US capital enters loose lockdown
The Washington DC metropolitan area is entering a loose form of lockdown after authorities in the city, Maryland and Virginia issued stay-at-home orders on Monday.
Muriel Bowser, the mayor of the US capital, told residents to remain at home late on Monday afternoon following similar directives from the governors of the two states surrounding Washington DC.
“Staying at home is the best way to flatten the curve and protect yourself, your family, and our entire community from Covid-19,” she said in a statement.
Washington DC and the surrounding suburbs in Maryland and Virginia, known as the “DMV” area, are home to the majority of the US federal workforce.
Earlier on Monday, Larry Hogan, the governor of Maryland, said the number of cases in the DMV area had quadrupled in the past week to 2,709.
“A major outbreak among our critical federal workforce could be catastrophic,” he warned.
Virgin Australia seeks $860m government rescue package
Jamie Smyth in Sydney
Virgin Australia has sought a A$1.4bn ($862m) rescue package from the government to enable it to survive the collapse in passenger demand due to the coronavirus crisis.
The airline, which has Singapore Airlines, Etihad Airways, Richard Branson’s Virgin Group and China’s HNA Group on its share register, has suggested a government loan could be exchanged for equity in the carrier if it was not paid back within three years.
It told the government the rescue package could be part of a wider aviation industry package worth about A$5bn that would ensure Australia retained healthy competition in the aviation sector following the crisis, a source close to the discussions confirmed to the Financial Times.
Qantas has said it does not need any financial assistance and raised more than A$1bn last week from debt markets to bolster its balance sheet.
The requests for financial assistance are contained in a letter from Paul Scurrah, Virgin chief executive, to the government, which was first reported by the Australian newspaper.
A Virgin spokesman told the FT the airline has been in discussions with the government about the support the whole industry will need if this crisis is prolonged.
“The support we’ve proposed will be necessary for the industry if this crisis continues indefinitely, to protect jobs and ensure Australia retains a strong, competitive aviation and tourism sector once this crisis is over,” said the Virgin spokesman.
The government has already provided A$1bn in aid to the aviation sector since the crisis began and has yet not decided on whether to provide the additional support requested by Virgin.
News you might have missed
Trump touts new five-minute test as governors press for more screening Donald Trump boasted that the US had done more coronavirus tests than any other nation, just hours after several governors said their states faced serious problems because of insufficient testing. His comments came as Abbott Laboratories announced that it was launching a coronavirus test that could be completed in less than five minutes.
Cyprus imposes overnight curfew and doubles fine for violations Cyprus imposed a 9pm to 6am curfew on Monday for residents as it tightened restrictions on movement following a weekend spike in coronavirus cases reported on the Mediterranean island. From tomorrow people will only be allowed to leave their homes once a day, while the fine for violating lockdown rules has been doubled to €300, a government official said.
Greek prime minister donates half of salary to health service Greek prime minister Kyriakos Mitsotakis said he was donating 50 per cent of his salary over the next two months to help the country’s public health service curb the spread of coronavirus and urged other politicians to do the same.
Ford teams with GE Healthcare to produce 50,000 ventilators Ford aims to produce 50,000 ventilators within the next 100 days as it prepares to ramp production of a stripped-down model, becoming the latest industrial group to repurpose shuttered facilities to supply medical equipment.
Mexico to tap new Fed swap line with first auction on April 1 Mexico said it would tap a new $60bn swap line with the US Federal Reserve with a first auction of $5bn on April 1. On that day, the finance ministry is also expected to publish the general budgetary criteria for 2021 and revise its 2020 GDP forecast, which is currently for 2 per cent growth. The market now sees a contraction of as much as 7 per cent this year.
US-UK trade talks delayed amid coronavirus crisis The launch of trade talks between the US and UK has been indefinitely put on hold as the number of coronavirus cases continues to escalate sharply in both countries.
France reports its highest single-day death toll from virus France has reported its highest coronavirus death toll in 24 hours, with 418 patients dying in hospital to take the country’s total to 3,024.
Tanker rates surge on oil supply glut Rates to hire large oil tankers have jumped back above $200,000 a day as producers and energy traders scramble to secure vessels to either store or ship crude.
Asia-Pacific stocks track Wall Street higher
Asia-Pacific stocks gained on Tuesday following a positive lead on Wall Street as the number of new coronavirus cases in some hard-hit countries slowed.
Japan’s Topix nudged 0.2 per cent higher, the Kospi in South Korea was up 1.3 per cent and Australia’s S&P/ASX 200 rose 2.6 per cent.
Overnight on Wall Street, US benchmark S&P 500 ended the day 3.4 per cent higher as healthcare stocks climbed on expectations for new coronavirus tests and a potential vaccine. The $2tn emergency stimulus fund also helped soothe fears over the economic impact of the pandemic.
Futures tip the S&P 500 to open 0.4 per cent higher when US markets reopen.
China reports 48 new imported coronavirus cases
Health authorities in China have reported 48 new coronavirus cases to the end of Monday, all of which were imported cases. That takes the number of imported infections to 771. Overall, the number of confirmed coronavirus cases in China stands at 81,518.
Experts have highlighted the existence of unreported cases, particularly for patients that show no symptoms.
There was one new death linked to the virus on Monday, taking the number of fatalities in China to 3,305.
The number of people treated and discharged from hospital rose to 76,052.
S Korean industrial production posts biggest fall since 2008 crisis
By Edward White
South Korean factory production contracted in February at its quickest clip since the global financial crisis, hit by falling demand and production disruptions linked to coronavirus.
Industrial output in February fell 3.8 per cent from a month earlier on a seasonally-adjusted basis, marking the biggest fall since December 2008 and a worse result than analysts expected, according to Reuters data.
South Korea’s technology and industrial exporters have been under increasing pressure since the outbreak of the virus in Wuhan in January. Initial problems were caused by falling demand and supply shortages stemming from China’s sweeping shutdowns.
In February, factories across the South Korea were forced to temporarily halt production amid a rising number of workers falling ill, including at plants owned by Hyundai, the world’s fifth-largest carmaker, and Samsung, the world’s biggest producer of computer chips, smartphones and screens.
Now as the pandemic causes a slump in consumer demand across key developed markets for South Korean products, including the US and Europe, the groups are facing more uncertainty over whether anyone will buy their products.
The government in Seoul has rolled out record economic stimulus measures and jawboning of the financial markets in a bid to shore up the economy.
US government waives hospital rules to help tackle outbreak
by Hannah Kuchler
The US government is waiving many of the rules that govern hospitals, as it tries to give them flexibility to use new locations and rapidly hire staff during the coronavirus public health emergency.
Seema Verma, the administrator for the Center for Medicaid and Medicare Services, which sets rules for all hospitals and oversees government-backed insurance programmes, said the “unprecedented temporary relaxation in regulation” would help staff and providers.
The changes – dubbed ‘hospitals without walls’ – make it easier for hospitals to set up temporary locations, from doctors’ offices and urgent care centres, to student dormitories, hotels and gymnasiums.
To encourage telemedicine visits, where patients are treated remotely, Medicare will reimburse at the same rates as for in-person appointments.
As staff shortages loom, CMS is also allowing clinicians, including physician’s assistants, nurse practitioners and nurse anesthetists, to do more without a doctor’s supervision, if it does not break state law.
Amazon strike leader fired following walkout over coronavirus measures
Dave Lee in San Francisco
An Amazon worker has been fired after being among the leaders of a strike over an alleged lack of protection from coronavirus held at the company’s facilities in New York state on Monday.
“Today, I stood with my co-workers because conditions at JFK8 are legitimately dangerous for workers and the public,” Chris Smalls said in a statement distributed by Athena, a workers rights group. “Amazon thinks this might shut me up, but I’m going to keep speaking up.”
Amazon confirmed the sacking, but said it was over safety violations.
“Mr Smalls received multiple warnings for violating social distancing guidelines and putting the safety of others at risk,” a spokeswoman said. “He was also found to have had close contact with a diagnosed associate with a confirmed case of Covid-19 and was asked to remain home with pay for 14 days, which is a measure we’re taking at sites around the world.”
Speaking to CNBC, Mr Smalls called the explanation “ridiculous”. The number of those participating in the strike is under dispute, with organisers claiming more than 50 walked off the job, while Amazon suggested it was 15.
Elsewhere, workers for Instacart, the app-based grocery delivery service, said they too would stop working in protest at low rates of pay and what they feel is a lack of adequate safety measures.
Instacart said it had put in place new measures to keep its shoppers safe, and to support sick workers if they are diagnosed.
“Today, we saw 40 per cent more shoppers on the platform compared to the same day and time last week,” the company said. “Over the last 72 hours, more groceries were sold on our platform than ever before.”
China’s manufacturing sector expands as companies return to work
Ryan McMorrow reports from Beijing
China’s manufacturing sector rebounded to expand in March, government data showed on Tuesday, after falling sharply in February as work came to a halt in most of the country.
The official manufacturing purchasing managers’ index rose to 52.0 during the month, according to the National Bureau of Statistics, from 35.7 a month earlier.
The 50-point level separates contraction from expansion. The March reading came in well above economists’ forecasts of 45 compiled by Reuters.
After coming to a standstill because of domestic work stoppages, China’s manufacturers now face plummeting global demand as the coronavirus locks down economies across most of the world.
In a statement, China’s statistics bureau said the reading “reflects that more than half of the surveyed enterprises have resumed work and resumed production, better than last month, but it does not mean that China’s economic operation has returned to normal.”
South Korean schools move online as case numbers creep higher
By Edward White
South Korea is moving to nation-wide online school classes in April as the country struggles to fully stamp out the coronavirus.
Chung Sye-kyun, the prime minister, said that after repeated delays to the start of the new school year a decision had been made for students to begin online classes from April 9.
The move comes as health officials reported 125 new infections on Tuesday, up from 78 a day earlier and taking the total confirmed caseload to 9,786.
The daily infection rate has slowed sharply since peaking around 900 in late February but new clusters at churches, nursing homes and hospitals, as well as an increase in cases from overseas have frustrated containment efforts. The death of four people took the total death toll to 162.
The rate of recovered patients continues to outpace the infection rate, with 180 new recoveries taking the tally to 5,408.
Mexico extends ban on non-essential movement
Jude Webber in Mexico City
Mexico declared a health emergency and extended a ban on non-essential movement until April 30, but stopped short of taking steps to enforce stay-at-home advice.
The ban came as the country’s health ministry reported 1,094 confirmed cases and 28 dead, a rise of 101 cases since Sunday.
Hugo López-Gatell, health undersecretary ruled out any state of exception or curfew but appealed for solidarity. “We are in the phase of rapid ascent [of cases]. We must not waste this opportunity for drastic mitigation … we’re in time … We all have to do our bit,” he said.
From April 30, the health, economy and labour ministries will draw up plans for a staggered return to work, he told a news conference. He said that at the weekend just 30 per cent of Mexicans were staying at home, but the country’s vast informal sector makes it impossible for many who live from day to day to comply with the voluntary ban.
Previously, Mexico had announced a social distancing campaign until April 19.
Mexicans aged over 60 with chronic illnesses including diabetes or who are pregnant must not go to work, even if they work in sectors deemed essential, according to the government measures. Among prominent cases, the governor of the state of Querétaro joined the governors of Hidalgo and Tabasco in testing positive for the virus.
New York attorney general calls for investigation into Amazon firing
Dave Lee in San Francisco
New York’s Attorney General has called for an investigation into the sacking of Chris Smalls, an Amazon worker who helped organise a protest at the firm’s warehouse facility in Staten Island, New York.
Responding to reporting by the Financial Times, Attorney General Letitia James said the firing was “disgraceful”.
“In this midst of a pandemic,” she tweeted, “Chris Smalls & his colleagues bravely protested the lack of precautions that @amazon employed to protect them from #COVID19. Then he was fired. I’m considering all legal options & calling on the [National Labor Relations Board] to investigate.”
I'm considering all legal options & calling on the NLRB to investigate.
Amazon, this is disgraceful. https://t.co/Cgu09LmwHL
— NY AG James (@NewYorkStateAG) March 31, 2020
Amazon has said the firing of Mr Smalls was related to safety violations. “Mr. Smalls received multiple warnings for violating social distancing guidelines and putting the safety of others at risk,” the company said, adding that he had been told to stay at home, on full pay, due to close contact with a worker who later tested positive for Covid-19.
Coronavirus case confirmed at Samsung chip factory
By Edward White
Samsung Electronics has confirmed that an employee at one of its computer chip manufacturing facilities has tested positive for coronavirus.
Production at the factory, located near Giheung, south of Seoul, has continued but a group of staff who were in contact with the infected person are currently self-isolating, a Samsung spokesperson said.
Samsung is the world’s largest producer of computer chips, smartphones and displays. Analysts have warned that any substantial disruption to Samsung’s chip production could wreak havoc on the South Korean economy and the global technology supply chain.
According to a person familiar with the situation, the infected employee, who worked on a semiconductor foundry line producing system chips, was diagnosed on Monday. South Korean health officials are currently assessing how the employee became infected.
The case is the first infection confirmed at a Samsung chip plant and is a worry for the tech giant which has insisted for several months that its chip-making facilities were unlikely to see disruption because production was highly automated and the factory environments are already tightly controlled with strict sanitisation measures.
The event also follows several temporary factory closures at other Samsung factories, including facilities making smartphones.
