

While many experts tend to take China's official figures with a grain of salt, most expect Beijing to hit that mark.

An AFP analysts' poll predicted that the Chinese economy would grow by an average of 5.3 percent this year.

That is roughly in line with the International Monetary Fund's forecast of 5.2 percent.

Still, analysts warned that wider global trends could yet weigh on China's recovery.

They include geopolitical tensions with the United States, the threat of recession in other major economies and galloping global inflation.

Agence France-Presse

Economists expect US recession, above-target inflation this year

WASHINGTON — The United States will likely enter a recession this year and face high inflation well into 2024, a majority of economists predicted in their response to a semiannual survey.

More than two-thirds of respondents to the National Association for Business Economics (NABE) Policy Survey also see inflation remaining above four percent at the end of this year.

The survey summarized the responses of 217 NABE members, and was conducted between March 2 and March 10, the organization said in a statement.

The US Federal Reserve has raised rates 4.75 percentage points in a bid to tackle rising inflation, which reached its highest level in decades last year.

Price rises slowed slightly to an annual level of 6.0 percent in February, which is well above the Fed's long-term target of two percent.

Amid the gloomy economic forecast, there was also some good news, with just five percent of respondents believing the US is currently in the midst of a recession, "far fewer" than the 19 percent in its previous economic survey, the NABE president Julia Coronado said in a statement.

Economists also slightly raised the chances of the Fed achieving a so-called "soft landing" -- bringing down inflation while avoiding a recession -- from 27 percent in August to 30 percent in March this year.

Agence France-Presse

Asian markets extend new year rally on China, Fed hopes

HONG KONG - Asian markets resumed their strong start to the year Monday, tracking a surge on Wall Street fuelled by optimism over China's reopening and hopes the Federal Reserve will slow its pace of interest rate hikes.

All three main indexes in New York soared more than two percent Friday after a closely watched report showed a forecast-busting rise in new jobs but a slowdown in wages growth.

That came as separate figures showed a shock contraction in the crucial services sector -- the first since spring 2020 at the height of the pandemic.

The readings, while suggesting the world's top economy was showing signs of weakness, were seized on by traders hopeful that the Fed will begin to temper its monetary tightening campaign.

Investors are now betting officials will lift borrowing costs about 25 basis points at their next meeting at the end of the month.

However, policymakers have warned that rates will continue to go up as they aim to bring decades-high inflation under control, with some saying they will not likely be cut until 2024.

In a further sign of hope, data Friday showed eurozone inflation slowed for a second month in a row in December, to 9.2 percent -- the first time in single digits since September.

"If Friday's price action tells us anything it's that investors really want to believe the peak inflation narrative that has helped support the rebound in equity markets that we've seen so far this year," said CMC Markets analyst Michael Hewson.

Asian equities started the day on the front foot, with Hong Kong sharply higher and Shanghai also well up.

Traders in the two cities have been on a high at the start of the year as they welcome China's emergence from zero-Covid as well as pledges to help the struggling economy, particularly the property sector.

The borders between Hong Kong, Macau and China were partially opened Sunday, providing a much-needed boost to Hong Kong. Macau-based casinos surged on the move.

"The U-turn in China's Covid policy is consequential to growth and equity returns," said SPI Asset Management's Stephen Innes.

"So with the lifting of border restrictions between China/Hong Kong/Macau and international travel reopening, local travellers are not only in a celebratory mood but also investors."

Sydney, Seoul, Singapore, Taipei, Manila, Mumbai, Bangkok and Wellington also enjoyed a strong start to the week. Tokyo was closed for a holiday.

London and Frankfurt rose at the open but Paris dipped.

Easing expectations about US rates were also weighing on the dollar, which extended Friday's retreat against its major peers.

Oil prices rose, having plunged around eight percent last week on demand concerns caused by a spike in Covid infections in China as containment measures are lifted.

However, while the commodity is now at more than a one-year low, observers say it could rally again as China reopens and the global economy recovers.

"I think oil will go upwards of $140 a barrel once Asia fully reopens, assuming there will be no more lockdowns," said hedge fund manager Pierre Andurand. He added that the "market is underestimating the scale of the demand boost that it will bring".

Key figures around 0820 GMT 

Hong Kong - Hang Seng Index: UP 1.9 percent at 21,388.34 (close)

Shanghai - Composite: UP 0.6 percent at 3,176.08 (close)

London - FTSE 100: UP 0.2 percent at 7,714.36

Tokyo - Nikkei 225: Closed for a holiday

Dollar/yen: DOWN at 132.00 yen from 132.13 yen on Friday

Euro/dollar: UP at $1.0690 from $1.0647 

Pound/dollar: UP at $1.2156 from $1.2095

Euro/pound: DOWN at 87.94 pence from 88.01 pence

West Texas Intermediate: UP 1.9 percent at $75.20 a barrel

Brent North Sea crude: UP 1.9 percent at $80.04 a barrel

New York - Dow: UP 2.1 percent at 33,630.61 (close)

-- Bloomberg News contributed to this story --

Agence France-Presse

US regulators warn banks over crypto risks

WASHINGTON — US bank regulators warned Tuesday that crypto assets and exposure present risks to lenders, urging organizations to ensure they manage the dangers.

The joint statement comes after the sudden collapse of cryptocurrency platform FTX -- worth $32 billion before it filed for bankruptcy in November -- which sent chills across the sector.

FTX's disgraced founder Sam Bankman-Fried has since been accused of committing one of the biggest financial frauds in US history, sparking calls for greater oversight.

