· CORONAVIRUS UPDATES:
→ Total confirmed cases: More than 134,540
→ Total deaths: At least 4,971
→ The coronavirus COVID-19 is affecting 127 countries and territories around the world and 1 international conveyance (the Diamond Princess cruise ship harbored in Yokohama, Japan).
→ US cases: At least 1,716 (+415), and deaths: 41 (+3)
→ Italy cases: At least 15,113 (+2,651), and deaths: 1,016 (+189)
→ Iran cases: At least 10,075 (+1,075), and deaths: 429 (+75)
- Markets suffer record meltdown as global coronavirus alarm grows
Global markets suffered record falls on Thursday as alarm over the coronavirus intensified, and governments from Ireland to Italy unveiled new measures to try to slow the spread of a disease that has infected more than 130,000 people worldwide.
- Four towns locked down as Spain announces package to tackle coronavirus
Spain placed four towns under quarantine on Thursday and announced measures to tackle the economic impact of the coronavirus epidemic, which the country’s hoteliers described as a “tsunami” threatening the survival of their businesses.
- The new restrictions in Italy, the most severe controls placed on a Western nation since World War Two, came after confirmed cases rose to 12,462 on Wednesday, from a previous 10,149, with the death toll jumping by 196 in 24 hours to 827.
The country’s 60 million people are under lockdown. “We will only be able to see the effects of this great effort in a couple of weeks,” Prime Minister Giuseppe Conte said.
- German Chancellor Angela Merkel said up to 70% of the population was likely to be infected as the virus spreads around the world in the absence of a cure.
- U.S. House leaders unveil coronavirus bill; Capitol tours suspended
Democrats in the U.S. House of Representatives on Wednesday unveiled a broad package of proposals to help Americans affected by the coronavirus outbreak, while officials suspended public tours through the Capitol building.
The legislation, which Democratic leaders aimed to rush to the House floor for debate and passage on Thursday, would grant workers 14 days of paid sick leave and up to three months of paid family and medical leave, a summary of the bill shows.
Other provisions in the 124-page “Families First Coronavirus Response Act” introduced late on Wednesday include unemployment insurance to furloughed workers and hundreds of millions of dollars in additional funding for children’s, seniors’ and other federal nutrition programs.
An additional $500 million would be provided to help feed low-income pregnant women or mothers with young children who lose their jobs or are laid off because of the virus outbreak.
Another $400 million would help local food banks meet increased demand.
The legislation also would guarantee free coronavirus testing for anyone who requires it, including uninsured people.
- As Trump's stock market gains shrink, he says it will 'work out fine'
For three years, U.S. President Donald Trump has touted a stunning run-up in the stock market as evidence of his success in the White House. In the space of three weeks, most of those gains have evaporated.
As the coronavirus pandemic spreads fear of a recession, the stock market’s rise under the Republican president, a major part of his case for reelection in November, is now less than half of the gain of his predecessor and rival Barack Obama at the same point in his presidency.
At its peak on Feb. 19, the S&P 500 .SPX was up 58% from when Trump unexpectedly beat Democratic rival Hillary Clinton in November 2016. As of Thursday, Trump's stock market was up just 17%. The S&P 500 gained 41% in same number of days after Obama was elected president in 2008.
Measuring from Trump’s inauguration on Jan 20, 2017, the S&P 500 is now up less than 10%, compared to a gain of 70% under Obama during the same span of his first term.
Trump, who has repeatedly boasted on Twitter and to reporters of the stock market’s performance in recent years, on Thursday played down the carnage wracking Wall Street.
- United to scale back flights to Europe after March 19
United Airlines Holdings Inc (UAL.O) said on Thursday it will continue to fly its regular schedule from Europe to the United States through March 19 but is scaling back flights after that date.
United said it is continuing to monitor travel demand, which has fallen sharply as the coronavirus spreads globally and is expected to decline even more once U.S. restrictions on travel from Europe take effect after Friday.
· Euro falls after ECB holds fire, dollar jumps as spreads widen
The euro weakened on Thursday after the European Central Bank announced more stimulus to fight the coronavirus impact but did not lower interest rates, with the single currency falling to the day’s low as investors rushed for dollars.
The ECB approved fresh stimulus measures on Thursday to help the euro zone economy cope with the growing cost of the coronavirus epidemic, but kept interest rates unchanged in a move that may disappoint financial markets.
The euro, down before the announcement, jumped briefly to $1.13 but then skidded to as low as $1.1198, down 0.5% on the day.
Market watchers had expected an ECB cut to the main deposit rate of 10 bps. A press conference is due at 1330 GMT in Frankfurt.
