• MTS Economic News_20200402

    2 Apr 2020 | Economic News

CORONAVIRUS CRISIS UPDATES:

-Total confirmed cases: More than 937,130

-Total deaths: At least 47,267

-The coronavirus COVID-19 is affecting 203 countries and territories around the world and 1 international conveyance (the Diamond Princess cruise ship harbored in Yokohama, Japan, and the Holland America's MS Zaandam cruise ship.)

-US cases: At least 215,344 (+341), and deaths: 5,112 (+10)

-Italy cases: At least 115,574, and deaths: 13,155

-Thailand cases: At least 1,875 (+104), and deaths: 15 (+3)


- COVID-19 cases and deaths rising, debt relief needed for poorest nations: WHO

The head of the World Health Organization voiced deep concern on Wednesday about the rapid escalation and global spread of COVID-19 cases from the new coronavirus, which has now reached 205 countries and territories.

WHO Director-General Tedros Adhanom Ghebreyesus said that his agency, the World Bank and the International Monetary Fund backed debt relief to help developing countries cope with the pandemic’s social and economic consequences.

“In the past five weeks there has been a near-exponential growth in the number of new cases and the number of deaths has more than doubled in the past week,” Tedros told a virtual news conference at the organisation’s Geneva headquarters.

“In the next few days we will reach 1 million confirmed cases and 50,000 deaths worldwide,” he said.


-Australia’s national science agency said on Thursday it has commenced the first stage of testing potential vaccines for COVID-19, as it joins a global race to halt the coronavirus pandemic.

The first phase testing would take around three months, CSIRO’s director of health Rob Grenfell told Reuters, adding that any resulting vaccine would not be available to the public before late next year.


- The number of coronavirus cases in Malaysia is expected to peak in mid-April, the World Health Organisation said on Thursday, adding that there are signs of a flattening of the infection curve.


· The dollar held gains on Thursday as investors rushed to the safety of the world’s most liquid currency given the massive disruption to global trade due to the coronavirus pandemic.

The dollar index against a basket of major six currencies stood flat at 99.588 after a gain of 0.53% overnight as the U.S. currency advanced against most of its major peers.

Early on Thursday, the euro dipped 0.2% to $1.0924 after a 0.69% fall on Wednesday. Sterling fetched $1.2382 , up 0.2%, paring about a half its prior day’s losses.

The Australian dollar changed hands at $0.6080, having dropped 0.99% in the previous session.

The dollar also bounced back 0.3% to 107.15 yen after it touched a two-week low of 106.925 on Wednesday.

Markets were spooked after U.S. President Donald Trump’s dire press briefing late Tuesday, in which he warned Americans of a “painful” two weeks ahead in fighting the coronavirus even with strict social distancing measures.

“If America’s optimistic president is warning the worst of the pandemic is yet to come, what factory in their right mind would keep the doors open and workers on the payroll?” asked Chris Rupkey, chief financial economist at MUFG Union Bank in New York.


· US Initial Jobless Claims Preview: The tidal wave rolls on



The Department of Labor will issue its initial jobless claims for the week of March 28 on Thursday April 2 at 12:30 GMT, 8:30 EDT.

Forecast

Initial claims are expected to rise to 3.5 million from 3.283 million the previous week. The range of the estimates in the Reuters survey of economists is from 1.5 million to 5.250 million. The four-week moving average was 998,250 in the prior week. Continuing claims are predicted to rise to 4.882 million from 1.803 million.

Economic impact

Much about the extraordinary situation that the US and much of the world finds itself in depends on the length of the economic closures.

The speed at which the economy returns to normal functioning will be determined by the course of the pandemic, on the evolving assessment of the health risks and the accumulating economic damage. It is obvious that the longer the shutdowns continue the more businesses will fail and temporary layoffs will become permanent job losses.


· China’s domestic travel industry is poised to resume normal activity before the summer holiday season, according to the CEO of the country’s largest travel site Trip.com.

“We are confident, with the government’s strong control measures, we’ll be able to lead the recovery within China,” Sun told “Street Signs” on Wednesday.


· The U.S. Energy Department on Wednesday urged Saudi Arabia and Russia to calm oil markets after the kingdom’s crude supply rose to a record of more than 12 million barrels per day even as oil demand falters on the coronavirus pandemic.


· China will relax or remove restrictions on car purchases in some regions to stabilize sales or new cars, while accelerating plans to boost the retirement of old cars, the commerce ministry said on Thursday.

China’s auto industry suffered a 79% drop in sales in February and expects a fall of around 10% in the first half of this year.


· Oil may need to fall below $10: Morgan Stanley

Prices may need to fall below $10 to rebalance the market, which is currently oversupplied and witnessing unprecedented demand destruction, according to Morgan Stanley analysts.

WTI fell by over 65 percent in the first quarter as the coronavirus outbreak brought the global economic activity to a near standstill. Most analysts expect the economic depression to last through the rest of the year.

Put simply, the demand side is likely to remain weak. Hence, there is consensus in the market that prices would need to drop to such low levels that it forces out existing physical supply.


· Crude oil futures jumped 10% on Thursday after U.S. President Donald Trump said he expected Saudi Arabia and Russia to reach a deal soon to end their oil price war and Russian President Vladimir Putin called for a solution to “challenging” oil markets.

Brent crude futures rose 11.36%, or $2.81, to $27.55 as of 0701 GMT, while U.S. West Texas Intermediate (WTI) crude futures increased 10.0% or $2.03, at $22.34.


Reference: Reuters, CNBC, Worldometers


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