Yuanfudao raises $1bn as demand for online education soars
By Mercedes Ruehl in Singapore and Primrose Riordan in Hong Kong
Yuanfudao, one of China’s largest online education companies, has raised $1bn from investors including Tencent and Hillhouse Capital.
The fundraising, which values the company at $7.8bn, underscores how the coronavirus outbreak has boosted Asian “edtech” start-ups as millions of students have been prevented from attending school.
Yuanfudao, which offers online education products for K-12 students, said it saw a ten-fold increase in users over the past two months compared to the same period last year. The company suffered a two-hour system crash last month after 5m people took up its offer of free live courses.
It is now recruiting 10,000 people to meet the new demand. A spokeswoman for the company said 5,000 of those jobs would be in Wuhan.
India’s biggest e-commerce businesses resume services in cities
Amy Kazmin in New Delhi
E-commerce companies in India, including Amazon and Walmart-owned Flipkart, have resumed services in many cities after suspending them last week.
On its website, Amazon says it has “resumed services in select cities,” and is first “serving existing orders”. The services were suspended last Wednesday, amid confusion over India’s 21-day lockdown measures.
Despite the resumption, e-commerce companies continue to wrestle with severe challenges ranging from a shortage of delivery workers to major disruption in the transport of goods from factories to cities.
Big Basket, an online grocery store backed by China’s Alibaba, said it too had restarted services in some cities but warned that “due to a massive backlog of orders and some operational constraints, you may not find delivery slots.”
Softbank-backed Grofers said it is looking to induct new workers to help it cope with a massive surge in orders.
In a tweet, Albinder Dhindsa, Grofers founder and CEO, appealed to other business owners with idle, available workers to help make them available to Grofers. “If your company has idling semi-skilled workforce that can do with more income + work in a safe environment please reach out,” he tweeted. “We are hiring in our warehouses to increase in all cities.”
Meanwhile, logistics industry representatives have warned that many trucks – including some stuffed with essential goods – have been left stranded on India’s highways, as panicked drivers have fled. The flight of many migrant workers back to villages has also hindered the unloading of trucks once they arrive at their destinations, as laborers are now simply not available.
Houseparty offers $1m reward to trace hacking rumours
Hannah Murphy in San Francisco
Newly popular video chat app Houseparty said on Monday that it was offering a $1m bounty for evidence that viral rumours that it had been hacked were in fact part of a “paid smear campaign”.
The Silicon Valley company, which has exploded in popularity in recent weeks among young people under government lockdown looking to chat and play games with friends, said in a tweet that it was “investigating indications that…recent hacking rumors were spread by a paid commercial smear campaign to harm Houseparty”.
It added that it would give a $1m bounty “for the first individual to provide proof of such a campaign”.
Earlier on Monday, some users had started complaining on social media that their PayPal, Netflix, and Spotify accounts were hacked, blaming Houseparty.
The company, which was acquired by Fortnite developer Epic Games last year, said that it had found no evidence of a breach.
Human rights group warns internet shutdowns could prove ‘deadly’
John Reed in Bangkok
The internet shutdowns imposed by authorities in India, Myanmar, Bangladesh, and other countries could prove “deadly” during the Covid-19 pandemic, and governments should lift them immediately, Human Rights Watch said on Tuesday.
“During this global health crisis, shutdowns directly harm peoples’ health and lives, and undermine efforts to bring the pandemic under control,” Deborah Brown, a researcher with the New York-based organisation said.
Access to timely and accurate information is crucial during a health crisis, the group said.
Internet shutdowns have become increasingly common during elections, anti-government protests, and armed conflicts. Myanmar’s government is blocking the internet for more than 1m people in Rakhine and Chin states, where its military is fighting against ethnic armed groups.
In neighbouring Bangladesh, an internet blackout and phone restrictions have been imposed at camps housing Rohingya refugees, which Human Rights Watch said was “hindering humanitarian groups from addressing the Covid-19 threat.”
India has had the most internet shutdowns of any country, according to the group, with at least 385 ordered since 2012.
China delays university entrance exam by 1 month
Christian Shepherd in Beijing
China has delayed its notoriously competitive university entrance exam by one month, as coronavirus has kept many schools across the country closed since January.
With the exception of Beijing and central Hubei province, high school seniors will now sit the nationwide exam known as the gaokao in July, giving students an additional month to prepare, China’s education ministry announced on Tuesday.
Dates for the exam to take place in Hubei, the province where the outbreak has been most severe, and the capital of Beijing will be announced at a later date, the ministry said.
Schools in more remote areas of China with fewer confirmed Covid-19 cases, such as Xinjiang and Qinghai in China’s northwest, have in recent weeks allowed exam-year students to return to class. Larger cities like Beijing and Shanghai have kept instruction online.
China’s college entrance exam, which was taken by over 10m students in 2019, is a national obsession. It is often considered the most challenging and nerve-wracking experience of a Chinese person’s life.
A student that scores top marks in the exam can secure a highly sought-after spot in one of China’s elite universities, bolstering prospects of finding a well-paid job, while low marks can mean a drastic narrowing of future prospects.
Chinese families have in recent years often protested any changes to the exam that are perceived to disadvantage their children.
Hong Kong Monetary Authority warns on loan portfolios
Primrose Riordan reports from Hong Kong
Hong Kong’s defacto central bank has said the territory’s banking sector needs to address how risks such as the virus outbreak could affect the asset quality of their loan portfolios.
The Hong Kong Monetary Authority said the city was vulnerable to the impact of a number of events apart from the pandemic, including the US-China trade tensions and the local political crisis which started last year.
“Banks should carefully assess how the possible intensification of these risk factors could impact the asset quality of their loan portfolios particularly when the levels of corporate leverage and household debt-servicing burdens have been rising,” the HKMA said in its March report.
The authority also said the unemployment rate could rise “even faster” than it did in Hong Kong during the 2003 SARS outbreak due to the higher percentage of workers in the tourism sector and the greater reliance of the retail sector on tourism.
Coronavirus risks pushing emerging Asian economies into recession
John Reed in Bangkok
Coronavirus will knock almost 4 percentage points off gross domestic product growth in emerging Asian economies this year in a best-case scenario, the World Bank has warned.
The disease risks pushing the region into recession, and could force up to 11m people into poverty, the bank said in a report on Tuesday.
In an unusually bleak update of its regular survey of developing Asia-Pacific economies, the Washington-based institution said that Asian countries “now face the prospect of a global financial shock and recession”.
“First this region was recovering from trade tensions, then it was struggling on its own with a viral disease, and now it faces the prospect of a third shock — an unprecedented [economic] shock, and it could increase poverty across the region,” Ergys Islamaj, a World Bank senior economist, said ahead of the report’s release.
Read more here
News you might have missed
Samsung Electronics confirmed that an employee at one of its computer chip manufacturing facilities has tested positive for coronavirus.
New York’s Attorney General called for an investigation into the sacking of Chris Smalls, an Amazon worker who helped organise a protest at the firm’s warehouse facility in Staten Island, New York.
China’s manufacturing sector rebounded to expand in March, government data showed on Tuesday, after falling sharply in February as work came to a halt in most of the country.
South Korean factory production contracted in February at its quickest rate since the global financial crisis, hit by falling demand and production disruptions linked to the impact of the coronavirus.
Newly popular video chat app Houseparty said on Monday that it was offering a $1m bounty for evidence that viral rumours that it had been hacked were in fact part of a “paid smear campaign”.
UK stocks poised for worst quarter since 1987
London’s benchmark stock index has shed a quarter of its value over the past three months, leaving it on track for its biggest dive in more than 30 years.
The FTSE 100 has dropped 26 per cent since the end of last year as of Monday’s closing level, the sharpest quarterly decline since the final quarter of 1987. The pan-European Stoxx 600 gauge has recorded a drop of a similar magnitude and is also set for its heaviest rout since the same three-month period in 1987.
“The first quarter of 2020 has undoubtedly been eventful with an initial stock market record that quickly turned into a bear market,” said Daniel Bergvall, economist at SEB.
Futures trading on Tuesday pointed to a tepid open for both indices as traders weigh whether intense stimulus measures from governments and central banks around the world will be sufficient to prop up the global economy.
A survey on China’s large manufacturing sector pointed to a stabilisation in March after a historic contraction in the previous month prompted by lockdowns across the country meant to halt the spread of Covid-19.
“The shape is almost a perfect V and offer a glimpse of hope that economic effect might be short lived,” said Mr Bergvall. He noted, however, that the survey “does not indicate that everything is normal, just that things are better than before.”
Corporate round-up: Galliford Try, Smiths Group
Here’s a round- up of companies reporting updates this morning:
Galliford Try: UK housebuilder has postponed its interim dividend and will consider paying it with the final one. It said it will not be providing guidance for financial years ending June 30 2020 and June 30 2021.
Smiths Group: The UK engineering group is withdrawing guidance for its fiscal year 2020. It is delaying the spinoff of its medical unit. It said: “Moreover, Smiths and Smiths Medical need to focus on navigating the external challenges – including the delivery of ventilators and other critical care devices. Therefore, the board has decided to delay separation until conditions improve. The intent to separate remains unchanged.”
Imperial Brands: The tobacco group announced a €3.5bn multi-currency revolving credit facility, which will be coordinated by NatWest, Santander and SMBC and is provided by a syndicate of 20 banks. It provides the business with committed bank financing until March 2023 and replaces the existing about £3bn facility.
Domino’s Pizza has appointed Dominic Paul as its chief executive, with effect from April 6. He will join the board on May 1.
Shell warns of ‘significant uncertainty’ on crude prices and demand
Anjli Raval in London
Royal Dutch Shell said it expects “significant uncertainty” on crude prices and oil demand as a result of the coronavirus outbreak.
The energy major said on Tuesday that “global developments” on oil supply – namely a Saudi Arabia-led price war – “have caused further volatility in commodity markets”.
The company, ahead of its first quarter earnings, said new oil price assumptions would lead to a post-tax impairment charge of $400m to $800m.
Shell noted it takes a $6bn cash flow hit for every $10 a barrel movement in the Brent crude price. Yet it warned this was mostly applicable “to smaller price changes than we currently witness”.
The company did not disclose its new price assumptions. Brent crude this week fell to its lowest since 2002.
Still, Shell said its liquidity remains strong and it had financial flexibility in the form of two new credit facilities. Together with cash of around $20bn, available liquidity will rise from $30bn to more than $40bn, it said.
Covid-19 concerns prompt Britons to stock up
Jonathan Eley in London
British consumers spent almost £2bn extra at supermarkets during the four weeks ending March 21, boosting their sales by a fifth.
“Total till roll” data from Nielsen, which measures spending on groceries and personal goods such as toiletries, showed that the week ending March 21 was the peak, with sales up 43 per cent.
It was during this week that buying switched from tinned and dried products to meat and poultry. Frozen food sales rose 84 per cent in the week, while the closure of pubs and restaurants drove alcohol sales 67 per cent higher.
Panic buying was the exception rather than the rule.
“Shoppers typically added just one extra item to their basket during each shopping trip,” it said. Average basket sizes rose just £1 to £16 over the four weeks.
But shoppers made an average of three additional trips in the same period, which added up to 79m extra visits to stores.
BA to halt flights in and out of London Gatwick
Tanya Powley in London
British Airways has stopped flying from Gatwick Airport and will consolidate its London flight operations at Terminal 5 from Heathrow Airport.
It comes as airlines are looking at ways to cut costs as they battle the industry’s worst crisis in decades.
BA’s last flight from Gatwick was on Monday and there will be no more flights from the London airport until May.
The airline temporarily closed its operations at London City airport last week.
Due to the considerable restrictions and challenging market environment, like many other airlines, we will temporarily suspend our flying schedule at Gatwick and London City, and have consolidated our operation at Heathrow.
We are contacting affected customers to discuss their options.
European markets gain ground
European markets opened with a bounce on Tuesday, as investors weighed upbeat data on China’s factory sector, which suggested the economy was reemerging from its paralysis and fuelling hopes of a similar rebound elsewhere once the crisis eases.
The benchmark Europe Stoxx 600 was up 1.4 per cent after the opening bell. The German Dax gained 1.9 per cent, while the French Cac 40 and London’s FTSE 100 gained 1.6 and 1.4 per cent, respectively.
US stocks also pointed towards positive moves when they open later in the day, with S&P 500 futures up 0.8 per cent.
India seals off New Delhi ghetto found to be spreading virus
Amy Kazmin in New Delhi
Indian authorities have sealed off a crowded Muslim ghetto in New Delhi, from which followers of an evangelical Muslim sect have carried coronavirus to many different parts of the country.
Police have established a strict cordon around Nizamuddin West, where the Tablighi Jammat – a powerful movement of Islamic proselytizers, who encourage Muslims to practice their faith more rigorously – has its large headquarters, which doubles as accommodation for hundreds of missionary volunteers.
Indian authorities say the Tablighi held a huge conference – with around 1,800 people, including some foreign preachers from Southeast Asia – in mid-March just days before India imposed a nationwide lockdown.
Volunteer preachers from across India came to Nizamuddin to participate in the conference. After returning to their homes, many have fallen ill, and infected others in their own communities. Cases ranging from Jammu and Kashmir in the north and Telangana in the South have been traced back to the conference.
Authorities have found that 24 people still living in the crowded Tablighi headquarters were confirmed as infected, with hundreds of others in the building and residents of the nearby areas also showing symptoms. Overnight, hundreds of people were bussed out of the crowded neighbourhood and taken to hospitals and other facilities for observation and testing.