The dollar rebounded sharply after the ECB announcement, and was last up 1.1% against a basket of currencies at 97.60.
Analysts said the dollar had rallied as swap spreads on major currencies blew out and investors scrambled for the U.S. currency.
Money markets are now expecting another 100 bps of easing from the Fed by next week taking the benchmark policy interest rates to zero after a hefty half point rate cut last week.
The Japanese currency climbed 0.5% versus the greenback to 103.98 yen, below a four-year high of 101.28 hit on Monday. The Swiss franc climbed but then fell and was last down 0.2% at $0.94.
· ECB ramps up stimulus for virus-hit Europe but keeps some powder dry
The European Central Bank rolled out yet another stimulus package on Thursday to help fight off the coronavirus pandemic but kept some of its powder dry, putting the onus firmly on governments and sending markets into a tailspin.
Warning that Europe faced a “major shock” which would disrupt life, ECB chief Christine Lagarde offered a range of liquidity facilities aimed at businesses, which are likely to be hit hard by coronavirus, in the hope of mitigating a crisis that could plunge the 19-country euro zone into recession.
But unlike its U.S. and UK counterparts, the ECB held back on cutting rates and sources close to the discussion said that a cut was not proposed on Thursday, even though markets had fully priced in a move.
As part of its measures, the ECB will provide banks with loans at a rate as low as minus 0.75%, below the -0.5% deposit rate and so essentially a rebate, and increase bond purchases by 120 billion euros this year, with a focus on corporate debt.
But investors, who had bet the ECB could cut rates at least 10 basis points and possibly more, were disappointed.
· China’s central bank to cut rates soon, analysts predict
China’s central bank is expected to cut key rates soon, following a directive from a meeting led by the country’s second-in-command, Premier Li Keqiang.
In an announcement on Wednesday, the country’s leaders stressed the need for improving financial support for businesses hit by the new coronavirus, including lowering the reserve requirement ratio (RRR) — the amount that banks need to keep on hand.
“Without exception these calls by the Premier will be implemented by the (People’s Bank of China) almost immediately, so we expect the PBOC to announce a targeted RRR cut in the next few days, possibly before or over the coming weekend,” Ting Lu, chief China economist at Nomura, said in a note Thursday.
“We expect (the RRR cut will be) 50 (basis points) for the biggest six state-owned banks, and 100bp for other banks including joint-stock banks, city and rural commercial banks, and rural credit unions,“ Lu said.
He added that in the coming months, he expects 25 basis-point cuts each to the 1-year benchmark deposit rate and 1-year medium-lending facility (MLF) rate. The two rates are tools used by the Chinese central bank to manage liquidity in the banking system.
· Oil falls 7% after Trump surprises with travel curbs
Brent crude slid 7% on Thursday after President Donald Trump restricted travel to the United States from Europe as part of measures to try to halt the spread of coronavirus after the World Health Organization described the outbreak as a pandemic.
A flood of cheap supply coming onto the market from Saudi Arabia and the United Arab Emirates compounded pressure on prices. The Gulf Arab producers are raising production as they go on the offensive in an oil price war with Russia.
Brent crude LCOc1 was down $2.57, or 7.2%, at $33.22 a barrel while U.S. West Texas Intermediate Texas crude CLc1 was down $1.48, or 4.5%, at $31.50.
Global equities plunged and the Dow Jones index was on course for its worst performance since Wall Street’s “Black Monday” crash of 1987 after Trump announced the travel restrictions.
Prices pared losses briefly after the Federal Reserve Bank of New York said it would increase Treasury purchases and introduce new repo operations, but the bounce faded quickly across markets.
· Oil prices will keep falling until Russia or Saudi Arabia hit ‘pain point,’ says former White House aide
The price of oil is likely to fall “much lower from here,” according to Bob McNally, who was energy advisor to former U.S. president George W. Bush.
The oil rout started on Monday, plunging over 20% following a disagreement on production cuts between OPEC and its allies. Russia declined to lower output last week, and Saudi Arabia announced Saturday that it will offer discounts to its official selling prices next month. The kingdom, the de facto leader of OPEC, is also planning to raise production, together with the United Arab Emirates.
Despite the market turmoil and resultant losses, Saudi Arabia will not cut production unilaterally, said McNally, founder of oil consultancy Rapidan Energy Group.
“Prices of oil are going much lower from here,” said McNally told CNBC on Thursday. “Everybody’s got a pain point and we’re going to go down and test it.”
Reference: Reference, CNBC, Worldometers
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