The Day at a Glance | August 18 2020

The Top

· Republicans will present a new fiscal proposal to put an end to the political impasse.

· Economic indicators: Export (-21% annual, July) and import (-22.8%) data is expected to be published in Japan, along with API crude oil inventory figures.

Economic environment

Republican Senators are preparing a new fiscal proposal with more conciliatory elements to advance in the approval of aid because of the virus, according to some press reports. The proposal would be a less ambitious version of the $1 billion dollar package presented in July, and would include payments of $300 dollars per week to unemployed citizens, resources for small businesses, additional funding for the United States Postal Service and protecting businesses from lawsuits that could arise from COVID-19 infections. Support from Democrats is still unlikely and the Senate is not expected to vote in the immediate future as the upper house is in summer recess until the first week of September. The political impasse increases the risks of negative effects impacting the economy considering the fact that extraordinary unemployment aid has no longer been provided to keep private consumption afloat. According to recent estimates, a loss of 0.4% of GDP will occur for every month that a fiscal agreement is not passed.