Virus takes toll on mental health in Iran
Najmeh Bozorgmehr in Tehran
Iranian couples have been contacting Iran’s state mental health helpline three times more frequently than before the coronavirus outbreak, an official said on Tuesday.
“Under coronavirus conditions, we receive 4,000 telephone calls every day from 8am…over arguments such as hygiene issues or when one of the couples go out… or how to raise kids,” said Behzad Vahidnia, director general of psychological affairs. “Children react differently, demonstrating impulsive behaviours and hyperactivity which add to tensions in the families.”
Iran’s health ministry has urged couples to practice more patience during self-isolation as public concerns rise about the socio-economic consequences of Covid-19 which has so far claimed 2,757 lives in the country and inflicted heavy economic damage.
Iran’s vice-president for economic affairs, Mohammad Nahavandian, said on Monday that the spread of the respiratory illness could cause Gross National Product to fall by up to 15 per cent, if it is not curbed within a few months.
Ukraine changes law to meet IMF demands
Roman Olearchyk in Kyiv
Ukraine’s parliament has given citizens the right to sell farmland, meeting one of two conditions needed to unlock an $8bn IMF loan programme that will be key to stabilising the economy during the Covid-19 pandemic.
MPs voted for the legislation late Monday while wearing masks, protective eyewear and gloves. Citizens, from next summer, will be able to buy up to 100 hectares from plots given to villagers years ago.
Villagers were given the land in the 1990s, but a moratorium prohibited them from selling their land. With this law, they can sell their land to farmers who could group the smaller plots into bigger plots and farm more efficiently. The right to sell land gives villagers the opportunity to use the land as collateral for loans.
MPs on Monday preliminarily approved banking legislation, the other condition required for an IMF programme, which would open the door to additional multi-billion-dollar support from foreign backers including the EU, World Bank and European Bank for Reconstruction and Development.
Rate of new cases in Germany slows even as death toll rises
Tobias Buck in Berlin
Germany is slowing the rate of new coronavirus infections, while the number of fatalities has risen, figures suggest.
The country reported 4,615 new coronavirus cases in the past 24 hours, taking the number of confirmed infections to 61,913 since the start of the crisis, the latest data released by the Robert Koch Institute on Tuesday revealed.
This was the third day in a row that the number of new infections rose by less than 10 per cent. For much of last week, the growth rate was around 15 per cent and, before that, it was closer to 20 per cent.
The number of Covid-19 deaths jumped from 455 on Monday to 583 on Tuesday. That leaves Germany’s fatality rate substantially below that of other European countries.
Germany has had 66,885 coronavirus cases, and 645 deaths, shows Johns Hopkins University, which keeps a global tally of cases. The difference from Germany’s official count reflects delays in the flow of data from local health authorities to the Robert Koch Institute in Berlin.
Vietnam to impose two-week lockdown
John Reed – Bangkok
Vietnam will from midnight implement a 15-day national lockdown, under a directive issued by Prime Minister Nguyen Xuan Phuc on Tuesday.
Under mandatory social distancing rules, people will be required to maintain a distance of at least 2 meters from others, and allowed to leave home only to buy food or medicine or in an emergency.
Gatherings of more than two people will be prohibited except in public offices, schools and hospitals.
Vietnam’s communist government has taken aggressive steps to contain the disease since reporting its first cases in January. The country has recorded 204 Covid-19 infections and no deaths to date.
US posts biggest daily case rise of any country
Steve Bernard in London
The US has recorded the biggest daily rise in cases of any country since the coronavirus outbreak began in December, even as the rate slowed, as it added more than 20,000 cases on Monday.
Its daily rate of growth slowed to 14 per cent from 16 per cent on Sunday.
Worldwide 61,404 people were diagnosed with Covid-19, bringing the total to 786,876. The global death toll increased by 3,723, as coronavirus claimed 37,839 lives.
Italy recorded a significant drop in new cases, adding 4,050, the lowest rise for 13 days. Spain continues to struggle with the outbreak with the death toll rising by 913 to 7,716. It added 7,846 new cases after four days of falling daily numbers.
New recoveries rose by a record 14,075 on Monday, bringing the total number of people free from the virus to 165,387.
Aldi to ease purchase caps in UK stores
Jonathan Eley in London
Aldi said it is easing limits on most of the products in its UK stores in a further sign that retail food supplies are back to normal after a sudden spike in demand in the wake of the coronavirus outbreak.
The German-owned discounter, which has over 800 stores in the UK, was the first to limit items across all product lines.
It will continue to restrict shower gel, bleach, toilet and kitchen rolls, nappies, pasta, tinned tomatoes and beans, part-baked bread and alcohol to four items per customer.
Hand sanitiser, UHT milk and baby milk remains limited to two items per customer.
“While we would still encourage people to buy only what they need, product availability in store is good and the move will make it easier for people to shop for vulnerable people and those who are self-isolating,” it said.
Unemployment falls in Germany up to March 12
Martin Arnold in Frankfurt:
The number of unemployed people in Germany fell slightly over the past month, but the federal employment agency said its jobs data missed much of the impact from the coronavirus pandemic as it only measured up to March 12.
The agency said the number of unemployed people fell by 60,000 to 2.34m between February and March. After adjusting for seasonal fluctuations, it said the fall in jobless people was only 1,000 and the unemployment rate dropped from 5.3 to 5.1 per cent.
It warned that the shutdown of much of Germany’s economy to slow the spread of coronavirus would leave “clear traces in all areas of the economy”.
Most German companies have put hiring plans on hold and many of them are planning to lay off workers because of the coronavirus crisis, according to the Ifo institute in Munich which said last week that its employment barometer had fallen by a record amount from 98 in February to 93.4 in March, the lowest level in a decade.
But analysts are divided on how much the country’s short-term work subsidy scheme will cushion the blow. The German government has predicted that more than 2m workers will be put on Kurzarbeit, or shorter work-time, which allows companies to send workers home or radically reduce their hours while the state replaces a big chunk of their lost income.
The federal employment agency said on Tuesday that based on a preliminary estimate, there were 108,000 employees receiving short-term work allowances under the Kurzarbeit scheme in January, up from 89,000 in December and 42,000 a year ago.
Border restrictions hit Macau’s gambling sector
Primrose Riordan in Hong Kong
Wynn Macau said the Chinese territory’s junket operators are likely to face liquidity problems as it reported a 19 per cent drop in net profit for 2019 to HK$5.06bn (US$650m) from HK$6.25bn the year before.
While casinos have re-opened, Macau and Hong Kong have introduced various border restrictions which have slowed the flow of gamblers into the city.
“These factors may cause gaming promoters to face a decrease in liquidity, limiting their ability to grant credit to their patrons, and difficulty in collecting credit they extend,” the casino operator said in a filing to the Hong Kong stock exchange.
Wynn Macau said its VIP gaming business had also decreased in 2019, and the total VIP table games turnover was down over 30 per cent from HK$931bn in 2018 to HK$637bn last year.
London’s gin distilleries switch to making hand sanitiser
Robert Wright in London
Three London-area gin distilleries are switching some of their production to ensure the capital’s police force has enough hand sanitiser for officers during the Covid-19 outbreak, the Metropolitan Police has said.
The force, the UK’s biggest police service, said on Tuesday that staff at its Commercial Services Department had recently started to look for alternative sources of hand sanitiser because of shortages and had contacted a number of distilleries and breweries about supplies.
The force said three operators – Portobello Road Gin of Notting Hill, 58 Gin Ltd of Haggerston and the Copper Rivet Distillery in Chatham – were now helping the force. The sanitiser was being made to a formulation by the World Health Organization. The force said another company approached – Budweiser Brewing Group – was donating 6,000 litres of its own supplies of hand sanitiser free of charge.
Mark Roberts, the Met’s director of commercial services, said hand sanitiser was an “essential item” for the force’s officers and staff.
“I am extremely grateful to all of the suppliers who have agreed to work with us and provide us with this vital commodity, which will help prevent the spread of Covid-19 and ultimately save lives,” Mr Roberts said.
ONS releases death figures for March
Chris Giles in London
The first sign that coronavirus is causing more people to die in England and Wales than the government has indicated was revealed in official figures on Tuesday.
In its weekly report into deaths in the two nations, the Office for National Statistics said that, by March 20, it had seen evidence of 210 deaths where Covid-19 was cited by an attending doctor as a potential factor compared with 170 people the Department of Health and Social Care recorded as dying in hospital from the virus.
The ONS said its number “is higher than the figures the [health department] publish as it includes deaths related to Covid-19 that took place outside of hospitals and those not tested for Covid-19”.
The 210 figure is likely to rise as more deaths are recorded and registered on national systems, a process which can take some time.
Retail sales slashed in Hong Kong
Primrose Riordan in Hong Kong
Retail sales in Hong Kong dropped by 44 per cent in February compared to the year before to HK$22.7bn (US$2.9bn) as the coronavirus outbreak ravaged the sector and people were forced to stay at home.
Comparing the first two months of the year with the same period the year before, sales of watches and clocks dropped by 58.6 per cent, clothing by 49.9 per cent, motor vehicles by 24.2 per cent and department store commodities by 41.4 per cent, according to estimates by Hong Kong’s statistics department.
But the department said supermarket sales increased by 11.1 per cent in the same period.
Russia reports largest daily rise in Covid-19 cases
Henry Foy in Moscow
Russia reported 500 new cases of coronavirus on Tuesday, its largest daily increase by far, as the total number of infections surged 27 per cent to 2,337.
Russia said the number of people who had died almost doubled overnight to 17. The country has fewer cases than other European states but has seen a major spike in infections over the past week, with cases roughly doubling every three days.
The government has called for a lockdown imposed on Moscow – allowing people to leave their homes only for essentials – to be spread across the country in a bid to stem the spread of the pandemic.
President Vladimir Putin on Monday ordered senior officials to make preparations “in all regions, taking into account all calculated options for the development of the [virus] situation based on the experience of other countries.”
Dubai to inject fresh capital into Emirates airline
Simeon Kerr in Dubai
Dubai pledged to support Emirates airline with financial assistance during this “critical period”.
The government, the carrier’s current shareholder, will inject new equity into the company, Sheikh Hamdan bin Mohammed Al Maktoum, the crown prince, said in a statement on Tuesday. Details will be released at a later stage.
Emirates, one of the world’s leading long-haul carriers, has like most airlines been hit hard by global restrictions on travel and reduced demand because of the coronavirus pandemic. Scheduled passenger flights from its home base in Dubai have been suspended. The airline has grounded much of its fleet and cut staff salaries.
The support has been made available to Emirates because of its strategic importance to the economies of Dubai and the United Arab Emirates and “the airline’s key role in positioning Dubai as a major international aviation hub,” he said.
Thailand outlaws April Fool’s Day coronavirus tricks
John Reed in Bangkok
Thailand on Tuesday warned that it would criminally prosecute anyone who claimed to have coronavirus as an April Fool’s Day prank.
The government’s PR department warned “scaremongers not to spread false news or rumours” in a post on its official Twitter account.
Thailand’s government said that violators would be prosecuted either under the country’s Computer Crime Act, which it uses to police the internet, or an emergency decree dating to 2005 that Prime Minister Prayuth Chan-ocha invoked last week to impose emergency rules in response to the Covid-19 pandemic.
“People around the world are suffering from #Covid19 outbreak, and that’s reason enough why people should be more considerate and not use this as a prank or a joke,” the government said.
Thailand on Tuesday reported 127 new coronavirus cases, bringing the total to 1,651 since the outbreak began, 10 of whom have died.
— PR Thai Government (@prdthailand) March 31, 2020
China to announce asymptomatic coronavirus cases from April
Christian Shepherd in Beijing
China will for the first time include asymptomatic coronavirus cases in its nationwide count, after experts criticised the government for leaving infections out from its official tally.
Starting from April 1, individuals who tested positive for Covid-19 but did not display symptoms would be announced daily, China’s national health commission said on Tuesday.
The commission added that a survey of asymptomatic cases will be carried out in areas heavily affected by the outbreak in order to improve containment measures.
1,541 asymptomatic individuals, 205 of whom arrived in China from overseas, had received medical attention from the beginning of the outbreak, it said.
The Chinese government’s refusal to publicly disclose cases that test positive but have no clinical symptoms has been a central concern of experts who doubt China’s claim to have “basically halted” transmission of the virus within the country.
In recent days, cases of newly confirmed asymptomatic cases have been reported in Gansu and Guangdong provinces, both brought to the regions from travellers leaving Hubei, the province most affected by the outbreak.
Eurozone inflation rate dives in March as virus disrupts economy
Martin Arnold in Frankfurt
Inflation slowed across the eurozone in March as energy prices plummeted and economic activity came to a standstill in many areas due to the disruption caused by coronavirus.
The fall in prices raises the spectre of deflation in many southern European countries despite the radical monetary easing measures recently launched by the European Central Bank.
Harmonised consumer prices in the 19 eurozone countries fell to 0.7 per cent in March, from 1.2 per cent in February, a flash estimate from Eurostat revealed on Tuesday. That matches a three-year low set in October 2019 and is lower than the 0.8 per cent increase in prices expected by economists who were polled by Reuters.
Energy prices fell 4.3 per cent in March, reflecting the drop in oil prices after Saudi Arabia started a price war with Russia. However, unprocessed food prices rose 3.5 per cent as many Europeans reacted to the spread of coronavirus by bulk-buying staples such as pasta, flour and rice.