"It is important that risks related to the crypto-asset sector that cannot be mitigated or controlled do not migrate to the banking system," said the Federal Reserve, Federal Deposit Insurance Corporation and Office of the Comptroller of the Currency.

They added in a joint statement that events of the past year "have been marked by significant volatility and the exposure of vulnerabilities in the crypto-asset sector."

Banking organizations should be aware of risks such as fraud and scams, along with inaccurate or misleading disclosures, the agencies said.

There is also "significant volatility" in crypto-asset markets, and contagion risk in the sector due to connections between parties -- including through opaque lending, investing or funding.

The watchdogs said they continue to take a "careful and cautious approach" with crypto activities and exposure at banking organizations.

Meanwhile, lenders should "ensure appropriate risk management" such as board oversight and guardrails to identify and manage threats, the statement said.

FTX's implosion was swift following a Nov. 2 media report on ties between it and Alameda, a trading company also controlled by Bankman-Fried.

The report exposed that Alameda's balance sheet was heavily built on the FTT currency -- a token created by FTX with no independent value -- and exposed Bankman-Fried's companies as being dangerously interlinked.

Agence France-Presse

Most Fed officials say slower rate hike pace appropriate 'soon'

WASHINGTON –– A majority of US Federal Reserve policymakers found that a slower pace of interest rate hikes would "likely soon be appropriate," the central bank said Wednesday.

The Fed has embarked on an aggressive path to cool demand and bring down prices as inflation in the world's biggest economy surged to the highest level in decades, raising the benchmark borrowing rate 6 times this year.

With inflation hovering around 7.7 percent, the latest policy meeting in early November produced a fourth consecutive three-quarter point interest rate hike, a major rise.

This brings the rate to a range between 3.75 and 4 percent, the highest since January 2008.

But "a substantial majority of participants judged that a slowing in the pace of increase would likely soon be appropriate," according to minutes of the November meeting released Wednesday.

"A slower pace in these circumstances would better allow the committee to assess progress toward its goals of maximum employment and price stability," the minutes said.

Participants of the meeting noted that it would take time for the full effects of policy to be realized, and a few found that easing the pace of interest rate hikes could lower risks of instability in the financial system.

In a sign of diverging opinions, some cautioned the impact of rate hikes could "exceed what was required" to bring down inflation.

FEW SIGNS OF ABATING

But policymakers agreed at the meeting earlier this month that inflation was "unacceptably high" and well above the longer-run goal of 2 percent.

Annual consumer inflation came in at 7.7 percent in October, down from a blistering high 9.1 percent in June but still underscoring a heightened cost of living.

With surging consumer prices showing "little sign thus far of abating," some officials found that policy might have to be tightened more than anticipated.

They maintained that a period of slower growth would help reduce inflationary pressures.

Despite signs of slowing activity as the Fed's rate hikes trickled through the economy, officials saw that the labor market remained tight, with elevated wage growth.

New home sales posted a surprise increase last month as well, while demand for big-ticket American-made goods picked up more than expected, data released on Wednesday showed.

"Policy makers appear set to slow the pace of rate hikes," said economist Ryan Sweet of Oxford Economics.

But he noted that the Fed's path toward a soft landing is increasingly narrow, adding that the Fed's staff economists see "the odds of a US recession in the next year as basically a coin flip."

A growing number of voices, including some Fed officials, have advocated for smaller steps in the coming months.

Last week, Federal Reserve Governor Christopher Waller said signs of easing inflation pressures and a slowing US economy could allow the central bank to dial back its pace of rate hikes.

Fed Vice Chair Lael Brainard also said last week that it would likely be "appropriate soon" for the Fed to slow the pace of rate increases, adding that it would take time for tightening so far to flow through to the economy.

Agence France-Presse 

Biden admits 'very slight' US recession possibility

WASHINGTON - US President Joe Biden conceded Tuesday that a "slight" recession was a possibility following a downcast IMF economic forecast, amid rising inflation and uncertainty after the Russian invasion of Ukraine.

"I don't think there will be a recession," Biden told CNN. "If it is, it'll be a very slight recession. That is, we’ll move down slightly."

Agence France-Presse

PayPal expands payments services to help Ukrainian citizens, refugees

WASHINGTON - PayPal Holdings Inc expanded its services to allow Ukrainian citizens and refugees to receive payments from overseas, a move a senior Ukrainian official called a huge help as Russian forces continued to attack the country.

PayPal Chief Executive Dan Schulman told Deputy Prime Minister Mykhailo Fedorov in a letter that Ukrainians would also be able to transfer funds from their PayPal accounts to eligible credit and debit cards. The company has waived its fees on such transactions through June 30.

More than 3 million Ukrainians have fled the country since Russia launched its invasion on Feb. 24, an action Russia has described as a "special military operation.".

PayPal's move will allow refugees and Ukrainians to receive funds from friends and family members in the United States and elsewhere, and could also be used to transfer social payments by governments in the future, said Vladyslav Rashkovan, Ukraine's alternative executive director at the International Monetary Fund.

"It makes a huge difference for people," Rashkovan told Reuters, lauding Schulman's personal engagement in accomplishing the change in just two weeks.

Rashkovan said he spoke with some Ukrainians on the street outside his office about the new capability and they immediately opened an account at PayPal.com/ua/home to send money to their relatives. Ukrainian officials have been pushing for the expanded services since 2015, after Russia annexed the Crimea region, he added.

PayPal said it would start making the expanded services available on Thursday, with customers able to send and receive funds from their Ukrainian PayPal Wallet in dollars, Canadian dollars, British pounds and euros.

