U.S. daily cases top 60,000 for the first time, IEA warns on oil demand, and tariff tussle with France resurfaces. Rising deathsThe spike in Covid-19 cases in Sun Belt states shows no signs of easing, with deaths hitting a daily high in Texas and Florida. In Mississippi, the leaders of both legislative houses were among 26 lawmakers to test positive for the disease. President Donald Trump is set to visit Florida for a fundraiser today as the ongoing crisis takes a toll on his support. Outside the U.S., Hong Kong announced it will close schools again to help contain a new bout of cases while China said it had found the virus in samples of imported shrimp, raising questions over whether the pathogen can be spread through food. CaveatThe International Energy Agency said that demand for crude should rebound sharply over the next three months as economic activity resumes, while bloated stockpiles will diminish as OPEC and its allies persevere with production cuts. The forecast warned however that the outlook could be derailed by the upsurge in the virus. It seems oil traders are paying more attention to the warning than to the optimistic outlook, with a barrel of West Texas Intermediate for August delivery dropping as low as $38.54 in the wake of the report. TariffsThe long-running dispute between the U.S. and France over taxes on technology giants takes another move forward today with Washington set to announce details of tariffs on $500 million to $700 million of goods. The duties aren't expected to come into effect, though, until French authorities start collecting taxes on companies including Amazon.com Inc., Alphabet Inc.'s Google and Facebook Inc. It's not only tech companies caught in the crosshairs of geopolitics, global banks operating in Hong Kong face huge regulatory headaches as they try to follow China's new security law while staying on the right side of possible U.S. sanctions. Markets mixedThere's something of a mixed bag in global equities this morning, with Chinese shares turning lower, while virus fears continue to put a cap on U.S. futures. Overnight, the MSCI Asia Pacific Index dropped 1% while Japan's Topix index slumped 1.4%. In Europe the Stoxx 600 Index was 0.3% higher by 5:50 a.m. Eastern Time as tech shares rallied. S&P 500 futures pointed to a lower open, the 10-year Treasury yield was at 0.579% and gold rose. Coming up...The U.S. producer price index for June at 8:30 a.m. is expected to show a small recovery in the core measure. The Canadian June labor report is also at 8:30 a.m. The U.S. Department of Agriculture's WASDE report is at 12:00 p.m. and the Baker Hughes rig count is at 1:00 p.m. The first tropical storm warning for New York since Hurricane Sandy has been issued, with Fey expected to hit the city tomorrow. What we've been readingThis is what's caught our eye over the last 24 hours. And finally, here's what Emily's interested in this morningThe Fed's balance sheet has become one of the greatest preoccupations in financial markets. But as of this week, it looked a tiny bit less stupendous. Assets have dipped below $7 trillion for the first time in almost two months. The $88.3 billion drop in the week to July 8 was the fourth in a row -- taking the total decline over the last month to almost $250 billion. That past month's decline has owed mainly to the declining usage of the Fed's emergency services -- the repo and dollar swap facilities it rolled out for primary dealers and foreign central banks at the height of the market turmoil in March and April. Barring any more dramatic developments, the period to month end could well see a little more shaved off the Fed's ledger, as more than $110 billion of currency swap lines will mature. The major participating central banks, including the Bank of Japan and European Central Bank, have been allowing them to roll off as their local institutions are no longer clamoring for dollars.  This is part of the Fed's success story in stabilizing markets. It headed off a threatened dollar liquidity crunch, and it has effectively weaned dealers off its repo operations, having made them a tad more expensive last month. For the first time since September, the Fed this week could say it had no funds outstanding in these facilities -- a far cry from March, when the central bank offered as much as $5 trillion to put out the fire in funding markets. A drop of a couple of hundred billion and change in the Fed's balance sheet might not look like much here. But it's a bit of perspective for the bond market, which back in 2013 threw the mother of all tantrums when then-Chairman Ben Bernanke dropped a hint about slowing post-GFC asset purchases. The actual balance sheet taper is barely discernible here, extending from October 2017 to mid-2019. The next taper talk -- if it ever comes -- will be a doozy. Follow Bloomberg's Emily Barrett on Twitter at @notthatECB Like Bloomberg's Five Things? Subscribe for unlimited access to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. | 
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