Several countries are flirting with deflation after prices rose by only 0.1 per cent in Italy, Greece and Portugal and by 0.2 per cent in Spain.
Excluding the more volatile energy, food and tobacco prices, underlying eurozone inflation slowed from 1.2 per cent to 1 per cent. The slowing rate of price growth, which reverses a recent trend of rising prices, means the European Central Bank is moving further from its main objective for inflation to be below but close to 2 per cent.
Daytime is the new primetime in TV business
Anna Nicolaou in New York
As millions stay home worldwide due to the coronavirus pandemic, use of streaming services has soared during the morning and afternoon hours — typically a dead zone for television while consumers are at work.
Daytime viewing on streaming services jumped 39 per cent from March 9-23, according to analytics company Conviva. In contrast, streaming use declined 2 per cent over the same period in “primetime” — between 8pm and 10pm when TV networks traditionally air their best shows.
“As we all adjust to the new normal, streaming and social video have become even more important to many American households,” said Bill Demas, chief executive of Conviva, adding that the growth in daytime streaming was “surprising”.
The streaming frenzy has prompted Netflix, Amazon and YouTube to reduce their picture quality in Europe to ease pressure on broadband networks.
Europe secures medical supply line to Iran
Michael Peel in Brussels
European countries have arranged the export of medical goods to Iran, in the long-awaited first deal under a financial channel set up to shield trade from US sanctions.
The mechanism known as Instex created by Germany, France and the UK “successfully concluded its first transaction”, Germany’s foreign ministry tweeted on Tuesday, after the Europeans had grappled for 18 months with transatlantic political pressure and technical difficulties.
“#GoodNews (finally),” tweeted Federica Mogherini, the former EU foreign policy chief, who in September 2018 unveiled the plan to set up Instex, as part of the European response to US President Donald Trump’s decision to exit a landmark nuclear deal with Tehran.
It was not immediately clear what the value of the transaction was or whether the medical goods were directly related to the coronavirus pandemic.
Josep Borrell, Ms Mogherini’s successor, said last week that the EU would send €20m of coronavirus humanitarian aid to Iran and back Tehran’s request for IMF funding to fight the crisis.
12-year-old girl dies from coronavirus in Belgium as toll rises
Jim Brunsden in Brussels
The Belgian authorities have confirmed that a 12-year-old girl has died from coronavirus.
The death of a child from coronavirus is “very rare, but it is devastating for us”, said Emmanuel André, a scientist and spokesman for the Belgian government’s crisis centre. “We think in particular of her family and her close ones.”
Belgium’s death toll from the pandemic now stands at 705, an increase of 192 compared with yesterday’s data. The crisis centre said that close to half of the increase came from people who died before yesterday.
The centre said that the occupancy rate of intensive care beds in the country stood at 53 per cent.
Analysis: Police methods during lockdown raise liberty fears
Police in England were last week granted the right to levy fines of £60 for first offences against a range of regulations banning unnecessary travel and gatherings of more than two people in public.
The Home Office, when announcing the new powers said it expected forces — which enjoy substantial discretion in how they use their powers — to apply their “common sense and discretion”.
But some forces’ behaviour prompted Jonathan Sumption, a former Supreme Court justice, and others, to warn on Monday of the risk of a “police state”.
Robert Wright in London explores whether tough tactics used by the police puts the traditional consensual approach at risk.
Read the full story here
Italy pays steeper rate to issue first sovereign bonds this month
Tommy Stubbington in London
Italy paid the highest borrowing costs in eight months at its first bond sale since the intensification of the coronavirus crisis, as investors sought higher returns for added risk.
The Italian treasury raised €8.5bn — the maximum planned — across four different bonds, in the latest sign that European Central Bank’s massive debt purchases have stabilised a market which threatened to go into freefall two weeks ago.
The yield for the 10-year bond came in at 1.48 per cent, up from 1 per cent at the last sale at the end of February and the highest level since July last year.
“They have market access and auctions are working normally, and that’s encouraging,” said ING rates strategist Antoine Bouvet. “It’s more expensive for Italy to borrow now, but that takes a long time to feed through to their average funding costs.”
Virus spread picks up in Spain as death toll rises
Daniel Dombey in Madrid
Spain has reported a record 849 people have died in the past 24 hours after contracting coronavirus while the spread of the virus has picked up marginally after a deceleration in recent days.
In total 8,189 people have died, compared with 7,340 on Monday, government figures revealed on Tuesday. Overall, confirmed cases have increased 11 per cent to 94,417. This represents a rise on the previous daily rate of increase of 8 per cent, but is still well down on this month’s highs of 25 per cent and more.
The figures showed that 19,259 people have recovered to date and 5,607 have needed attention in intensive care.
Spain is under a two-week-old lockdown, which was intensified this week with a ban on all work deemed to be “non-essential”, in an attempt to bring down transmission of the virus and relieve stress on intensive care.
UK law firm asks partners for cash to shore up balance sheet
Kate Beioley in London
Law firm Allen & Overy, one of the UK’s elite “magic circle”, has called on its partners to inject capital to the business in order to shore up its balance sheet and mitigate against the impact of coronavirus.
It is the latest firm to take action to guard against a drop-off in earnings and the risk of clients paying late due to the toll the virus is taking on business. The news was first reported by Legal Week.
On Tuesday Allen & Overy, which turned over £1.6bn last year, said it was asking partners to contribute cash to the business and was altering the timescale for paying out profits to partners.
In a statement, A&O said it would also be “deferring certain investments and recruitment”, cancelling events and forgoing the next salary review expected in the first quarter of the next financial year. It said bonuses would still be awarded but paid between the normal payment date in July and October’s payroll.
Law firms tend to be thinly capitalised and are required to hold less cash on their balance sheets than banks and insurers, for example. Linklaters, Fieldfisher and Pinsent Masons are also considering whether to conserve cash by delaying equity payouts to partners.
A&O said it “retains good diversification across practices and one of the broadest international offerings among the global elite firms, so we are confident in our resilience if economic conditions worsen.”
Switzerland’s ABB begins testing employees for Covid-19
Sam Jones in Zurich
Swiss engineering group ABB has begun proactively testing its own employees for coronavirus – breaking with government guidance that only those suffering from severe symptoms of the disease should seek a formal diagnosis.
The company, which employs more than 144,000 worldwide, has secured the services of a private laboratory in Switzerland to test employees, who can be swabbed at work, and receive results by text message.
Though the Swiss government has pursued one of the most aggressive testing policies in Europe, relative to its population size, officials still say testing kits are in short supply and should only be used with great discretion.
Bern’s Federal Office of Public Health issued guidance to cantons last week stipulating testing should be conducted only on those with “severe symptoms” or those in high risk categories.
ABB’s move underscores the extent to which governments around the world find themselves increasingly challenged in their capacity and status as protectors of public health, with the pandemic ravaging economies and depleting the medical resources of many states.
Iran tightens distancing orders ahead of national holiday
Najmeh Bozorgmehr in Tehran
Iran has warned people ahead of its traditional picnic day — celebrated for thousands of years — that any gatherings on Wednesday will be seriously dealt with.
The government of Hassan Rouhani has urged people to practice social distancing, which has been tightened with the closure of parks and main roads to prevent any celebration on the last day of the Persian New Year holidays when people spend time outdoors.
Officials have warned that people who ignore official warnings could face prosecution.
Iran’s coronavirus death toll reached 2,898 on Tuesday, up from 2,757 on Monday, while 44,606 people tested positive for the disease.
Those who have died after drinking tainted alcohol, based on a mistaken assumption that drinking alcohol can kill Covid-19, reached 320. While tens of others are in intensive care units or have lost their sight.
In an Islamic country where consumption of alcohol is banned and is only available on the black market at high prices, poorer people have found industrial alcohol accessible and affordable.
Shipping groups make plea to help stranded mariners
Robert Wright in London
One consequence of halting most airline services, and tough new restrictions on entry and exit to many countries, has been a near-ending of the normal process of changeover of ships’ crews.
Since around 100,000 seafarers every month go on and off vessels at the beginning and end of their tours of duty, there are now tens of thousands of mariners stuck on vessels after the scheduled end of their contracts – and tens of thousands more unable to start work on vessels.
Shipping companies and ship managers are divided about the best approach, however.
Some shipping companies — including Denmark’s Maersk Line, operator of the world’s biggest container ship fleet — have decided the safest course is to keep the existing crews on vessels, to avoid the risks of importing Covid-19 to ships that are vital to keeping world trade flowing. Others have called for a carefully managed process of changeover that will allow fatigued crews to be relieved.
Read the full story here
Walmart to test employees for coronavirus symptoms
Walmart plans to introduce temperature checks for its staff across its retail chain stores in the US as part of its efforts to stall the spread of coronavirus.
The Arkansas-based company will begin taking the temperature of employees as they report for work at stores, clubs and other facilities, as well as asking them basic health questions.
“We are in the process of sending infrared thermometers to all locations over the next 1-2 weeks,” wrote John Furner, president and chief executive of Walmart US, and Kath McLay, president and chief executive of Sam’s Club, on the company blog.
Any associate with a temperature of 100 degrees will be sent home, asked to seek medical treatment if necessary, and told to not return to work until they are fever-free for at least 3 days.
The company issued guidance on the use of masks, which has been a contentious issue since the outbreak began as countries adopt different approaches.
“While the CDC [Centers for Disease Control and Prevention], Walmart, and other health officials do not recommend masks or gloves for healthy people who don’t ordinarily use them for their jobs, we will make them available — as supplies permit — for associates who want to wear them,” said Walmart,f which has almost 5,000 stores in the US.
The masks will begin arriving this week. They will not be N-95 respirators – which should be reserved for at-risk healthcare workers – they will be high-quality masks.
China factory orders rebound at record clip in March
China’s purchasing managers’ index rebounded at the fastest rate on record this month to rise to its third-highest figure in the past decade.
China’s manufacturing PMI and non-manufacturing PMI, which measure sentiment of business executives, rose above 50 in March, analysis by Renaissance Capital showed on Tuesday.
Charles Robertson, global chief economist at Renaissance Capital, wrote:
This is probably the most embarrassing statistic for the West that China could possibly release. Not only did China stop the virus with just 3,309 deaths, they also appear to have done it with just a one month shutdown of the economy.
“It’s not all roses,” he added.
The new export orders are still so low that normally I’d be yelling from the rooftops about a global recession. But even here the rebound is incredibly good.
Economists caution against getting carried away about what China’s PMI figures show.
“That improvement could be brief as these are month-on-month comparisons for survey respondents,” said Iris Pang, ING chief economist for Greater China.
Dubai’s Al Ras district begins two-week lockdown
Simeon Kerr in Dubai
Dubai’s Al Ras district will be be locked down for two weeks from Tuesday.
The densely populated area will be closed off while it is disinfected as part of the attempts to protect the country against the spread of coronavirus, Dubai’s supreme committee for crisis and disaster management said.
The emirate’s health department will provide essential supplies to residents during this two-week period. Non-residents will not be allowed to enter the area, which is located on the Deira side of the city’s creek and is home to the city’s historic souq.
A night-time curfew remains in place across the rest of the United Arab Emirates until Sunday, with only key workers allowed to leave home between 8pm-6am.
UK senior ministers meet entirely via video conference
Sebastian Payne in London
Senior UK ministers for the first time met entirely through video conferencing at their weekly cabinet gathering on Tuesday.
Only Mark Sedwill, the cabinet secretary and head of the civil service, and a small number of other officials were present in the Downing Street cabinet room (observing social distancing, No10 stressed).
Chris Whitty, chief medical officer who is in self-isolation, and Patrick Vallance, chief scientific officer, updated the government on the spread of Covid-19 in the UK.
Ministers discussed efforts to support the National Health Service, improve the UK’s testing rate and attempts to repatriate Britons overseas.
The rising death toll “showed the vital importance of the public continuing to stick to the social distancing guidance which has been put in place by the government, based on scientific and medical advice”, Boris Johnson told the cabinet on Tuesday.
“The situation is going to get worse before it gets better – but it will get better,” the prime minister said.
Poland imposes two-week shutdown on hotels and public places
James Shotter in Warsaw
Poland has ordered hotels and public places to close for at least two weeks, as it ratchets up efforts to contain the spread of coronavirus.
The rules, in force from midnight Tuesday, will ban people from visiting beaches, parks and other green spaces, as well as from using rental bike schemes, the prime minister said.
“We want at all costs to avoid what has happened in western Europe. We want to flatten the curve of infections, and at the same time not have to choose which patients [to treat],” Mateusz Morawiecki told an online news briefing.
Either the situation will be dramatic, or it will be longer-lasting, but easier to control. We can’t afford to relax.
The few shops still open will have be restricted, limiting the number of those inside to three per cash till. Elderly shoppers will have a specific two-hour daily slot until midday.
Other Polish measures to stem the spread of the virus include a ban on international travel and gatherings of more than two people as well as closing non-essential shops.
Poland has recorded 2,132 cases of the novel virus and 31 deaths.
US, Canada and UK start to send citizens home from India
Amy Kazmin in New Delhi
Western governments, including the US, Canada and the UK, have begun to organise evacuation flights to help their citizens stranded in India, after New Delhi suspended inbound passenger flights to staunch the import of coronavirus.
Tens of thousands of foreigners – many of them short-term holiday-makers – were caught out when India decided on March 19 that it would not permit any more incoming passenger flights to land after March 22 and cancelled nearly all outbound too.