Once a customer transfers funds from their PayPal Wallet to an eligible Visa or MasterCard debit or credit card, the money will be available in the currency associated with that card.

While PayPal is waiving its fees for several weeks, it noted exchange rates and fees charged by a customer’s card issuer or bank account may still apply.

Previously, Ukrainian citizens could send money from PayPal accounts, but were unable to receive funds.

PayPal earlier this month shut down its services in Russia, joining many financial and tech companies in suspending operations there after its invasion of Ukraine.

-reuters

Omicron panic pummels equities, oil

NEW YORK - Global equity and oil markets slumped Monday on investor panic over the impact of worldwide measures to contain the fast-spreading Omicron coronavirus variant, dealers said.

Asia tanked due to concerns over a fresh global surge in coronavirus infections, sparking a fierce renewed selloff in Europe, while Wall Street indices also closed lower.

Oil tumbled as traders fretted over how the latest Covid-19 strain might hit the world's appetite for energy, which has already suffered a heavy blow since the pandemic erupted early last year.

In New York, sentiment was jarred by a crucial moderate Democratic senator's announcement that he would not support President Joe Biden's social spending bill, imperiling the measure that some analysts view as a positive for US growth.

"It does not feel like the most wonderful time of the year for Wall Street," Oanda's Edward Moya said in a note.

OMICRON PANIC MODE

The British pound fell sharply after the surprise weekend departure of Prime Minister Boris Johnson's Brexit minister David Frost.

"After battling endless headwinds in recent weeks, markets have finally been knocked over as the rapid spread of Omicron finally reaches panic mode," said AJ Bell investment director Russ Mould.

Meanwhile, the EU's drug regulator approved a fifth Covid jab as the United States warned of a bleak winter with the Omicron variant spurring new waves of infections globally.

Since it was first reported in South Africa in November, Omicron has been identified in dozens of countries, prompting many to reimpose travel restrictions and other measures.

The Netherlands imposed a Christmas lockdown, and Germany tightened restrictions notably affecting the unvaccinated, while media speculation swirls over the re-imposition of tougher UK curbs.

STOLEN CHRISTMAS?

The rapid spread of Omicron has also slammed the oil market and travel stocks, since a return to containment measures and travel curbs would hit the aviation and tourism industries as well as dampen demand for fuel.

"There is some de-risking in the face of headline news that has market participants thinking the Omicron Grinch might steal Christmas after all," said analyst Patrick J. O'Hare at Briefing.com.

With traders beginning to wind down ahead of the festive season, analysts said trade was thinner and markets more susceptible to swings, but the mood has become increasingly glum as central banks start paring their huge financial support to fight inflation.

World markets had briefly risen last week after other major central banks took action to combat soaring inflation, even as spiking Covid-19 cases threaten the fragile economic recovery.

The Bank of England delivered the first interest rate hike in three years, while the Federal Reserve said it would speed up the taper of its bond-buying program and indicated three interest rate hikes before the end of 2022.

Dealers were unmoved Monday by news that China had trimmed a key interest rate by five basis points as it looks to reignite the stuttering economy.

Meanwhile, in Chile, the Santiago stock market plunged almost seven percent at the opening bell after leftist Gabriel Boric decisively won the presidential election, with the Chilean peso also taking a beating.

Agence France-Presse

In Los Angeles, ‘tiny homes’ spring up for homeless people

LOS ANGELES — In a parking lot in Los Angeles, a village of miniature prefab houses has sprung up, one of several sites in America’s second-largest city where so-called “tiny homes” are being put up to help the homeless get back on their feet.

The City of Angels has a large homeless population, second only to New York. Tens of thousands live rough — their tents, and their distress, are plain for any resident or visitor to see.

In the Tarzana neighborhood, 76 tiny homes paid for by the city have been erected. Each is 64 square feet (six square meters), and is equipped with two beds and shelving as well as air conditioning and heating.

Each one costs $6,500 and can be set up in just 90 minutes. Toilets and showers are shared, and state-of-the-art washing machines face large, bright orange tables under umbrellas. The set-up feels a bit like a campground.

Zuri-Kinshasa Maria Terry, 46, has just moved into the Tarzana development.

The former stripper says she ended up on the streets a year ago, after two weeks in intensive care because she had contracted Covid-19, and waited two months for the tiny home village to open.

“It was the scariest thing in the freaking world to be out there,” Terry told AFP, adding she was “still grasping” the fact that she had found a steady place to live.

In addition to allowing a certain privacy, she said the main advantage of the tiny homes is “safety,” as compared to either living on the street or in a traditional shelter.

‘Building a case plan’

The Tarzana site is guarded 24 hours a day, and while residents do not get to keep the keys to their tiny homes, they can lock it from the inside, explains Rowan Vansleve, chief finance and administration officer of Hope of the Valley, a non-governmental organization that manages the development.

The process begins with “a really hot shower, getting a great meal and then building out a case plan” to help the new resident get out of their precarious situation, according to Vansleve.

“Once you’ve got a case plan, we’re going to assign you a tiny home and you’re going to work that plan however long that takes,” he added.

Residents have access to medical care and therapy, and three meals a day are provided. They are given lodging for three months at a time, which is renewable until the resident finds permanent housing, according to Brandon Hanner, the NGO’s program manager for the Tarzana site.

Roots of the crisis

The first village of tiny homes in Los Angeles opened in early 2021 and several more followed.

Similar initiatives have sprung up in recent years elsewhere in California, including San Jose, and in Seattle.

For those who advocate for the homeless, the projects are a mixed bag.

