· Coronavirus Updates:
Ø Total confirmed cases: More than 109,936
Ø Total deaths: At least 3,806
Ø The coronavirus COVID-19 is affecting 104 countries and territories around the world and 1 international conveyance (the Diamond Princess cruise ship harbored in Yokohama, Japan).
Ø US cases: At least 538, and deaths: 22
Ø Italy cases: At least 7,375 , and deaths: 366
Ø South Korea cases: At least 7,313 , and deaths: 50
Ø Iran cases: At least 6,566 , and deaths: 194
- Number of UK coronavirus cases rises by 30% to 273, third person dies
The number of confirmed cases of coronavirus in the United Kingdom rose by 30% to 273, the government said on Sunday, and a third person who tested positive for the virus has died.
The Department of Health and Social Care said the number of cases had risen by 64 from Saturday, the biggest one-day increase so far. The largest concentration of cases is in London, which has had 51.
- France bans large gatherings as coronavirus toll rises
France banned gatherings of more than 1,000 people, as health authorities reported three new coronavirus deaths and an increase in the number of recorded infections on Sunday.
The new restrictions on large events expand on measures previously announced in coronavirus hotspots to apply them nationwide, health minister Olivier Veran said.
- German coronavirus cases jump, economic anxiety rises
The number of confirmed coronavirus cases in Germany jumped by more than 100 on Saturday, reaching 795 by mid-afternoon amid growing concern at the economic impact of the spreading epidemic on one of the world’s most trade-dependent economies.
With concern growing at the vulnerability of long international supply chains to such an epidemic, Ola Kallenius, chief executive of Mercedes maker Daimler (DAIGn.DE), warned against a return to economic nationalism.
“These events show how fragile global supply chains are,” he told Der Spiegel magazine in remarks published on Saturday. “But a world without global work sharing would be less successful ... We should protect (that success) while checking for vulnerabilities where we can bring more security into the supply chain.”
He said Daimler was “gradually ramping up” production again in China after the Chinese New Year stoppage, which had been lengthened because of the coronavirus. But the disease would have an impact on company results.
“We can’t yet say what the impact will be, but it is clear that both production and sales will be affected,” Kallenius added.
· PIMCO sees mild recession due to virus but tight credit poses risk
Pacific Investment Management Co (PIMCO), one of the world’s largest investment firms, told clients on Sunday the coronavirus outbreak is likely to cause a relatively mild and short recession though tight credit markets could worsen the downturn.
PIMCO expects the Federal Reserve to cut interest rates at least another 50 basis points with the possibility the Fed drops rates to zero and resumes asset purchases, Fels said. Futures traders bet the Fed will slash rates to near zero by April.
Other central banks, including in developing countries, are likely to ease policy further in coming weeks and months to sustain the flow of credit to the corporate sector, he said.
Japan is very likely already in recession and PIMCO sees a distinct possibility of a technical recession, or two consecutive quarters of negative growth, in the United States and the euro zone during the first half of 2020, Fels said.
PIMCO foresees a slow and mild U-shaped recovery in the later half of this year assuming the outbreak outside of China peaks in a few months as output and demand normalize, he said.
China’s recent manufacturing and demand slump will affect activity elsewhere in the world with a time lag of several months, Fels said. Demand for services such as travel, tourism, entertainment and meals outside the home will contract due to containment measures and the fear factor, he said.
· Dollar hammered as U.S. Treasury yields sink
The U.S. dollar fell across the board on Friday, posting its biggest weekly loss in four years, as a sharp drop in U.S. government bond yields hurt the greenback’s appeal.
The dollar index, which measures the greenback’s strength against a basket of six major currencies, was about 0.7% lower at 95.995, after slipping to a 13-month low of 95.701. For the week, the index was down 2.2%, its biggest weekly decline since early May, 2016.
“A historic slide in U.S. Treasury yields served as the straw that broke the dollar’s back and its handle on three-year highs reached a couple weeks ago,” said Joe Manimbo, senior market analyst at Western Union Business Solutions, in Washington.