Western governments have been working to organise charter flights to help some of their stranded citizens leave India and go home. On its website, the US Embassy in New Delhi said that it anticipated “several” flights would leave from New Delhi and Mumbai for the US this week.
The Canadian government has said four flights will leave Delhi starting on Saturday, and two flights from Mumbai. One-way tickets to Canada would cost around $2,900 per person, Ottawa said.
European governments have chartered a flight to help their stranded citizens leave the coastal state of Goa, where authorities have been so strict in enforcing the curfew that local residents complain they are unable to access food.
Britain, which has announced a worldwide partnership with airlines to help stranded nationals, says it will announce timings for flights for its citizens in India soon.
UK ‘exceptionally’ revises its plan for bond sales in April
Tommy Stubbington in London
The UK government announced £45bn of bond sales in April in an “exceptional revision” to its plans as it ramps up its borrowing to fund its response to the coronavirus crisis.
The UK Debt Management Office will carry out four auctions a week throughout the month. At the time of the Budget three weeks ago the DMO had pencilled in £156bn of gilt sales for the 2020-21 financial year as a whole.
Yields edged up slightly following the announcement, but remain close to record lows, suggesting investors are relaxed about the flood of new debt. The Bank of England has provided a backstop for markets since announcing £200bn of bond purchases two weeks ago.
The increase will be funded by bonds of all maturities, the DMO said on Tuesday, a contrast to the surge in issuance during the 2008-9 financial crisis which was concentrated in short-dated bonds.
“Locking in such low borrowing costs for so long makes good sense ahead of a number of years of historically very high sovereign issuance and borrowing,” said UBS strategist John Wraith.
Northern Ireland introduces three-month business rate ‘holiday’
Arthur Beesley in Dublin
Northern Ireland’s devolved government has frozen domestic rates and introduced a three-month business rates “holiday” in response to coronavirus after receiving £912m in additional funding from London to tackle the pandemic.
Conor Murphy of Sinn Féin, the finance minister, introduced the measures as he unveiled a £13.8bn budget package for the region, the first since the powersharing executive with the Democratic Unionists was restored in January after a three-year suspension that followed a spending scandal.
Business rates are a kind of property tax levied on most companies, while domestic rates apply to households.
In a six-minute budget speech on Tuesday to the regional assembly at Stormont outside Belfast, Mr Murphy said protecting lives and livelihoods from the pandemic was now the executive’s top priority. “There is no doubt that we remain in a challenging financial environment,” he said.
Some £100m of the special Covid-19 funding will pay for the business rates break, while the remaining £812m goes into allocations separate to the annual budget because of procedural issues.
The overall £12.2bn allocation for day-to-day current spending is 8 per cent higher than one year ago, the biggest annual rise for more than a decade, with a further £1.6bn set aside for capital projects.
Sub-Saharan Africa faces extreme shortage of life-saving equipment
Neil Munshi in Lagos
There are just three ventilators in the Central African Republic, a country of almost 5m people, according to the Norwegian Refugee Council, highlighting the extreme dearth of life-saving equipment in sub-Saharan Africa as the coronavirus pandemic ramps up in some of the poorest countries in the world.
“Covid-19 has the potential to tear through the Central African Republic at lightning speed if the country doesn’t get the support it needs to adequately protect itself against the virus,” David Manan, NRC’s country director for CAR, said in a statement.
“This could be replicated across the world’s poorest countries, where health infrastructure is virtually non-existent,” he added.
CAR has confirmed six cases of coronavirus so far, but like many African countries it has very limited testing capacity. The country is one of the world’s poorest and depends heavily on foreign aid to assist the more than 700,000 people who have been displaced by conflict.
The NRC and other humanitarian organisations have warned of the danger of massive outbreaks in crowded displacement camps in the violence-wracked western Sahel and other parts of Africa, where social distancing is impossible, water is rationed and sanitation is poor.
There were nearly 5,300 confirmed coronavirus cases across Africa as of Tuesday morning, according to the Africa Centres for Disease Control
Medics returning to work targeted by tax avoidance schemes
Emma Agyemang in London
Thousands of medics returning to the NHS are being targeting by unscrupulous tax avoidance schemes, authorities have warned.
HM Revenue & Customs issued an alert on Tuesday urging NHS returnees not to fall for the avoidance schemes which falsely claim workers can keep 80 to 85 per cent of their income.
The tax office said it had seen various tactics used by the schemes, but all tended to use an umbrella company structure and sought to disguise the true level of pay individuals earned.
Around 20,000 previously retired healthcare workers have re-joined the NHS to fight the virus, the government announced yesterday.
A HMRC spokesperson said: “It is shocking that unscrupulous promoters of tax avoidance schemes are targeting returning NHS workers during this difficult time. We urge people to be very careful to not inadvertently sign up to such arrangements, as we consider them to be tax avoidance”.
Umbrella companies work by collecting a worker’s earnings from their hiring firm or recruitment agency and then paying it to them after deducting tax and national insurance. Many companies are legitimate, but the industry is unregulated and includes hundreds of firms claiming to be umbrellas, but which are in practice fronts for tax avoidance schemes.
Fed sets up scheme to meet booming demand for dollars
James Politi and Brendan Greeley in Washington and Colby Smith in New York
The Federal Reserve has taken a step towards meeting the global demand for dollars, setting up a facility that would allow central banks and international monetary authorities to enter into repurchase agreements with the US central bank.
The Fed said the facility will work in tandem with the dollar swap lines already established by the central bank with its peers across 14 different countries in order to ease a global shortage of dollars resulting from the greenback’s surging value versus most other currencies.
“This facility should help support the smooth functioning of the US Treasury market by providing an alternative temporary source of US dollars other than sales of securities in the open market,” the Fed said in a statement on Tuesday.
EU seeks ways to unite bloc over economic response to pandemic
Sam Fleming and Jim Brunsden in Brussels
Brussels is set to propose a pan-European unemployment reinsurance scheme as part of measures aimed at increasing the EU’s joint response to the pandemic.
The European Commission is working on plans to raise funds for an €80-€100bn scheme aimed at supporting countries that are confronted by increasing jobless claims as a result of the coronavirus pandemic, according to EU officials and diplomats.
The idea is being mooted as part of a set of support measures that will be discussed by eurozone finance ministers on Tuesday next week.
Brussels’ intention is for finance ministers at the Eurogroup meeting to back the plan along with other measures in the pipeline such as the granting of precautionary credit lines by the euro area’s bailout fund, the European Stability Mechanism. Ministers will discuss plans to bolster the European Investment Bank’s role in fighting the crisis.
Brussels is seeking ways to bridge the political gulf that has opened up between national capitals in recent days over what kind of joint economic response is required at EU level.
Next week’s finance ministers’ meeting will be key as Europe seeks to forge a common response to the economic crunch triggered by the pandemic.
Turkey to accelerate bond purchases to help stimulate economy
Laura Pitel in Ankara
Turkey’s central bank plans to speed up a bond-buying programme in the latest stimulus measure aimed at helping navigate the economic fallout from the coronavirus crisis.
The bank had a scheme to buy government bonds from Turkish commercial banks up to a limit of 5 per cent of its total assets — expected to be around 34bn ($5.2bn) — in 2020.
It said on Tuesday that these purchases would be carried out in a “front loaded manner” and that the previous limits could be revised, without providing further details.
The move will effectively allow the Turkish Treasury to raise funds without worrying about soaring costs of borrowing from international financial markets, said Haluk Burumcekci, an Istanbul-based economist and consultant.
“It means that there will be room for the Treasury to sell more bonds to the market. Because every primary dealer knows that they can sell to the central bank after buying from the Treasury.”
The central bank added it would buy government securities sold to Turkish banks by the country’s unemployment fund, enabling it to raise extra cash.
That scheme would be “out of the scope of the limits” set out for the open market operations portfolio, it said, raising the prospect of unlimited funding for the fund as Turkey confronts the prospect of a sharp rise in unemployment due to the lockdown.
“In essence this is similar to QE operations of big central banks. But we don’t know the targeted total size right now. It’s open ended,” Mr Burumcekci said.
Half a million German workers register for wage subsidies
Martin Arnold in Frankfurt
The number of German workers applying for government wage subsidies has surged close to 500,000 in the past month, underlining how the coronavirus pandemic has brought swaths of Europe’s largest economy to a standstill.
Germany’s Federal Labour Office said the vast increase in applications came from “almost all industries” with many workers in the retail, hotel and restaurant sectors rushing to apply for aid from Berlin under the so-called Kurzarbeit, or shorter work-time scheme.
The lockdown imposed on German households and businesses to slow the spread of coronavirus has forced many companies to close their doors.
Volkswagen, Daimler and Puma are among the companies applying for workers to be put on the scheme, which allows them to send workers home or radically reduce their hours while the state replaces a large chunk of their lost income.
Temporarily laid-off workers receive “Kurzarbeitergeld” or “short-work money” from the Federal Labour Office, which is also responsible for issuing unemployment benefits. The scheme promises them 60 per cent of their pre-crisis pay.
The German government has predicted that more than 2.35m workers will be put on Kurzarbeit, an even larger number than the 1.5m who benefited from the programme to help keep their jobs after the 2008 financial crisis.
In January there were 108,000 employees receiving the wage subsidy and last year there were an average of only 1,300 new applications for the scheme each month.
UK admits testing delays as it lags behind other nations
Jim Pickard in London
The British government has said it is unlikely to reach its target of 25,000 daily tests for coronavirus before late April.
Boris Johnson said on March 18 that the UK was closing in on the higher figure, telling the House of Commons: “We’re moving up to 25,000 a day.”
But a Downing Street spokesman said on Tuesday that the target would not be reached until “mid to late April”. On Monday the spokesman suggested that the figure could be reached by mid-April.
The UK is lagging behind other countries such as Germany, which is testing 70,000 people daily.
Public Health England said on Monday that 8,278 tests were carried out on 4,908 people as of 9am on Sunday. This was down from 9,114 tests at 9am on Saturday. More testing is seen as vital in checking whether health and social workers are free from the virus and can return to work.
The official said that Mr Johnson was seeking daily updates and wanted to see as many tests as possible before long.
He conceded that one reason for the delay was a lack of certain chemicals, re-agents and swabs.
Meanwhile, Downing Street played down comments from transport secretary Grant Shapps that households should only be shopping once a week: “The guidance is…you should be shopping for basic necessities for example food and medicines, as infrequently as possible,” the spokesman said.
Oil price collapse will shrink output by a tenth by June, study shows
Derek Brower in London
Oil companies will by June stop producing up to 10m barrels a day, the equivalent of Saudi Arabia’s output last month, as storage facilities fill up and production from weak companies starts to drop in the face of collapsing demand and crude prices, a report shows.
US oil production will drop by more than 4m b/d by the end of 2021, IHS Markit added.
“If there is no international agreement to curtail oil production then brutal unadulterated market forces will bring the oil market into balance,” said Jim Burkhard, head of oil markets at the consultancy. “The laws of supply and demand are fierce in extreme conditions.”
Upstream activity is starting to seize up in North America.
Global oil demand in the second quarter would be 16.4m b/d less than a year ago, IHS Markit said, predicting that the drop in April will be 20m b/d — a fifth of total global consumption last year.
The price of Brent crude, trading at just over $23 a barrel on Tuesday in London, will fall to $10/b during April, it forecast.
Doctor who met Putin tests positive for coronavirus
Henry Foy in Moscow
The head of Russia’s main hospital for treating coronavirus patients has tested positive for Covid-19, a week after he met with president Vladimir Putin.
Denis Protsenko, who is the head physician of the Kommunarka hospital outside of Moscow, is infected with the virus, state-owned newswire RIA Novosti reported on Tuesday.
Last Tuesday, Mr Protsenko showed Mr Putin around the hospital, and photos showed the two men shaking hands, talking, posing next to each other for photographs and standing together in a small elevator.
Mr Putin’s spokesman has said that Mr Putin is tested regularly, and everyone who comes into contact with him is screened before their meeting.
Wall St opens lower with markets on track for worst quarter since 2008
US stocks fell at the open on Tuesday leaving the S&P 500 on track for its worst quarterly performance since the financial crisis.
The S&P 500 opened 0.4 per cent lower and was down more that 19 per cent in the first three months of the year — its biggest quarterly decline since December 2008.
Meanwhile, the Nasdaq Composite opened 0.4 per cent lower and was down nearly 14 per cent for the quarter.
Markets have stabilised in recent days after fears about the economic fallout from the coronavirus pandemic drove bouts of volatility that saw Wall Street suffer its quickest fall into bear market territory on record.
However, efforts by central banks and governments around the world, including a $2tn US stimulus package, to cushion from the blow helped calm investor nerves.
Singapore to punish companies that do not implement home working
Stefania Palma in Singapore
Singapore has said it is now an offence for companies not to implement working from home if they are able to do so, as the city state faces a jump in locally transmitted cases.
Companies that do not make “a serious enough effort” to roll out telecommuting will face punishments including orders to stop working or fines, based on their specific circumstances, said Josephine Teo, minister of manpower.
Only about 40 per cent of companies in Singapore’s business district have staff working from home. “There is certainly scope to do more, especially for private sector firms,” said Ms Teo.
In assessing companies, the government will consider whether they were aware of the recommended distancing measures; if they tried to implement them; and if their enforcement went far enough.