Mayer Dahan, founder of the Dream Builders Project, says the tiny homes can be “a very positive transition” for some, but he said he worried about “the concept that solutions could be found by trying to resolve the symptoms, as opposed to the underlying issue.”

For Shayla Myers, a senior attorney at the Legal Aid Foundation of Los Angeles, one problem is that “there is far too little affordable housing for people to exit out of these shelter facilities and into permanent housing.”

While acknowledging that tiny homes are a better option for some, Myers insisted that these homes are in fact “incredibly expensive” because of the operating costs — and that California must do more.

“There is no way to solve the homelessness crisis without addressing the root causes, which are poverty, wealth inequality and a lack of affordable housing options,” she said.

But the city wants to move quickly to clear its sidewalks of encampments, especially after a judge ordered such a move, saying at least some of the homeless need to be placed in housing by the fall — and using very harsh words for the city’s strategy on the crisis thus far.

Terry said she is very aware that tiny homes are far from a perfect solution, but for the time being, “it works.”

She hopes to do training to become a real estate agent, once her situation stabilizes.

“I wouldn’t wish it on my worst enemy,” she said of living in the streets.

Agence France-Presse 

Asian markets mostly up as vaccine, data add to recovery hopes

HONG KONG – Asian markets mostly edged up Wednesday but gains were tempered as investors took a breather following a recent run-up, though another round of healthy data provided cause for continued optimism for the global recovery.

President Joe Biden gave cause to cheer by saying all adults in the United States would be eligible for a vaccine by April 19, almost two weeks earlier than previously pledged, reinforcing hope that the world’s top economy will get back on its feet more quickly.

That came as California’s governor said he aims to fully reopen the most populous US state by the middle of June if the current pace of inoculations continues.

In a further sign the United States was bouncing back, officials said job openings had surged to a two-year high in February, well above the level expected by most analysts.

That followed last week’s forecast-busting employment report and data showing a strong pick-up in the manufacturing and key services sector.

The string of healthy data — along with Biden’s $1.9 trillion stimulus and $2.25 trillion infrastructure proposal — have helped world markets climb to record or multi-month highs.

Recent concerns that the recovery and expected spending splurge will fan inflation and force central banks to lift interest rates have eased for now, with benchmark 10-year US Treasury yields dipping.

The International Monetary Fund backed up the view of a strong rebound by hiking its 2021 growth forecast for the second time in three months, predicting a 6.0 percent expansion, from its 5.5 percent prior estimate.

Toshiba set to surge

“Early signs show the recovery is accelerating, suggesting a faster return to ‘normal’ than many had dared to hope a few months ago,” said JP Morgan Asset Management’s David Kelly.

“While this is very good news in general, it brings with it challenges for investors in making sure their portfolios are positioned for the very different financial landscape of a post-pandemic world.”

Wall Street was unable to maintain the momentum Tuesday, however, and all three main indexes retreated slightly.

But observers were confident the gains will continue.

“Central banks are continuing to keep interest rates so low so people are looking for some place to put their money where they can get a return,” Sarah Hunt of Alpine Woods Capital Investors told Bloomberg TV.

“I think that’s also why you have stocks priced somewhat for perfection.”

In early trade, Hong Kong dipped as it reopened after an extended holiday weekend, while Shanghai and Tokyo also dropped.

Analysts said buying was dampened by the Chinese central bank’s move to slow loan growth owing to concerns about the development of bubbles.

Elsewhere in Asia, Sydney, Singapore, Seoul, Taipei, Manila, Jakarta and Wellington were in positive territory.

Shares in Japanese giant Toshiba were set to soar Wednesday after it confirmed it had received a buyout offer from a British private equity firm that a report said could be worth $20 billion.

The Nikkei newspaper said CVC Capital Partners was considering a 30 percent premium over the industrial group’s current share price. A flood of buy offers that outweighed sell orders meant the stock could not be traded in early business.

Toshiba said it would “request detailed information and carefully discuss” the offer.

Key figures around 0245 GMT

Tokyo – Nikkei 225: FLAT at 29,685.77 (break)  

Hong Kong – Hang Seng Index: DOWN 0.5 percent at 28,790.62

Shanghai – Composite: DOWN 0.6 percent at 3,460.87

Euro/dollar: DOWN at $1.1869 from $1.1876 at 2100 GMT

Pound/dollar: DOWN at $1.3821 from $1.3823

Euro/pound: DOWN at 85.87 pence from 85.89 pence

Dollar/yen: UP at 109.80 yen from 109.73 yen

West Texas Intermediate: DOWN 0.2 percent at $59.24 per barrel

Brent North Sea crude: DOWN 0.1 percent at $62.65 per barrel

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Agence France-Presse 

For many, COVID-19 has changed the world of work for good

The upheaval in global labor markets triggered by the coronavirus pandemic will transform the working lives of millions of employees for good, policymakers and business leaders told a Reuters virtual forum on Tuesday.

Nearly a year after governments first imposed lockdowns to contain the virus, there is a growing consensus that more staff will in future be hired remotely, work from home and have an entirely different set of expectations of their managers.

Yet such changes are also likely to be the preserve of white-collar workers, with new labor market entrants and the less well-educated set to face post-COVID-19 economies where most jobs growth is in low-wage sectors.

"I think it would be a fallacy to think we will go back to where we were before," Philippines central bank Governor Benjamin Diokno told the Reuters Next forum.

"We were already geared towards the digital, contactless, industries … That will define the new normal."

The pandemic, which according to a Reuters tally has so far infected at least 90.5 million people and killed around 1.9 million worldwide, has up-ended industries and workers across the globe.