“Economic uncertainty is spreading about as fast as the coronavirus which is heaping pressure on the Federal Reserve to follow up its big rate cut this week with another when it meets later this month,” he said.
Markets now bet the Fed will again cut rates by 50 basis points this month.
The euro was about 0.7% higher at an eight-month high of 1.1311. Against the Japanese yen, the dollar was down 0.6% at 105.49 yen, a more than six-month low.
Currency volatility gauges rose on Friday, with one-month euro-dollar implied volatility reaching its highest since November 2018.
Sterling extended gains against the broadly weaker dollar, and was boosted by comments from the European Union’s chief Brexit negotiator that a trade deal between Britain and the bloc was still possible this year. The currency was up 0.5% at $1.3021.
· Bond yields slide to record lows, stocks succumb to virus fears
Yields on U.S. Treasuries plunged to historic lows on Friday as fear the coronavirus outbreak will slam the global economy drove investors to snap up risk-adverse assets and dump equities, overshadowing data highlighting a strong U.S. labor market.
The 10-year Treasury US10YT=RR yield fell to a record low of 0.69% as new milestones were set across the U.S. bond market, which this week has seen some of its biggest moves in years as the pandemic spreads outside China.
A U.S. jobs report showed employers maintained a robust pace of hiring in February, driving solid wage growth and the unemployment rate to fall back to near a 50-year low of 3.5%.
Futures traders bet the Federal Reserve will slash U.S. interest rates to near zero by April.
Treasury prices soared but the strong U.S. non-farm payrolls report lifted the yield a bit from their lows.
Benchmark 10-year notes US10YT=RR rose 42/32 in price to yield 0.7923%, while the 30-year bond US30YT=RR rose 212/32 in price to yield 1.3167%.
· Yen soars as investors stampede to safety; oil-exposed currencies tank
The Japanese yen leapt 1.6% to a more than three-year high on Monday as the widening reach of the coronavirus sent investors scrambling for safety, while oil-exposed currencies plunged after Saudi Arabia slashed its selling price.
In early trade, the yen broke JPY= through 104 per dollar and kept rising as high as 103.52 per dollar.
The Japanese currency is regarded as a safe haven by virtue of the country’s status as the world’s biggest creditor.
While the yen soared, the dollar dived against the euro as trade in U.S. Treasury futures pointed to 10-year yields crumbling below 0.5% TYc1 - effectively removing one of the dollar’s greatest attractions.
The euro EUR= last stood at an 8-month high of $1.1380.
· Standard U.S. economic weapons may be inadequate for coronavirus crisis
The Federal Reserve should be allowed to purchase a broader range of securities and assets if the coronavirus outbreak forces the U.S. central bank to launch a new round of big asset purchases to stimulate the economy, Boston Fed President Eric Rosengren said on Friday.
The central bank has begun to grapple with what measures it would use if the outbreak of the flu-like illness worsens in the United States and causes a severe economic downturn.
As the risks of the coronavirus outbreak continue to rise, U.S. officials are wrestling with what to do in the worst-case economic scenarios, if large numbers of people can’t go to work, are told to stay home, or stop going out in public entirely.
In Washington on Friday, Trump administration officials pledged to step in with “timely and targeted” help for workers and small businesses if incomes take a hit.
Federal Reserve officials, meanwhile, broached ideas beyond interest rate cuts, such as urging banks to relax rules governing debt payments or pushing Congress to let the U.S. central bank buy assets other than government securities if specific markets come under stress.
· Fed's Evans says U.S. should support workers who lose pay if coronavirus worsens
Federal Reserve officials said they will consider various scenarios when they gather at their March policy meeting and that the most effective response from U.S. officials will be one that supports workers who lose pay because of the coronavirus.
“The most effective tools would be getting some type of liquidity and funds in the hands of the people who need it the most,” Chicago Fed Bank President Charles Evans said on a panel at an event hosted by the Shadow Open Market Committee in New York.