The manpower ministry will increase the number of enforcement officers fivefold to more than 100 to implement the new rules. Singapore will also expand grants that help companies implement home working.
Global airline industry forecast to burn through $61bn of cash reserves
Tanya Powley in London
The global airline industry will burn through $61bn of its cash reserves during the second quarter of this year, according to the latest trade body forecast.
Iata, the industry trade body, on Tuesday warned that carriers are facing an “enormous cash problem”, pointing to an estimated $35bn of ticket refunds that are due in the second quarter alone because of cancelled flights. It estimates that the industry faces a net loss of $39bn in the three months to end of June.
The cash outlook comes just a week after Iata warned that the coronavirus pandemic would slash airline revenues by $250bn this year. Governments around the world have been launching rescue packages for the aviation industry, including the US stimulus bill that earmarked $58bn in loans and loan guarantees for US passenger airlines and cargo carriers.
Alexandre de Juniac, Iata’s director-general, said:
Airlines cannot cut costs fast enough to stay ahead of the impact of this crisis. We are looking at a devastating net loss of $39 billion in the second quarter. The impact of that on cash burn will be amplified by a $35 billion liability for potential ticket refunds. Without relief, the industry’s cash position could deteriorate by $61 billion in the second quarter.
Iata noted that some countries, such as Brazil, Canada, Colombia and the Netherlands, have relaxed regulations to allow airlines to offer passengers travel vouchers in place of cash refunds. Mr de Juniac said that this was a “vital time buffer” to help the sector deal with its cash problems.
German unemployment set to spike
Guy Chazan in Berlin
German officials expect a sharp uptick in unemployment as a consequence of the coronavirus crisis, despite efforts to avert mass lay-offs through an expansion of the government’s short-time work programme.
“Unemployment in Germany will increase for the first time in many years,” said Hubertus Heil, labour minister. “We have to be realistic … we can save a lot of jobs .. but we can’t protect each and every one.”
Detlef Scheele, head of the Federal Employment Agency, said the next set of unemployment statistics in April would likely show an uptick in joblessness of 150,000-200,000, adding that many of the lay-offs were in the hospitality and tourism sectors.
The agency’s latest figures, published on Tuesday, showed a slight drop in the number of unemployed people in Germany. But the data missed much of the impact of coronavirus as it only measured up to March 12. It said the number of people without a job fell by 60,000 to 2.34m between February and March.
Germany has sought to avert a big spike in unemployment through a big expansion of the “Kurzarbeit” or short-time work scheme. Under the programme, companies hit by a downturn can send their workers home, or radically reduce their hours, and the state will replace a large part of their lost income.
Science Group shares leap following ventilator order
Michael Pooler in London:
A small UK-listed company’s shares jumped by almost a third after revealing it had received a “letter of intent” from the government to make 10,000 ventilators to treat coronavirus patients.
Aim-quoted Science Group said on Tuesday that it was manufacturing 20 trial units of a device developed from scratch over the past month, which will be submitted for regulatory approval.
The research and development consultancy added that talks were underway with officials over a contract with an order expected once the green light is received.
As countries around the world scramble to source the life-saving machines, the UK government has placed a number of orders, including for a batch of 10,000 ventilators designed by the vacuum cleaner maker Dyson, which are also subject to regulatory testing.
Shares in Science Group were up 15 per cent in afternoon trading at 212p.
Virus claims 367 more lives in England, figures reveal
Bethan Staton in London
In England 367 more people, who tested positive for coronavirus, have died over the past 24 hours, bringing the total of confirmed reported deaths to 1,651.
Twenty eight of these patients (aged between 19 and 91-years-old) did not have underlying health conditions, NHS England said on Tuesday. The rise in deaths of 367 in the last 24 hours is the largest daily increase seen so far in the UK.
The number of confirmed coronavirus cases in the UK has risen by more than 3,000 to 25,150, according to the Department for Health, and 1,789 people have died from the disease. Figures released previously by the Office for National Statistics suggested the number of actual deaths from coronavirus may be higher than those the government records.
A total of 143,186 people have so far been tested for coronavirus, and though the government has increased testing rates, it is yet to hit the target of 10,000 a day which it set more than a week ago.
Glencore mulls paying $2.6bn dividend as it strives to limit debt
Neil Hume in London
Glencore will decide later this year whether to pay a $2.6bn dividend because of the risk that production could be hit by measures to contain the coronavirus outbreak.
In order to keep net debt between $14bn and $17bn and retain a prized investment grade credit rating, the Swiss-based miner and commodity trader said on Tuesday it was “prudent” to defer a decision on a proposed 20 cents a share payment until its interim results in August.
“As well as prioritising the health and wellbeing of our people, their families and our communities, we are taking a cautious approach to protect our capital structure amid the current period of extreme uncertainty,” said Glencore chairman Tony Hayward in a statement.
“Therefore, notwithstanding that Glencore continues to generate material levels of positive free cash in the current environment, the board considers it prudent to defer the distribution decision We will review the opportunity for a distribution at our August results, when we will have an improved understanding of COVID-19’s impact on our business and its prospects.”
US Midwest factory activity shrinks at slower rate than forecast
A gauge of factory activity in the Midwest fell less than feared in March even as the coronavirus pandemic began to take its toll on the US economy.
The Chicago Purchasing Managers Index slid to 47.8 last month, down from 49 in February, but exceeded economists’ expectations for a decline to 40. A reading below 50 indicates contraction and this marked the ninth consecutive sub-50 reading for the index.
Production and new orders indices saw monthly declines, but some firms reported an uptick in orders as customers stockpiled. Meanwhile, employment ticked up after having slipped in February.
The data comes after a gauge of activity in Texas’ manufacturing sector plummeted in March.
“The Chicago PMI can be considerably more volatile than the national Institute for Supply Management manufacturing index, and therefore today’s report may well have no bearing on the far more important ISM measure which will be released tomorrow,” Joshua Shapiro, economist at MFR, said.
The Chicago PMI survey ran from March 2 to 16.
UK to extend visas of overseas health workers
Robert Wright in London
The UK has set out a comprehensive package of measures to help overseas health workers in the UK to remain to fight the Covid-19 outbreak, including an automatic, fee-free extension to visas close to their expiry date.
The extension for staff with visas expiring before October 1 would help around 2,800 doctors, nurses and paramedics, the Home Office said on Tuesday.
The National Health Service has depended in recent years on the arrival of doctors, nurses and other staff from beyond Europe. NHS staff have taken around 40 per cent of the 20,700 Tier 2 visas for skilled migrants coming from outside the European Economic Area – the EU plus Norway, Iceland and Liechtenstein.
The Home Office said the visa extension, which would also apply to NHS staff’s family members, would give them “peace of mind” to focus on the battle against coronavirus.
The department plans to lift restrictions on the hours that overseas student doctors and nurses could work in hospitals. It will also allow overseas nurses due to undertake skills tests to postpone the exams and continue working.
Doctors, nurses and paramedics from all over the world are playing a “leading role” in the NHS’s efforts to tackle coronavirus, the home secretary said.
“We owe them a great deal of gratitude for all that they do,” Priti Patel said. “I don’t want them distracted by the visa process. That is why I have automatically extended their visas – free of charge – for a further year.”
US consumer confidence gauge falls to lowest since 2017
A gauge of US consumer sentiment fell to its lowest level in more than two years as the coronavirus pandemic intensified and markets tumbled.
The Conference Board’s consumer confidence index fell to 120 in March, from 132.6 the previous month, but exceeded economists’ expectations for a drop to 110. That was the weakest reading since July 2017.
“The intensification of Covid-19 and extreme volatility in the financial markets have increased uncertainty about the outlook for the economy and jobs,” said Lynn Franco, senior director of economic indicators at the Conference Board.
“March’s decline in confidence is more in line with a severe contraction – rather than a temporary shock – and further declines are sure to follow,” she added.
The cutoff for the survey results was March 19.
Cambridge University offers ‘safety net’ for final year students
Andrew Jack in London
Cambridge has joined a growing number of British universities in offering a “safety net” so that undergraduates who pass the exams in their final year will not receive a grade lower than in the previous year.
In a letter to students and faculty, Stephen Toope, the vice-chancellor, called the approach “a radical rethink … to ensure that the methods of assessment we adopt are rigorous and fair, while taking into account the health and wellbeing of our students and staff”.
He said the university was also looking for ways to extend staff employed on fixed term contracts.
Liverpool, Warwick, Edinburgh and Exeter have announced similar safety nets.
US death toll overtakes 9/11 fatalities as virus continues to spread
Demetri Sevastopulo in Washington
The US death toll from coronavirus has overtaken the number of people killed in the September 11, 2001 terror attacks, as top government scientists warn that the total number of fatalities could rise to as many as 200,000.
According to data compiled by Johns Hopkins University, 3,170 people in the US have died from the virus, surpassing the 2,977 victims who were killed in the 9/11 attacks. The number of confirmed cases has risen to just under 165,000, far ahead of Italy which has almost 102,000 cases.
The grim statistic comes one day after President Donald Trump said the decision to extend strict social distancing guidelines until the end of April “could save 1m American lives”. Mr Trump, who originally wanted to reopen the economy by Easter, was persuaded to extend the guidelines after being briefed on the number of possible deaths.
Anthony Fauci, the widely respected head of the US National Institute of Allergy and Infectious Diseases and member of the White House coronavirus task force, at the weekend said that the US could see deaths in the range of 100,000 to 200,000. Deborah Birx, another doctor on the task force, on Monday told NBC News that the US could contain the number of fatalities within that range if the overall response was done “almost perfectly”.
In addition to surpassing the 9/11 count, the number of deaths exceeds the almost 2,500 Americans killed in Afghanistan, and is approaching the almost 4,500 who lost their lives in the Iraq war, according to Pentagon data. The two George W. Bush-era wars claimed the lives of a much higher number of Iraqi and Afghan citizens.
Spain launches package to protect hardest-hit renters
Daniel Dombey in Madrid
Spain has announced a package of measures for renters hit by the coronavirus crisis, but demanded that big property owners assume part of the cost.
The initiative highlights an issue that has become increasingly contentious in European countries hard hit by the virus and the accompanying state-decreed shutdown: how to provide and finance relief for people unable to pay their rent.
While Spain and other governments have already decreed mortgage payment moratoriums, the question of rent is more complex and sensitive because of landlords who depend on it for their own income.
Under the plan agreed by Spain’s left-wing government on Tuesday, evictions will be banned for six months, rental contracts about to expire will be extended, and micro-credits with zero interest and no commission will be granted to renters, payable over six to ten years.
“If we are asking people to stay at home, we should guarantee the constitutional right to housing,” said Pablo Iglesias, deputy prime minister and leader of the radical left Podemos party. He added:
All small property holders will receive the entire rent they are due but… big property owners and investment funds will have to assume – as is normal – part of the impact
He added that if a renter was unable to pay during the crisis, such an investor would either have to forgive half of the outstanding debt, or restructure all of it so that it was payable over three years.
The government said half a million families would be provided relief through the measure. It added that people who were not entitled to unemployment payments would receive €440 a month from the state and that the self-employed and businesses could delay social security payments for up to six months.
UK news agency PA furloughs sportswriters
Mark Di Stefano in London:
More than two-thirds of the sports journalists working for the UK’s main news wire will be sent home on furlough as the news industry grapples with the fall-out of the suspension of live sport.
PA Media – formerly the Press Association – said a quarter of staff across the business would be furloughed or placed on unpaid leave because the media group’s syndicated coverage has been severely disrupted because of the coronavirus outbreak.
Of those, 44 sporting and racing journalists would be furloughed on the government’s retention scheme, while there are no football matches or race meets for them to cover. PA Media said executives would also be taking a 30 per cent pay cut, with “further measures” being considered to “mitigate the financial impact” of coronavirus.
EU approves French tax relief scheme for airlines
Javier Espinoza in Brussels
A French scheme allowing airlines to defer taxes to reduce pressure on carriers’ cash flows has been found to be in line with EU aid rules, the commission said in a statement.
The scheme is set to partly compensate airlines for damage suffered due to the coronavirus outbreak, by temporarily reducing capital strain, the EU said.
“This is the first state aid measure notified to us by a member state aiming to mitigate damages to the airline sector,” said Margrethe Vestager, EU executive vice-president.
“Together with member states we are working to ensure that possible national support measures to tackle the outbreak of the virus can be put in place as quickly and effectively as possible, in line with EU rules.”
The scheme will be open to airlines with an operating licence in France, and will offer them the possibility to defer the payment of certain taxes that would in principle be due between March and December this year, to after 1 January 2021, and to pay the taxes over a period of up to 24 months.
UK cabinet meets via Zoom app
The UK’s senior ministers have met digitally for the first time, as several of its members isolate and the country enters its second week of a strict lockdown.
Boris Johnson tweeted a picture of his cabinet meeting via the Zoom videoconferencing app, which has exploded in popularity during the pandemic.
Millions confined to their homes under national lockdowns have turned to its video-call technology to host work meetings and socialise.
But as Hannah Murphy and Richard Waters report from San Francisco, the company has suffered a string of cyber security and privacy-related missteps recently.
This morning I chaired the first ever digital Cabinet.
— Boris Johnson #StayHomeSaveLives (@BorisJohnson) March 31, 2020
Handful of countries have halted exponential rise of coronavirus cases
Billy Ehrenberg in London
South Korea, China, Italy and Spain are among a few countries which have halted the exponential growth of coronavirus cases, according to new analysis by the Financial Times, while cases in the US and the UK are still growing exponentially.
