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Live Q&A – your questions answered as coronavirus licensing scheme opens
UK companies rely on the government job retention scheme to cover the cost of firing millions of workers. As the plan goes live, the Financial Times wants to listen to the experiences of readers using it.
Claer Barrett, FT’s personal finance editor, and Dan Thomas, executive news editor, will be participating in a live Q&A with readers at 12 noon today.
Know more here.
Hong Kong steps in to defend dollar fixation
Hudson Lockett in Hong Kong
Hong Kong’s de facto central bank stepped in to defend its currency’s peg to the U.S. dollar on Monday, selling $ 200 million of the territory’s currency after it reached the strong end of its trading band for the first time in more than four years thanks to the demand-driven coronavirus.
The intervention of the Hong Kong Monetary Authority caused the Hong Kong dollar to weaken to HK $ 7.7498. The coin is administered in a narrow band of HK $ 7.75 to HK $ 7.85 per US dollar. Its link to the dollar, established in 1983, is considered the cornerstone of the financial stability of the territory.
The recent gains for the Hong Kong dollar are the result of a widened differential between the Hong Kong interbank offered rate and the Libor rate. The relatively higher yield available in Hong Kong has spurred demand for the Asian financial center’s currency as investors seek higher returns after unprecedented cuts in interest rates from the US Federal Reserve. USA Earlier this year intended to cushion the economic blow from the coronavirus pandemic.
More than 1.8 million people make new claims for benefits during closing
Delphine Strauss in London
More than 1.8 million people have filed new claims for benefits through the universal credit system since the beginning of March, when the coronavirus crisis began to hit the UK labor market, the Department for Work and Pensions said on Tuesday.
According to the data, five times as many people sought help through the benefits system compared to the same six weeks through April 12 of last year.
The daily rate of claims began to increase in early March, but increased after March 16, when the government first introduced social distancing measures, management data released by DWP showed. It peaked at over 100,000 on a few days in late March. While the volume of claims has now decreased, it is still running above normal levels, DWP said.
Three million people had claimed universal credit before the UK shutdown began to affect jobs in mid-March, the latest official statistics show. However, the DWP workload will not necessarily increase as much as these numbers imply, as some people who have filed claims will not receive benefits, for example if their employer has put them on the government’s leave plan, or if they are claiming due to reduced income, rather than after losing their job.
Although the UK labor market entered the crisis is a solid position, with employment at record levels, data released by the Office for National Statistics on Tuesday showed that wage growth had slowed and the number of job openings decreased before the measures of social distancing began to decrease.
The government’s Find a Job website now shows less than half the number of vacancies it showed in early March.
DWP said people who made claims when the blockade began would receive payments starting Wednesday, and at least 93 percent are expected to receive them in full and on time.
Air pollution linked to Covid-19 deaths, Cambridge investigation finds
There is a link between living in regions with high levels of air pollution and the severity of Covid-19 infections, according to research by scientists from the University of Cambridge, adding to the growing body of academic literature that connects the quality of air and coronavirus-related deaths.
Research suggests that people living in highly polluted areas are at increased risk of dying from coronavirus, as the disease is likely to affect patients’ lungs more acutely. Regular, long-term exposure to air pollutants has been shown to worsen health conditions such as cardiovascular disease, diabetes, chronic respiratory disease, and cancer, which data says are related to the most severe cases of Covid-19.
In England, the highest number of Covid-19 deaths occurred in London and the Midlands, where the highest levels of nitrogen dioxide are concentrated, the researchers found. Ground-level nitrogen and ozone oxides from car exhaust gases and burning fossil fuels can cause a persistent inflammatory response and increase the risk of viral infection, they noted.
The study, which has not yet been peer-reviewed, analyzed data on the total number of cases and deaths of Covid-19, against levels of three main air pollutants at 120 sites in the UK, collected between the years 2018 and 2019, when no coronavirus cases had been reported.
Coca-Cola loses its fizz as sales volumes drop 25%
Alistair Gray
Coca-Cola volumes have decreased by a quarter so far this month, showing how the coronavirus blockade is affecting even those companies that Wall Street generally considers less vulnerable to recessions.
The $ 200 billion group said that while it received an initial boost from customers who stored beverages at home, sales were affected by the closure of bars, restaurants and stadiums. Such “out-of-home channels” account for about half of your income.
Net sales in the three months through the end of March decreased 1 percent from a year earlier to $ 8.6 billion, while operating profit fell 2 percent to $ 2.38 billion. However, in a sign that the impact will be greater in the current quarter, Coca-Cola said that since the beginning of April, volumes have fallen about 25 percent. Almost all of the decline was in
channels away from home.
Although it could not quantify the impact of the annual results, Coca-Cola said that the effects of the closure would be “material” in the second quarter.
James Quincey, president and CEO, said in a statement:
We have already gone through difficult times as a company, and we believe that we are well positioned to manage and emerge stronger.
Coca-Cola’s portfolio includes Schweppes, Fanta and Appletiser, as well as their eponymous brands. It bought Britain’s Costa Coffee chain for £ 3.9bn in a 2018 deal.
