The Day at a Glance | July 22 2020

The Top

· USA closed Chinese Consulate in Houston.

· No advancements regarding Brexit negotiations.

· More than half of businesses temporarily closed in the US because of COVID-19 have become permanent: Yelp Inc.

· Economic indicators: Mortgage applications once again increased last week in the US (4.1%) after recording the lowest rates in history; a 2.08 million contraction in crude oil inventories is expected in the US

· Republicans and the White House haven`t reached an agreement concerning a fiscal package; no agreement will be reached this week: Mitch McConnell.

· Japan will pay companies for leaving China; Mexican government in contact with US businesses for them to leave China and install operations in Mexico.

Economic environment

Tensions between the two economic powers once again escalated today, after the United States government gave China three days to close the Consulate in Houston, Texas. This is the greatest diplomatic discord between the two governments in decades. The US Department of State announced that it has made the request to protect intellectual property and US citizens` private data. This decision appears after the fact that, during Tuesday night, firemen and policemen received reports by witnesses that documents were being burned in containers outside of the building. China condemned the United States action and has threatened to react with firm measures if the US does not reverse its decision, according to statements made by the Ministry of Foreign Affairs spokesman, Wang Wenbin. It`s feared that China`s goal is to close the US consulate in Hong Kong or in Wuhan. The US Department of State suspects that China has increased its espionage operations and has interfered with its internal affairs for the last two years. China, for its part, has accused the US of harassing officials and intimidating students through the confiscation of personal electronic gadgets and unfounded arrests. Markets are staying relatively skeptic regarding a direct confrontation between both powers, as the economic recovery depends on the conservation of economic relations between the; which is something that is in both of these governments` best interests.