Hospitality and tourism are among those sectors worst-hit by stringent social-distancing rules and travel bans, while sectors that support the work-from-home economy are adding jobs, albeit often in low-wage roles.

"Driving, warehouse, construction - they're actually ahead of where they were last year," Chris Hyams, CEO of the global jobs listings website Indeed, said in an interview to be aired at the forum later on Tuesday.

Hyams said job searches on Indeed last year showed that office workers - who before the pandemic would typically flood the website on Monday mornings looking for a change in job - were now more interested in stability in their working life.

"What we saw for the first six months of pandemic was that employees were much less likely to be looking for something new," he said, adding those workers had now got used to home-working and were above all keen on retaining such flexibility.

But while he said there were already signs that some sectors were now ready to allow up to 70% of their workforces to operate remotely all the time, such benefits would often be reserved for better-educated white-collar workers.

"We believe equity and inclusion will be the next frontier," he warned. "Disparities that already exist in society are going to be heightened and exposed."

THE NEW-LOOK MANAGER

Some of those sectors most badly hit by the pandemic now face a long haul back to anything like their former health.

Australian Competition and Consumer Commission Chairman (ACCC) Rod Sims was pessimistic about the outlook for the aviation industry, seeing no return to normal international travel to and from Australia throughout 2021.

"I think free international travel between Australia and overseas will be a long time away, unfortunately," Sims told Reuters Next, noting how the virus has made a resurgence in Australia after being virtually stamped out late last year.

Other changes are more subtle, but will start to transform the way workers are hired and managed.

Indeed's Hyams said the job interview by Zoom had proven its worth and predicted a "secular shift" towards such practices.

"Employers and job-seekers found it safe, more convenient and much faster ... The future of hiring is going to very much start with remote and video interviewing," he said.

Observers of the workplace also expect the pandemic to fundamentally alter the way managers operate - not least because the current uncertainties mean they must remain open to change.

"It's no longer the role of the CEO to have all the answers," said Laura Storm, founder of Regenerators, a collective formed to spur new thinking about products, services and organizations. "The role of the CEO is to be a chief ecosystem officer or a facilitator."

Hephzi Pemberton, CEO of Equality Group, a consultancy and executive search firm, agreed.

"My hope is that our leadership will look and feel very different," she said, calling for companies to use the moment to fund genuinely long-term diversity and inclusion plans.

-reuters

Turkish lira hits another historic low amid pandemic

LONDON (AP) — Turkey’s currency tumbled further Friday, hitting another record low.

The Turkish lira dropped to 7.3677 against the dollar before making a recovery. The lira is down about 19% versus the U.S. currency since the beginning of the year. It was trading around 7.17 on Friday afternoon.

The drop is fueled by high inflation, a wide current account deficit and the Turkish government’s push for cheap credit to drive an economy that was already fragile before the COVID-19 pandemic hit.

Analysts have expressed concerns over the level of Turkey’s reserves and Turkish President Recep Tayyip Erdogan’s aversion to high interest rates.

Turkey had been hoping for an influx of foreign currency through exports and tourism revenues, but the pandemic has sharply undermined the tourism industry and disrupted global commerce.

Speaking after Friday prayers at the recently reconverted Hagia Sophia mosque in Istanbul, Erdogan said “there are serious zigzags in the global economy after the pandemic.”

He added: “I believe the Turkish lira will fall into place ... these are temporary fluctuations.”

AP

US sales of existing homes jump 20% after a 3-month slump

BALTIMORE (AP) — Americans stepped up their home purchases in June by a robust 20.7% after the pandemic had caused sales to crater in the prior three months. But the housing market could struggle to rebound further in the face of the resurgent viral outbreak and a shrinking supply of homes for sale.

Sales of existing homes rose last month to a seasonally adjusted annual rate of 4.72 million, the National Association of Realtors said Wednesday. Despite the sharp gain, purchases are still down 11.3% from a year ago, when homes had sold at an annual pace of 5.32 million. And Lawerence Yun, the Realtors’ chief economist, noted that sales remain roughly 20% below their pre-pandemic levels.

At the same time, housing has managed to avoid a deeper slump from the severe recession caused by the coronavirus. Demand has remained strong among buyers who have managed to weather the downturn, while record-low mortgage rates have helped sustain affordability.

“Buyers are out in force, but new listings remain the key to housing’s recovery,” said Danielle Hale, chief economist at Realtor.com. “More sellers are needed before we’ll see year over year gains in home sales.”

The number of property listings has plunged 18.2% from a year ago to 1.57 million. It’s the 13th straight month of shrinking supply on an annual basis. The shortage of homes makes it unlikely that the housing industry can significantly boost the overall economy.

Home buyers typically purchase new furniture and fix up older properties. Their ability to deliver such a spending boost is constrained if they can’t find an available house. The limited supply is also forcing up prices just when many Americans are struggling with financial uncertainty because of the recession.

The combination of steady demand and falling mortgage rates has helped fuel a 3.5% rise in the median price of an existing home over the past year to $295,300.

Home sales rose in the Northeast, Midwest, South and West last month. But the increases were most dramatic in the West, with a 32% gain and the South with a 26% gain.

Associated Press

Coronavirus turns Chile’s middle classes into new poor

During more than three decades of boom in Chile, the middle classes reaped the rewards, but just three months of the coronavirus pandemic has already reduced many to poverty.

When a protest movement took to the streets against inequality in October, it was largely led by the middle classes.


The protests dragged on for months, affecting many small businesses — and just as those were starting to recover, the coronavirus struck in mid-March.

With high levels of debt, facilitated by easy access to credit, and a lack of state support, a significant number of the middle class have been left in a vulnerable situation by the virus crisis.