Oil shocks hit exporters of Brent and emerging market currencies
Eva Szalay, foreign exchange correspondent
The unprecedented collapse in oil prices has affected the currencies of oil-exporting countries, particularly in emerging markets where the ruble caused losses against the dollar.
The Russian currency weakened 1.6 percent against the dollar and fell 1.4 percent against the euro, after investors reacted to oversupply in oil markets that had pushed prices on some negative contracts. In addition to the supply shock, the demand for oil has also decreased due to the global economic shutdown due to the coronavirus.
The Norwegian crown and the Canadian dollar also suffered, with the Scandinavian currency losing nearly one percent against the euro. The Canadian dollar fell 0.75 percent against its US peers, while the Mexican peso weakened 0.9 percent.
Chris Turner, global head of currency research at ING Bank in London, said that the currencies of oil-exporting countries should continue to suffer, particularly in emerging markets, until oil prices stabilize.
“The volatility of oil-exporting FX is expected to remain high against oil importers in the coming weeks,” Turner said.
Spain registers a slight increase in the last daily number of deaths Covid-19
Daniel Dombey in Madrid
The number of coronavirus deaths in Spain has increased slightly in the last 24-hour period, after reaching one-month lows in the previous two days.
A total of 430 people who tested positive for Covid-19 died within 24 hours until 9 p.m. Monday, bringing the country’s death toll to date to 21,282, government figures released Tuesday revealed.
This represented an increase in Monday’s daily total of 399, but it still represented the second-lowest figure since March 22 and is well below the early April peak of 950 deaths per day.
The number of confirmed cases reached 204,178, 2 percent more than Monday’s figure.
Fernando Simón, the doctor who helps lead Spain’s efforts against the coronavirus, added that the daily increase of about 4,000 new cases was about 1,000 a day less than a week ago.
Spain has the highest number of confirmed cases of coronavirus after the US. USA, where there have been almost 800,000 cases.
Shares fall when Brent falls below $ 20
European stocks and US futures. USA They extended their losses as the collapse of the oil price accelerated.
The Stoxx Europe 600 Index was recently 2 percent lower, while London’s FTSE 100 was down 1.7 percent.
On Wall Street, S&P 500-linked futures fell 1.1 percent, after a 1.8 percent decline on Monday.
Brent crude fell as low as $ 18.10, a decline of $ 7.50, or 29 percent, its lowest level since late 2001. It was just below $ 21 a barrel recently, in choppy trading.
“Not for the first time, equity markets have been hurt by falling oil prices,” analysts at Jefferies said.
Just as risk aversion was reversing and high-yield inputs and stocks were recovering, an episode of risk aversion will again undermine sentiment.
Zew poll shows ‘light at end of very long tunnel’ as perspective improves
Martin Arnold in Frankfurt
German investor sentiment about the prospects for Europe’s largest economy has improved as the country began lifting its coronavirus blockade on homes and businesses, according to a survey published Tuesday.
While Zew’s survey of financial market experts found sentiment on the economic outlook had rebounded after suffering a record drop in March, investors’ assessment of the current climate worsened to levels last seen in the crisis. 2008 financial statement.
The closure of many companies and schools, event cancellations, border closings and travel restrictions for workers have frozen a lot of economic activity in Europe and many predict that the region will suffer its worst recession in decades in this year.
“Financial market experts see the light at the end of the tunnel, a very long tunnel,” said Achim Wambach, Zew’s president.
He added that investors predicted positive growth would return to Germany in the third quarter, but that the economy would not fully recover until 2022.
The measure of investor sentiment from Zew’s survey on the economic outlook for the German economy increased by 77.7 points to reach 28.2 in April.
However, sentiment about the current economic situation in Germany decreased by 48.4 points to minus 91.5.
Singapore extends closure until June
Stefania Palma in Singapore
Singapore will extend its one-month blockade, which ends on May 4, until June 1, when the city state fights an increase in coronavirus cases caused by infections in dormitories of foreign workers.
“This short-term pain is eliminating the virus, protecting the health and safety of our loved ones and allowing us to revive our economy,” said Lee Hsien Loong, Prime Minister of Singapore, during a national speech.
He added that the country is tightening distancing measures for at least the next two weeks by closing more workplaces and applying stricter entry restrictions at meeting points such as food markets.
Lee said reducing the number of patients who show no link to previously reported cases was also a priority. “This suggests that there is a larger and hidden pool of cases in the community,” he said.
Singapore reported 1,111 new infections on Tuesday, most of which were linked to residences for foreign workers. The country has 9,125 cases, the highest number in Southeast Asia.
The price of Brent crude fell below $ 20 a barrel for the first time in 18 years, falling more than a quarter on Tuesday due to demand fears caused by oil markets from the coronavirus pandemic by second day.
Brent recently changed hands to $ 18.10, $ 7.50, or 29 percent, its lowest level since late 2001.