The number of cases in an epidemic often follows a path of exponential growth, which means that case numbers increase as a proportion of existing cases, rather than by a steady number. Sooner or later, exponential growth is limited either because the virus runs out of susceptible hosts, or because social distancing measures prevent enough human contact for the rate to continue.
Exponential growth follows a straight line on a log scale chart. The graphic shows which countries have managed to put a brake on their epidemics – straying away from the straight line – and those which are still fighting to do so.
Scotland’s plans to suspend jury trials labelled “ill-advised” by lawyers
Mure Dickie in Edinburgh
Scottish government plans to suspend jury trials, because of the coronavirus epidemic, announced on Tuesday have been denounced by lawyers as a “premature, disproportionate and ill-advised” assault on a cornerstone of the justice system.
The measures to allow judges to decide serious cases on their own are included in emergency coronavirus legislation set to be passed by the Scottish parliament on Wednesday.
The Scottish National party government said plans to allow the most serious trials to be held by juries was essential to ensure criminal trials continued and to avoid a “totally unacceptable backlog”.
Nicola Sturgeon, first minister, said she was a believer in the jury system but was not concerned that miscarriages of justice could result. “There are many countries where serious crimes are taken through the courts without juries,” Ms Sturgeon said.
The Scottish Criminal Bar Association said its members would benefit financially from a resumption of trials. But the lawyers’ group said suspending jury trials and extending how long accused could wait until their cases were heard amounted to “attacks on principles that have been built over more than six hundred years and are the very cornerstone” of the justice system.
“These measures are premature, disproportionate and ill-advised,” the association said. “They are at best a knee jerk reaction to an as yet unquantified problem instigated by panic, and at worst something far more sinister.”
5 UK private schools announce plans to shut
Andrew Jack in London
At least five fee-paying schools across the UK over the past few days have announced plans to shut permanently after Easter, in growing signs coronavirus is adding to financial pressures on the private education system.
The closures come as many more independent schools have scrambled to maintain operations by providing online learning while facing pressures to cut fees by parents, some of whom are themselves facing uncertainty while locked down at home.
David Woodgate, chief executive of the Independent Schools’ Bursars Association, said he was aware of five schools that planned to close because of a lack of cash, although some were in discussions about rescue packages with potential buyers.
“It’s not coronavirus alone but it’s the final straw on top of other financial threats,” he said. “Reducing fees wouldn’t give them the kind of breathing space they require. Cashflow is critical.”
Neil Roskilly, head of the Independent Schools Association, said HawleyHurst, a school in Surrey, was among those set to close, although he said he was seeking to help the owners find a buyer who could keep its operations going.
“In another 12 months, they would have been in a very good position, with student numbers increasing. But coronavirus tipped them over the cliff edge,” he said.
The school, which did not reply to requests for an interview, was formed through the merger of a school in Ascot with one on its site in Camberley at the start of 2018, and currently teaches about 250 students including many with special educational needs.
New York cases jump 14% in single day
Joshua Chaffin in New Jersey
New York state’s coronavirus cases jumped 14 per cent over the last day to 75,795 as governor Andrew Cuomo disclosed that his brother, Chris, the CNN anchor, was among those infected.
The death toll for the state, the US epicentre for the pandemic, increased by 332 to 1,550. Mr Cuomo lamented that the state was still failing to get to grips with the challenge.
“We underestimated this virus. It’s more powerful, more dangerous than we expected,” the governor said.”This virus is the great equaliser,” the governor said, as he disclosed his brother’s diagnosis.
Chris Cuomo is remaining at home, and will continue to broadcast his evening news programme, according to CNN.
Italy’s rate of Covid-19 infection continues to slow
Miles Johnson in Rome
The daily growth rate in Covid-19 infections in Italy continued to slow on Tuesday, bolstering the hopes of the country’s public heath officials that Europe’s first nationwide lockdown is reducing the spread of new infections.
Official numbers on Tuesday showed that Italy’s total diagnosed cases rose by 4 per cent to 105,792, the slowest percentage daily growth rate since the outbreak began.
Tuesday’s increase was only slightly lower than the 4.1 per cent day-on-day increase seen the day before, but has followed over a week of declining increases in new infections.
Italy has been under stringent social distancing measures since March 10th with its government saying that they will remain in place at least until Easter. The country has tested 506,968 people for the virus so far.
Over the past 24 hours 837 people died from the virus, taking the total death toll in Italy to 12,428. Italy has the highest death toll of any country from Covid-19, and accounts for almost a third of all registered deaths around the world.
The number of recovered patients rose by 1,109 to 15,729 while the number currently in intensive care rose by 42 to 4,053.
Adidas ditches €1bn share buyback plan
Olaf Storbeck in Frankfurt
Adidas has abandoned plans to buy back shares worth €1bn this year as the world’s second largest sportswear maker is scrambling to safeguard liquidity after sales in many of the company’s core markets grounded to a halt in the wake of the coronavirus pandemic.
Adidas has been in the final year of a €3bn buyback scheme that was announced in 2018. The company temporarily suspended share purchases in mid-March and, on Tuesday, formally decided to ditch them altogether this year.
Adidas chief executive Kasper Rorsted told Frankfurter Allgemeine Zeitung on Sunday that due to the lockdowns in Europe, the United States and other countries, the group has temporarily lost 60 per cent of overall sales.
In a regulatory statement, Adidas pointed to “the high level of economic uncertainty caused by the dynamic developments related to the coronavirus outbreak” and said it is “proactively adopt[ing] a conservative approach to liquidity management in order to preserve the company’s financial flexibility”.
Since mid-February, shares in Adidas have lost close to 30 per cent.
The Nike rival last week already decided to defer rent payments for its shops that are currently closed, causing a political backlash in its home country Germany. Germany finance minister Olaf Scholz called that move “irritating”.
UK sees ‘green shoots’ in case numbers
Jim Pickard, chief political correspondent
Stephen Powis, medical director of NHS England, has said that the number of new coronavirus cases in the UK is showing a sign of a “plateau”, describing this as “green shoots” of positive news.
But he pleaded with the public: “The last thing I would want anyone to think is that now is the time to take our foot off the pedal.”
Mr Powis, speaking at the daily Downing St press conference, said:
We are at the start…we must not let go of the measures we are doing. We need to keep our foot on the pedal.
Michael Gove, Cabinet Office minister, announced at the event that the UK had seen the single highest increase in deaths on Monday of 381, taking the total to 1,789. So far, 143,186 people have now been tested – a much slower rate than countries such as Germany – and 25,150 have tested positive.
Mr Powis said the number of cases was not rising as fast as it had been. But he added: “We are still in the woods and it’s important to comply with the instructions.”
Cuomo expects NY to get a fraction of ventilators he ordered from China
Joshua Chaffin in New Jersey
New York governor Andrew Cuomo said he expects to receive less than 15 per cent of the ventilators he ordered from China as he despaired at the competition between US states and the federal government for the life-saving devices.
The governor said the state had ordered 17,000 ventilators from China at $25,000 apiece but — in part due to competition — only expected to receive 2,500 of them.
“It’s like being on eBay with 50 other states bidding on a ventilator. Then FEMA gets involved and FEMA starts bidding,” Mr Cuomo said, calling the situation “bizarre.”
“The orders into China are very slow coming out. I’m not exactly sure why,” he said
Greece records first coronavirus case among asylum-seekers
Kerin Hope in Athens
A woman asylum-seeker living in a camp outside Athens tested positive for coronavirus after giving birth at a maternity clinic in the Greek capital, the migration ministry said on Tuesday.
It was the first recorded case of the virus among an estimated 60,000 refugees and migrants living in camps on the eastern Aegean islands and several remote mainland districts. A ministry official said it was unclear whether the woman became infected in the camp or after she was admitted to hospital.
The baby’s father tested negative for the virus, the official said.
“The public health service is tracking the contacts made by this patient in the past few days and is taking all necessary measures to protect camp residents and staff,” a ministry statement said.
Ten medical staff at the clinic were quarantined and three other patients in the woman’s room underwent tests for Covid-19, according to a medical worker at the clinic.
The International Organisation for Migration, which provides management support for the camp at Ritsona, 80km north of Athens, said it distributed supplies of soap and cleansers to residents, while working spaces and common areas were disinfected every week.
English cricket unveils £61m emergency funding
The England and Wales cricket board has announced a £61m support package to help the sport weather the disruption caused by coronavirus.
“We are fully aware that the situation with Covid-19 will continue to develop, and it will be months before the full financial fallout is made clear,” said ECB chief executive Tom Harrison.
There will be no professional cricket played in the UK until at least May 28, and the summer game faces the possibility of its season being entirely wiped out as the government has warned that it could take as long as six months for normal life to return.
Many of the domestic English counties were financially reliant on central handouts even before the pandemic.
Saudi Arabia asks Muslims to delay making Hajj travel arrangements
Ahmed Al Omran in Riyadh
Saudi Arabia has asked Muslims seeking to perform the Hajj pilgrimage this year to postpone making any travel arrangements until there is more clarity on the extent of the coronavirus spread, raising concerns over the fate of one of the most important events on the Islamic calendar.
“The Kingdom of Saudi Arabia is ready to serve pilgrims in all circumstances, but considering the current situation with this global pandemic, the priority is to protect the health of citizens and Muslims around the world,” Hajj minister Mohammad Benten told state television on Tuesday.
Saudi authorities halted the entry of Muslim pilgrims seeking to worship at the holy cities of Mecca and Medina last month before the kingdom reported its first case of Covid-19. More than 2.5m people perform the Hajj pilgrimage annually. This year Hajj season falls at the end of July.
Officials in some Muslim countries said last week that the kingdom has paused discussions about finalising their quotas of pilgrims who will be permitted to perform Hajj.
Two people were reported dead of the coronavirus in Saudi Arabia on Tuesday. The country’s death toll from the disease now stands at 10. The health ministry confirmed 110 cases, bringing the total in the kingdom to 1,563.
Pregnant women in prison in England and Wales granted temporary release
Robert Wright in London
Pregnant women in prison in England and Wales who pose no threat to the public will be temporarily released from prison on licence to protect them from the danger of coronavirus infection, the Ministry of Justice has announced.
The ministry said it would also release prisoners in mother and baby units on the same terms.
The announcement is the latest response by the Prison Service to the risks to prisoners of infection amid the Covid-19 outbreak. The service has taken a number of other steps, including banning all visits to prisons to reduce the risk of the Covid-19 virus’s spreading inside jails.
The planned releases on licence – from which women could be recalled if they breach their licence terms – is a significant step from a government that has sought to extend prison terms and the proportion of them that prisoners serve.
Robert Buckland, justice secretary, said ministers had already taken “extraordinary measures” to protect prisoners and the public over the last few weeks.
But he went on: “It’s clear now that we must temporarily release pregnant woman and those with small babies with them inside prison.”
The ministry said 65 prisoners had so far tested positive for Covid-19 in 23 prisons across England and Wales. There have been 14 positive tests for prison staff and four positive tests for prisoner escort staff.
There have so far been reports of deaths of two prisoners – one 84, the other 66 – who had tested positive for coronavirus in prisons in England and Wales.
France transports patients on high-speed trains to ease pressure on hospitals
Leila Abboud in Paris
France has in recent days transported 36 coronavirus patients on specialised high-speed trains to less busy hospitals so as to relieve pressure on those in the east of the country and in the Paris region.
Jerome Salome, a health ministry official, said the system was a “first in peacetime” for France, and would continue in the days ahead.
The number of people hospitalised in France for Covid-19 stood at 22,757 on Tuesday, of which 5,565 people were relying on ventilators to help them breathe. The total number of people who have tested positive for covid-19 stood at 52,028 in the country. Hospitals have reported 499 deaths in the past 24 hours, taking the total to 3,523.
Munich Re profit to take a hit on event cancellation policies
Oliver Ralph in London
Munich Re, the German reinsurance company, has warned that its first quarter profits will be much lower than last year because of claims on event cancellation policies.
It has also withdrawn its profit guidance for the year and suspended its €1bn share buyback plan, although its dividend remains in place.
Munich Re is one of the first insurance companies to warn about the scale of Covid-19 claims. The cancellation of major sporting events such as the Olympics is expected to leave the industry with a multi-billion dollar bill.
The company said on Tuesday that first quarter profits would fall from €633m last year to the “low three-digit million euro range”. However it added that its capital levels remained within its target range.
Munich Re’s shares have lost more than a third of their value since mid-February.
Poland’s ruling party drafts vote by mail legislation to avoid delaying polls
James Shotter in Warsaw
Poland’s ruling Law and Justice party has drawn up legislation to allow all citizens to vote by post in the country’s upcoming presidential election, as it battles to avoid having to postpone the poll due to coronavirus.
Like many EU countries, Poland is in near-total lock-down as a result of the virus, with all but non-essential shops closed, public gatherings banned, and hotels, parks and other public places closed.
Yet with its candidate, incumbent Andrzej Duda, leading comfortably in the polls, Law and Justice is desperate to avoid postponing the vote, and on Tuesday posted legislation that would let all citizens who want to vote by post on a one-off basis.
Law and Justice had already proposed letting the elderly and those in quarantine vote by post, attaching the proposals at short notice in the middle of the night to an economic rescue package. The move drew criticism from its opponents, as Poland’s constitutional tribunal has previously ruled that election rules should be changed less than six months before a vote. The main opposition candidate has since suspended her campaign and called on voters to boycott the election.