Low-wage workers in particular could suffer financially if they are required to stay home from work for weeks without pay, Evans said. “The consumer has been very strong in the recovery and so maintaining that has the greater hope of maintaining the recovery and expansion going forward,” he said.
· China’s February forex reserves fall to $3.107 trillion
China’s foreign exchange reserves fell less than expected in February as the yuan weakened on fears over the fast spreading coronavirus epidemic and its severe impact on economic activity.
The country’s foreign exchange reserves - the world’s largest - fell $8.779 billion in February to $3.107 trillion, central bank data showed on Saturday.
The yuan CNY=CFXS fell 0.78% against the dollar in February, its first monthly drop since August, while the dollar rose 0.77% as investors shifted money from virus-hit Asia into U.S. assets.
The virus outbreak and strict government measures used to contain its spread likely halved China’s economic growth in the first quarter compared with the previous three months, triggering expectations for more interest rate cuts, according to the latest Reuters poll.
· China January-February exports tumble, imports down as coronavirus batters trade and business
The gloomy trade report is likely to reinforce fears that China’s economic growth halved in the first quarter to the weakest since 1990 as the epidemic and strict government containment measures crippled factory production and led to a sharp slump in demand.
Overseas shipments fell 17.2% in January-February from the same period a year earlier, customs data showed on Saturday, marking the steepest fall since February 2019.
- China’s yuan-denominated exports in January-February fell 15.9% from the same period a year earlier, customs data showed on Saturday, while imports slid 2.4% as a fast spreading coronavirus outbreak caused severe disruptions to manufacturing activity.
- That left China with a trade deficit of 42.59 billion yuan in the first two months of the year, according to Reuters calculations based on customs data.
China’s exports contracted sharply in the first two months of the year, and imports declined, as the health crisis triggered by the coronavirus outbreak caused massive disruptions to business operations, global supply chains and economic activity.
- China’s trade surplus with the United States for the first two months of the year stood at $25.37 billion, Reuters calculation based on Chinese customs data showed on Saturday.
That is much narrower than a surplus of $42.16 billion in the same period last year.
· Oil takes biggest daily dive in over a decade as Russia, OPEC split
Brent slid to its biggest daily loss in more than 11 years on Friday after Russia balked at OPEC’s proposed steep production cuts to stabilize prices hit by economic fallout from the coronavirus, and OPEC responded by removing limits on its own production.
More than 1 million U.S. crude contracts changed hands during the session, as the three-year pact between OPEC and Russia ended in acrimony.
Brent futures had their its biggest daily percentage fall since December 2008, down $4.72, or 9.4%, to settle at $45.27 a barrel. It was Brent’s lowest closing price since June 2017.
U.S. West Texas Intermediate crude dropped $4.62, or 10.1%, to $41.28, its lowest close since August 2016 and the largest daily percentage loss since November 2014.
· Oil plummets 30% as OPEC deal failure sparks price war
Oil futures suffered their biggest daily loss since 1991 on Sunday after Saudi Arabia slashed its official selling price (OSP) and announced plans to raise crude production significantly, signaling the start of a price war.
Those moves came after Russia on Friday balked at OPEC’s proposed steep production cuts to stabilize prices hit by economic fallout from the coronavirus.
Saudi Arabia said it plans to boost crude output above 10 million barrels per day (bpd) in April after the current deal to curb production between OPEC and Russia - known as OPEC+ - expires at the end of March, two sources told Reuters on Sunday.
Saudi Arabia on Saturday slashed official crude selling prices for April, in a sudden U-turn from previous attempts to support the oil market as the coronavirus hammers global demand. The move came after OPEC talks collapsed Friday, prompting some strategists to see oil prices crater to $20 this year.
International benchmark Brent crude futures plummeted 30% to $31.02 per barrel, its lowest level since Feb. 2016. U.S. West Texas Intermediate crude dropped 27% to $30 per barrel, also its lowest level since Feb. 2016.
That puts Brent and WTI on track for their second biggest daily percentage drops in history behind declines for both in January 1991 over 30%.
Reference: Worldometers, CNBC, Reuters
Thai
Eng