“The richest 10% is the only sector relatively bulletproof in Chile,” said Dante Contreras, assistant manager at the Center for Social Conflict and Cohesion Studies (COES).

Contreras is also a professor at the University of Chile, which has calculated that poverty has risen from nine to 15%.


There’s an emergency family fund that was created to help people cope with the health crisis, but it only covers households bringing in less than 400,000 pesos ($490) a month.

That accounts for only 34% of Chilean households, meaning the entire middle class — which makes up almost half of Chile’s 18 million people — gets nothing.

“What you see in Chile is a high degree of fluctuation in household income. Families that leave poverty and families that return to poverty. And that is a snapshot of the high level of fragility that makes it difficult for them to take long term decisions,” said Contrerasa.

‘Live or pay rent’

Pablo Martinez is a prime example. In just over one year, the 44-year-old has gone from a successful and solvent engineer living in an upper-middle class neighborhood to barely having enough to live.


Since being made redundant in March 2019, he has been unable to find work.

During the first few months he used up his savings and unemployment insurance.


He started working as a driver for Uber, but work slowed when the protests broke out in October and dried up completely when the virus lockdown began.

“If before we were critical, now we’re practically paralyzed,” Martinez told AFP.

Whereas before he “lived relatively comfortably,” now he cannot afford to pay the rent.

“There’s living or paying the rent, I can’t do both.”

He and his wife have opened a shop selling personalized gifts, while he also gives guitar and piano lessons over the internet.

But it’s not enough, and he doesn’t qualify for state help.

Surveyor Rodrigo Acevedo, 44, is in the same situation.

After his job was suspended, he had to lean on the employment protection law that was created during the pandemic so that employees could access their unemployment insurance.


The first monthly payment was worth 70 percent of their salary, but that diminished progressively.

His $1,200 monthly salary meant he didn’t qualify for state aid, and he had to take his daughter out of a private college and enroll her in a public school.

“We had no other option,” he told AFP.

In Chile, there is a wide disparity in the level of public and private education and health care.

‘A drastic change’

Since 1990, Chile has dramatically reduced poverty from 40 to 9%, but the middle classes improved their lifestyles through credit.

Now, 70% of those families live with unsustainable levels of debt.

A study by the University of Chile found that the self-employed had been the worst affected by the pandemic, seeing their salaries fall by 60 percent.

“The fall in the wellbeing levels of the middle classes is going to be significant,” said Contreras. “Even if they don’t fall into poverty, it will be a drastic change: changing from the private to public health system, the children’s schools or liquidating assets.”

Life has already changed for Pedro Castro, 54, a successful exhibition businessman whose business fell victim to the pandemic.


To make ends meet, he’s rented out his comfortable home in the trendy Nunoa neighborhood of the capital and moved his family to a cabin on the outskirts of Santiago.

“You have to go out onto the streets again,” Castro, who now sells purified water, told AFP. “To live off cards, off savings, to sell some machines to make money and payments.”

Agence France-Presse

Japan's debt mountain: How is it sustainable?

Already the global leader in accumulating debt, Japan is adding nearly $2 trillion to its mountain this fiscal year with record stimulus packages to cushion the impact of coronavirus.

With debt levels around two and a half times the size of its economy, Japan manages to keep government bond yields ultra low and investor confidence high that it can avoid default.

- How did we get here? -

Whichever way you look at it, Japan's debt is unfathomably large. According to the Bank of Japan (BoJ), at the end of 2019, it stood at 1,328,000,000,000,000 yen.

This is equivalent to around $12.2 trillion, just over half the total amount of US debt in absolute terms but by far the biggest pile when measured against the size of even Japan's mighty economy (around 240 percent of gross domestic product).

Japan's debt began to swell in the 1990s when its finance and real estate bubble burst to disastrous effect.

With stimulus packages and a rapidly ageing population that pushes up healthcare and social security costs, Japan's debt first breached the 100-percent-of-GDP mark at the end of the 1990s.

It hit 200 percent in 2010 and is now around 240 percent of GDP, according to the International Monetary Fund.

On Wednesday, Japan's parliament agreed anti-coronavirus measures worth 117 trillion yen -- which is likely to push the GDP ratio well above 250 percent.

- Isn't this a problem? -

To finance this debt, the Japanese government issues bonds known as JGBs.

These are snapped up in enormous volumes by the BoJ, the country's central bank that is officially independent but in practice closely co-ordinates economic policy with the government.

As part of anti-virus measures, the bank has removed its self-imposed ceiling on buying JGBs, giving itself unlimited purchasing firepower. It holds more than half of all JGBs.

These purchases support the price of the JGBs in the debt market and keep the yield on the bonds low (prices and yields move in opposite directions).

This means that in effect, the government is being financed by the central bank at an ultra-low (or even negative) interest rate, making it more sustainable.

"The ultra-low rate conditions created by very much accommodative monetary policy by BoJ can be one of the reasons" that Japan's mountain is less problematic than for other high-debt countries around the world, said Takashi Miwa, an economist at Nomura bank.

- Who else buys Japan's debt? -

Risk-averse private and institutional investors also have a healthy appetite for JGBs because they see them as a safe place to put their money, burned by a history of stock market bubbles.

"A large portion of wealth is held by seniors who lack financial literacy and prioritise stability rather than return," said Shigeto Nagai, from Oxford Economics.

"With limited investment and lending opportunities domestically, banks, insurance companies and pension funds still need the JGB to place their vast amount of excess savings," Nagai told AFP.