Poland has so far recorded 2,215 cases of the novel virus and 32 deaths.
CFTC relaxes restrictions for futures trade execution by US brokerages
Kadhim Shubber in Washington
US brokerages can use foreign staff to execute domestic futures trades without specifically registering them for that purpose, the Commodity Futures Trading Commission announced on Tuesday.
The regulatory relief, which will last until September 30, is the latest in a series of actions by the CFTC and other US regulators to help banks and other market players deal with the coronavirus pandemic.
The letter issued on Tuesday will let global financial institutions service their US futures clients through entities overseas even if those entities are not currently registered.
“This action bolsters our efforts to facilitate orderly trading and liquidity in our derivatives markets during this volatile period,” said Joshua Sterling, director of the CFTC’s division of swap dealer and intermediary oversight.
Russia to send medical supplies and protective gear to US
Max Seddon in Moscow
Russia says will send a plane to the US carrying medical equipment and personal protective gear to help fight the coronavirus epidemic.
Kremlin spokesman Dmitry Peskov told reporters on Tuesday that the plane would leave Moscow for the US after Donald Trump accepted Russian president Vladimir Putin’s offer a day earlier.
“The Russian side offered aid in the form of medical supplies and protective gear in the light of the difficult epidemiological situation in America,” Mr Peskov said, according to Interfax. “Trump gratefully accepted this humanitarian aid.”
“In offering aid to our American colleagues, the president expects that when American producers of medical equipment and supplies pick up the pace, they will also be able to answer in turn if required,” Mr Peskov said. “Now, when the current situation affects everyone without exception all over the world, there is no alternative other than acting in the spirit of partnership and mutual aid.”
Russia sent nine giant IL-76 transport planes carrying 600 ventilators, 100 military virologists, and eight medical teams to Italy last week to help with the country’s coronavirus outbreak. Military trucks bearing the Russian flag then drove the aid to Bergamo, one of Italy’s hardest-hit regions.
UK regulator reminds financial services companies to follow the rules
Mathew Vincent in London
Britain’s City regulator has written to the bosses of financial services groups reminding them of the rules they must still follow amid coronavirus disruption, and rejecting requests for flexibility that it deems “opportunistic”.
In a ‘Dear CEO’ letter, the Financial Conduct Aurhoty’s interim chief executive, Christopher Woolard, told regulated firms they must carry out client identity checks remotely to comply with money laundering regulations. However, with restrictions in place on non-essential travel and meetings, companies may now rely on client’s emailed documents, seek third party verification via their lawyers or accountants, and even accept “selfies” as proof of ID.
Firms must also continue to meet obligations on the ‘best execution” of client orders. But they will not face enforcement action if execution reports are slightly delayed. Similarly, they will not be pursued if notifications of falls in the value of clients’ investments are made online.
Mr Woolard said requests for some rule changes would be refused, though, if not in the interests of consumers. In a clear warning that firms must not seek to gain from the crisis, he said: “In the case of requests that we consider to be opportunistic and designed to undermine consumer protection, we will reflect on what this tells us about the firms involved.”
SocGen abandons 2020 financial targets, cancels dividend
David Crow in New York
Société Générale, the French bank, said it was abandoning its financial targets for 2020 due to “uncertainties related to the magnitude and duration of the Covid-19 pandemic”.
Last month, the lender said it was targeting higher profits this year than last, a slight growth in revenues, lower costs, and an improvement in its return on tangible equity, a closely-watched measure of profitability.
However, on Tuesday night the bank said it was “suspending” those targets while it analysed “potential [coronavirus] scenarios and their impact on the group’s results”. It said it had taken the decision following recommendations from the Autorité des Marchés Financiers, the French banking supervisor.
SocGen also said it would also cancel its dividend for this year after the European Central Bank demanded that eurozone lenders refrain from shareholder payouts and buybacks during the coronavirus outbreak.
The Paris-based bank noted that the ECB had forbidden payouts until at least the start of October but that this was “incompatible with French law”, which stipulates that annual dividends must be paid before the end of September.
It added that it could remedy this in the second half of 2020 by paying an interim or exceptional dividend.
Portugal’s TAP airline to temporarily lay off 90% of staff
Peter Wise in Lisbon
TAP-Air Portugal is to lay off 90 per cent of its 10,000 workers for at least a month as the national flag carrier cuts flights to a bare minimum because of the coronavirus pandemic.
In an email sent to employees on Tuesday, TAP said the remaining 10 per cent of staff would work reduced hours and receive 80 per cent of their pay.
Executive and non-executive board members are to take a voluntary reduction of 35 per cent in their earnings, roughly the same percentage cut in pay that the airline’s laid-off workers will suffer.
Under a government scheme to save jobs and firms during the coronavirus crisis, laid-off workers can receive two-thirds of their usual pay, of which 70 per cent will be paid by the state.
The measures will come into force for 30 days beginning on Thursday and are subject to renewal, TAP said in the email, which was made public by several Portuguese news websites.
TAP will operate only emergency repatriation and medical supply flights as well as a few flights a week to and from the Portuguese islands of the Azores and Madeira. The loss-making airline, which is 50 per cent state owned, is seen as a potential candidate for government support.
Portugal on Tuesday reported accumulated totals of 7,443 confirmed coronavirus cases and 160 deaths linked to the virus
Dyson names new CEO as it readies to make ventilators
Michael Pooler in London
Dyson has replaced its chief executive with the man who was in charge of its abandoned electric car project, as the company prepares to manufacture thousands of ventilators for treating coronavirus patients.
The appliances maker announced that Roland Krueger, who joined the company last year from the automotive industry, would take over the role from Jim Rowan with immediate effect.
“Roland’s engineering background in the complex world of car development, manufacture and marketing, combined with his knowledge of Dyson R&D and global operations, make him very well qualified to lead Dyson,” said Sir James Dyson.
Sir James remains the controlling force at the business that he founded in 1992 and still owns, taking the most important decisions under the title of chief engineer.
The change comes as Dyson embarks into a field far removed from its mainstay of floor cleaners, hairdryers, air purifiers and lighting.
As countries around the world scramble to obtain ventilators to support people with respiratory problems caused by Covid-19, the company has won an order from the UK government to make 10,000 of the devices that it designed from scratch in 10 days. The contract is contingent on the machines passing regulatory and safety tests.
S&P 500 slides more than 1%, securing worst quarter since 2008
US stocks retreated after a strong rally at the start of the week, handing the benchmark S&P 500 its worst quarter since the financial crisis.
The S&P 500 fell 1.6 per cent on Tuesday, weighed down by the utilities and real estate sectors. The index lost one-fifth of its value in the first three months of the year, as investors grew worried over the economic damage caused by the global coronavirus pandemic. It was the S&P 500’s steepest quarterly fall since the final quarter of 2008 and its worst first-quarter performance on record.
The blue-chip Dow Jones Industrial Average was down 1.8 per cent. The Nasdaq Composite fell 1 per cent.
US government debt also declined. The yield on the 10-year Treasury note rose 1.1 basis points to 0.682 per cent. Yields rise as prices fall.
Trump to grant 90-day suspension for some US tariffs
James Politi and Aime Williams in Washington
Donald Trump was poised to announce a 90-day suspension of tariff payments on certain US imports, including some apparel and light trucks, as his administration seeks to blunt the damage to the economy from the expanding coronavirus pandemic.
The Trump administration had already allowed tariff exemptions for certain medical supplies in recent weeks as US officials sought to bolster domestic stockpiles of protective equipment and other goods used in the healthcare sector. But the latest action would have a broader impact on the struggling US economy, as US officials try to keep businesses afloat following the sudden drop in demand due to the coronavirus outbreak.
According to one person familiar with the decision, the move would however not involve some of the most high-profile tariff actions taken by the US president during the trade wars that have marked his presidency, including punitive levies on $360bn of Chinese imports, and levies on imported metals imposed on national security grounds.
The US trade representative did not respond to a request for comment. Earlier on Tuesday, Bloomberg News reported the partial scope of the tariff relief, which is expected to be unveiled in an executive order.
Invesco’s Barnett hit by 60% writedown on unlisted holdings
Siobhan Riding in London
Invesco’s Mark Barnett has suffered a significant mark down in the value of his unlisted investments, forcing him to pledge to offload them to avoid a Woodford-style liquidity crunch.
The US fund group said on Tuesday that it had applied a 60 per cent write-down to the values of unquoted companies held in the £3.4bn High Income and £1.5bn Income funds, resulting in falls of around 5 per cent in the funds’ net asset values. The news was first reported by FT Adviser, a Financial Times sister publication.
Invesco sought to distance itself from the prospect of a liquidity crisis similar to the one that hit Neil Woodford, Mr Barnett’s former mentor, by vowing to sell the unlisted component of both funds and reinvest the proceeds in publicly listed large and mid-cap companies.
The coronavirus-induced market swings of the last month have pummelled Mr Barnett’s funds, depressing the value of the funds’ public holdings and increasing the weight of their unlisted stocks relative to the rest of the portfolio.
At the end of March, the funds’ unlisted component stood at 8.4 per cent for the High Income fund and 9.1 per cent for the Income fund, placing them dangerously close to a 10 per cent regulatory cap on unquoted stocks.
Invesco said that its decision to offload its unlisted holdings was in response to “a significant shift in risk tolerance towards illiquid or unquoted assets in the last year”, as well as the “recent market dislocation and opportunities arising”.
Greece puts northern towns and villages into quarantine
Kerin Hope in Athens
Civil protection authorities have put several towns and villages across northern Greece into quarantine after they reported a steady rise in coronavirus cases over the past 10 days.
Residents of Kastoria and three nearby villages in western Macedonia and the towns of Xanthi and Myki in Thrace were banned from leaving town for the next two weeks, while an 8pm to 8am curfew was also imposed.
The three districts together have recorded more confirmed cases of the virus than any other region of the country outside Athens, according to health authorities.
Eighty-five new cases of coronavirus were confirmed on Tuesday, bringing the total number to 1,314. The death toll reached 49 with seven fatalities recorded in the past 24 hours, the health ministry spokesman Sotiris Tsiodras said.
Twenty out of 383 passengers travelling on a Greek ferry from Cadiz in Spain also tested positive for the virus on Tuesday. Greek health authorities boarded the ship at anchor off the port of Piraeus after it was refused permission to dock in Turkey.
Honduras taps IMF loan to meet coronavirus expenses
Jude Webber in Mexico City
Honduras has tapped $143m from a IMF stand-by facility — about half of its total funds — to meet higher healthcare and social expenses arising from coronavirus.
The funds come from a $312m stand-by agreement and credit facility approved last July.
The IMF said in a statement:
Economic activity will be affected by the prudent decision to lock down the economy early in the expansion phase of the virus in order to save lives and contain pressures on the country’s health system. Economic growth and the external position will be affected as well by global spillovers, through the impact of external demand, lower remittances flows, tighter external financial conditions, and the contraction in tourism.
The IMF is forecasting 3.5 per cent growth for Honduras and applauded the government’s “steadfast commitment to sound macroeconomic policies over the last years” and use of “targeted fiscal actions” to mitigate the Covid-19 damage.
Ireland records its highest single-day death toll
Arthur Beesley in Dublin
Ireland has reported 17 further coronavirus deaths, the highest in a single day, amid concern in the government about increased cases among healthcare staff who now make up about a quarter of infections.
The new deaths took the total number of fatalities in the Irish republic to 71, as the detection of 325 new Covid-19 cases brought the overall number to 3,235.
Some 647 of 2,615 cases on Sunday were associated with healthcare workers, prompting the government to consider asking nurses and other medical staff who share accommodation to move apart for the duration of the crisis.
“That’s an option we’ll certainly consider,” Simon Harris, the health minister, told national broadcaster RTE on Tuesday night. “This is only something we’d be looking at if it was supportive and helpful to people working in the health system.”
Such moves could lead the state to offer alternative accommodation to nurses and healthcare staff.
Mexico City to shut stores and parks to slow Covid-19 spread
Jude Webber in Mexico City
Mexico City will shut shopping centres, department stores and parks from Wednesday after the federal government called on citizens nationwide to stay at home for a month to slow the coronavirus spread.
Police cars will broadcast messages using loudspeakers urging people to look after themselves and society as a whole by staying indoors so as not to “infect or get infected”. Food shops and pharmacies will stay open.
Mexico’s government has decreed a national health emergency but has ruled out enforcement measures. The health ministry says this is the “last chance” for Mexicans to slow the spread of the virus and ease the looming pressure on hospitals. As of Monday, Mexico had 1,094 confirmed cases and 28 deaths.
Trump warns of ‘very, very painful two weeks’ as White House presents fatality estimates
Donald Trump told Americans to be prepared for a “very painful, very very painful two weeks” as doctors on the White House’s coronavirus task force unveiled models that showed fatalities in the US could reach 240,000 even in the best-case scenario.
Anthony Fauci and Deborah Birx, medical experts who have led the task force, said that even with “full mitigation”, the US was likely to see 100,000 to 240,000 deaths, with fatalities reaching an apex in about two weeks and then extending well into June.
Both Dr Fauci and Dr Birx said they hoped that the total would be lower, noting that the current projections are based on data gathered from the hardest-hit states like New York and New Jersey as well as the course the disease ran in Italy.
But they acknowledged the 100,000-240,000 forecast was the best estimate based on academic models even if the US continues lockdown policies that prevent large gatherings and impose social distancing.
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