The bonds are denominated in yen, still seen as a safe haven in troubled economic times and the proportion held by foreign institutions is very low -- making Japan less vulnerable to external pressure.

In fact, 90 percent of the debt is held by Japanese investors.

Another thing that keeps market confidence high: Japan is the world's biggest creditor, holding more than $3 trillion in net assets in foreign currency reserves and direct investment abroad.

- How high can you go? -

The growing mountain of debt means that, even with ultra-low interest rates, the amount Japan's government pays for repayments is its second-largest budget line.

The only way to avoid adding to the pile is to reduce budget deficits by boosting taxes or cutting public spending -- but this threatens to throttle growth in Japan's already recession-hit economy.

One drastic step could be to write off the debt held by the BoJ -- a step that would be an "accounting trick" with "no consequence" on the real economy, said Frederic Burguiere, an economist specialising in Asia.

"But this does not take into account the moral dimension of economic mechanisms... if we allow states not to repay their debts, what becomes the rules for private investors and the state itself?" asked Burguiere.

Agence France-Presse 

Wall Street tilts higher again on economic recovery hopes

NEW YORK (AP) — Wall Street’s rally is spilling into a new week as most stocks continue to ride the high supplied by Friday’s surprisingly encouraging report on the U.S. jobs market.

The S&P 500 was up 0.5% in midday trading on Monday, bringing it back within 5.3% of its record set in February, as optimism strengthens that the worst of the coronavirus-induced recession may have already passed. Stocks that would benefit most from an economy that’s growing again were rising the most, but pullbacks for a handful of big tech stalwarts were keeping the market’s overall gains in check.

The Dow Jones Industrial Average was up 248 points, or 0.9%, at 27,359, as of 11:53 a.m. Eastern time, and the Nasdaq composite was up 0.2%.

Stocks have been rising since late March, at first on relief after the Federal Reserve and Capitol Hill pledged to support the economy and more recently on hopes that the recovery may happen more quickly than forecast.

IMPACT ON THE ECONOMY:

– Survey: Business economists expect worst slump since 1940s
– BP to cut 10,000 jobs worldwide amid virus pandemic
– Left out: More workers now losing hope of getting back jobs

Such hopes got a huge boost Friday when the U.S. government said that employers added 2.5 million jobs to their payrolls last month. Economists were expecting to see 8 million more lost.

States across the country are slowly relaxing restrictions on businesses meant to slow the spread of the coronavirus outbreak, which is raising expectations that the economy can pull out of its coma. New York City began reopening on Monday, for example, allowing construction and “nonessential” retailers to start operating again with some restrictions.

That puts more pressure on economic reports this week to confirm that Friday’s jobs report was a true inflection point and not just an aberration.

Even if the economy did hit its bottom a month or two, economists warn that many risks are still looming over a very long road back to full recovery, such as a flareup in U.S.-China tensions. Critics are also still saying the stock market may have risen too quickly and may be setting investors up for disappointment, with the biggest risk being another wave of infections that leads to more lockdowns.

It’s still unclear whether the economy can recover anywhere near as quickly as the stock market, which has rallied sharply after earlier being down nearly 34% from its February record.

“There’s a lot of risk that businesses and the economy don’t recover as fast,” said Tom Martin, senior portfolio manager at Globalt Investments. “When money starts running out in July, are we enough on a path to getting people employed and businesses open?”

Among this week’s economic highlights are reports on inflation and the number of workers applying for jobless benefits. The headliner, though, is likely the Federal Reserve’s meeting on interest rates in the middle of the week.

Full Coverage: Financial markets
The Fed has already promised unprecedented amounts of support to keep markets running smoothly, but will the recent upturn in job growth mean it will pull back at all?

Treasury yields have been climbing in recent days, reflecting rising expectations in the market for the economy and inflation. The 10-year Treasury yield dipped to 0.86% from 0.90% late Friday, but it’s up sharply from 0.66% a week earlier.

Too quick a rise in yields could slow spending and the anticipated economic recovery, though. It can also be a heavy weight on the stock market.

Higher yields make bonds more attractive as investments, which would pull some investors’ dollars away from stocks. High-dividend stocks would likely get hurt in particular, because some income investors had turned to them instead of bonds when yields were lower.

Stocks that would benefit most from a growing economy, meanwhile, were leading the market on Monday to continue their recent trend.

Energy producers, banks and industrial companies were leading the S&P 500, and more than 70% of the stocks in the index were higher.

Travel-related stocks were again notable standouts as investors raised expectations for a reopening economy. Norwegian Cruise Line, Carnival, Alaska Air Group and United Airlines all rose more than 8.5%.

Smaller company stocks also climbed more than the rest of the market, which often happens when expectations for the economy are rising. The Russell 2000 index of small-cap stocks was up 1.4%.

But several titans were giving back a portion of their gains made earlier this year, when investors were piling into the few companies that could hold up in a weak, stay-at-home economy. Microsoft slipped 0.4%, Apple slipped 0.3% and Netflix lost 2.1%. These are some of the biggest companies in the market, which gives their movements more sway over the S&P 500 and other indexes.

In global markets, Japan’s Nikkei 225 index jumped 1.4% after the government reported the economy contracted at a 2.2% annual rate in the January-March quarter, better than the initially estimated minus 3.4%.

Indexes in other countries were more subdued. The Kospi in South Korea was up 0.1%, while the Hang Seng in Hong Kong was virtually flat.

France’s CAC 40 was down 0.4%, Germany’s DAX lost 0.2% and the FTSE 100 in London was down 0.2%.

Oil was down, even after major oil producing nations agreed over the weekend to extend a production cut of nearly 10 million barrels of oil a day through the end of July to counter the blow to demand from the coronavirus pandemic.

Oil had already climbed last week on anticipation of the move, and OPEC officials did not commit to extending the cuts past July or establishing a way to enforce the production limits.

U.S. crude for July delivery fell 3.6% to $38.13 per barrel. Brent crude, the international standard, fell 3.3% to $40.90 per barrel.

___

AP Business Writer Elaine Kurtenbach contributed.

The Associated Press

Venezuelan oil price falls below $10, lowest level in 20 years

The price of Venezuelan oil has fallen to below $10 a barrel -- its lowest level in more than two decades, the government said on Friday.

The oil ministry said the price between Monday and Friday was 70.62 Chinese yuan -- $9.90 a barrel -- a level that has not been seen since 1998 when it was $9.28.

Since 2017, the government of President Nicolas Maduro has announced its oil prices in yuan rather than dollars in protest over US sanctions.

The weekly price -- last year averaging $56.70 and at $61.41 in 2018 -- has fallen through the floor since the coronavirus pandemic began.

Oil prices have been sliding since 2014 and exacerbating the country's ongoing economic crisis that has pushed almost five million Venezuelans to leave the country, according to UN figures.

Venezuela is almost entirely dependent on its oil revenues, which account for around 96 percent of its income.

"It is an extremely extreme situation," oil expert Francisco Monaldi said this week in a meeting with the country's Foreign Press Association.

"Venezuela would normally need prices of more than $30 to make it attractive to continue drilling and pay royalties," he said.

"What we are experiencing is a kind of Armageddon."

Venezuela's oil production has fallen to around a quarter of its 2008 level.

Maduro's government blames that on US sanctions, including against state oil company PDVSA, but many analysts say the regime has failed to invest in or maintain infrastructure.

Although the South American country has the largest oil reserves in the world, the sector is a victim of corruption and lack of investment, according to analysts and the Venezuelan opposition.

Between 2004 and 2015, the country earned $750 billion from its oil exports, the price of which peaked in 2011 and 2012 with an annual barrel average of $101.06 and $103.42 respectively.

But now, the government is running the printing press to make up for the budget deficit -- and fueling runaway inflation.

Despite a national lockdown because of the coronavirus, protests have bubbled up across the country as people experience shortages of food and medical necessities.

Officials said several dozen people had demonstrated in Upata, a town of about 100,000 inhabitants, while seven people were injured Wednesday during protests -- that turned to looting -- in the eastern state of Sucre.

At least 10 people have died from COVID-19 in Venezuela, with just over 300 infections, according to a tally by Johns Hopkins University.

Agence France-Presse

Scared but desperate, Thai sex workers forced to the street

BANGKOK — A shutdown to contain the coronavirus has killed Thailand’s party scene and forced sex workers like Pim out of bars and onto desolate streets. She’s scared but desperately needs customers to pay her rent.

Red-light districts from Bangkok to Pattaya have gone quiet with night clubs and massage parlors closed and tourists blocked from entering the country.


That has left an estimated 300,000 sex workers out of a job, pressing some onto the streets where the risks are sharpened by the pandemic.

“I’m afraid of the virus but I need to find customers so I can pay for my room and food,” Pim, a 32-year-old transgender sex worker, told AFP in an area of Bangkok where previously bawdy neon-lit bars and brothels have gone dark.

Since Friday Thais have been under a 10 p.m. to 4 a.m. curfew. Bars and eat-in restaurants closed several days earlier.

Many of Bangkok’s sex workers had jobs in the relative safety of bars, working for tips and willing to go home with customers.

When their workplaces suddenly closed most returned home to wait out the crisis.

Others like Pim went to work on the streets.

The government said it is ready to enforce a 24-hour curfew if necessary to control a virus that has infected more than 2,000 people and killed 20, according to official figures.

Pim is paying a heavy price for the movement restrictions – she has not had a customer for 10 days and the bills are stacking up.

Her friend Alice, another transgender sex worker, has also been forced to move from a go-go bar to the roadside.

“I used to make decent money sometimes $300-600 a week,” Alice said.

“But when businesses shut down my income stopped too. We are doing this because we’re poor. If we can’t pay our hotel they will kick us out.”

High risk

The occasional tourist loiters near clusters of sex workers, before a furtive negotiation and a quick march to a nearby hotel, one of the few still open on Bangkok’s main tourist drag.

The already high risks of sex work have rocketed as the virus spreads.

Sex workers have flocked back to homes across the country in anticipation of several weeks of virtual lockdown before Thailand’s night economy comes back to life.

There were fears the malaise could last for months, yanking billions of tourist dollars from the economy and leaving those working in the informal sector destitute.

They include sex workers – an illegal but widely accepted part of Thailand’s nightlife.

There were concerns that a Thai government emergency scheme to give 5,000 baht ($150) to millions of newly jobless over the next three months will exclude sex workers because they cannot prove formal employment.

The Empower Foundation, an advocacy group for the kingdom’s sex workers, said entertainment venues make around $6.4 billion a year, many of them selling sex in some form.

Women are suffering the most from the virus measures, it said. Many are mothers and their family’s main income earner, forced into sex work by lack of opportunities or low graduate salaries.

The group has written an open letter to the government urging it to “find a way to provide assistance to all workers who have lost their earnings”.

As the 10 pm curfew looms, Pim and Alice prepared for a final forlorn patrol for customers.

“I think the government has been really slow. They don’t care about people like us who work in the sex industry,” Alice said.

“We’re more afraid of having nothing to eat than the virus.”

Agence France-Presse