The price of the US oil marker WTI fell below zero for the first time on Monday as the pandemic crushed demand and raised storage concerns over excess oil being produced that is not necessary for stifled economies.
On Tuesday, the May contract returned to negative territory with less than $ 7, while the more-traded June contract fell 30 percent to just over $ 14.
England and Wales register 75% more deaths weekly than normal
Chris Giles in London
The number of death records in England and Wales was 75 percent higher than normal in the week ending April 10, the Office for National Statistics said Tuesday.
The statistics office said 18,516 deaths were recorded in that week, representing people who died compared to 10,520 on average in the past five years.
With similar figures for Scotland and Northern Ireland released in recent days, and the ONS warned that the number could be underestimated as records generally drop over the Easter weekend, the figures show the large increase in mortality linked to the outbreak. of coronavirus.
The figures include people who died from all causes. In the same period, the ONS said 6,213 death certificates mentioned Covid-19 on death certificates, although there is increasing evidence that many of those who died outside of hospitals with the disease did not have it recorded in their certificates.
The figures are significantly higher for the period than those announced daily by ministers of those who died in hospitals after testing positive for coronavirus, and suggest that the number of people who have died directly or indirectly from the disease to date amounts to tens of thousands.
The crisis in nursing homes was also uncovered in the numbers with the number of weekly death records doubling from 2,471 in the second week of March to 4,927 in the second week of April.
The EU considers how to boost the tourism industry
Javier Espinoza in Brussels
Thierry Breton, EU commissioner for the single market, has said the tourism sector was the first to take the hit of the pandemic and will be “the slowest to recover.”
However, he also warned that it was still too early to reopen the industry as Europe continues to fight the pandemic.
Speaking virtually to the European Parliament, he said that boosting tourism on the continent, where roughly half of the world’s activity comes from, was the commission’s “priority”.
“Tourism has the highest priority by far, we are paying a lot of attention in this initial first phase,” he said, stressing that the bloc needs to make sure that the epidemic is under control.
He said the commission was working on a recovery plan so that countries that rely heavily on tourism can open their beaches and coastal spaces in time for the tourist season.
But he added that “sufficient guarantees” were needed before “everything could be restarted.”
Coronavirus ‘reproduction rate’ increases in Germany as new cases decline
Guy Chazan in Berlin
Germany has seen a small increase in the number of people infecting a person with Covid-19, but said the daily increase in coronavirus cases is decreasing.
Lars Schaade, vice president of the Robert Koch Institute, said the “reproduction rate,” the extent to which a person with Covid-19 spreads the disease, has increased from 0.7 last week to 0.9.
Last week, Germany experienced the largest increase in the number of deaths from Covid-19, he said, and the proportion of deaths from confirmed cases rose to 3.2 percent. However, that was still much lower than the index in other countries, Schaade added: in the US. USA It is 5.4 percent, in Spain it is 10.4 percent and in Italy 13.2 percent.
“Last week we managed to get a much smaller daily increase in the number of cases compared to the previous week,” he told reporters.
But Mr. Schaade said that “there was no end to the epidemic in sight.” He insisted that the Germans must comply with the rules of social distancing that he said: “The virus is not gone and the number of cases may increase again.” They should stay home if possible, keep a distance of at least 1.5m from each other and wear masks at work, in stores and on public transportation, he warned.
John Lewis to review strategy after sales drop a fifth year to year
Jonathan Ely in London
John Lewis said he will accelerate an existing strategic review of the business after the closure of his department store caused a nearly fifth drop in sales.
The review “will seek to take into account changes in consumer behavior to emerge from the pandemic, such as a more pronounced change to the network and a desire to shop more sustainably.”
The company, which is owned by its employees or partners, said a nearly doubling of online sales at John Lewis had not been enough to offset the impact of store closings, so overall sales fell 17 percent. since mid-March. . Consumers are “buying more Scrabble but fewer sofas,” said society president Sharon White.
Its worst-case scenario for the whole year is a decrease in sales of around 35 percent in John Lewis, around double the current level. Even at the Waitrose supermarket chain, where sales are currently 8 percent higher year-over-year, revenue would drop slightly throughout the year.
Dame Sharon, who assumed the presidency just before the pandemic hit the United Kingdom, said in a letter to partners that the group had “survived a world war and bombings, economic shocks and crises.” Thanks to you, we will also go through COVID-19 and come out stronger. ”
Although the company started the year with £ 900 million in cash and cash equivalents, and £ 500 million of non-withdrawn lines of credit, it is reducing the inflow of shares, cutting nearly £ 100 million from its marketing budget, and reducing capital spending on £ 200 million.
Around 14,000 of its department store staff are suspended under the UK government’s job retention scheme, while the commercial fee holiday will save around £ 135 million.
The price of oil in the United States is close to zero
The US benchmark oil index USA It has been hovering on both sides of zero this morning as operators continue to download the May contract before it expires.
West Texas Intermediate for delivery next month was recently trading at – $ 1.82 a barrel after jumping both sides out of nowhere in European and Asian trading after yesterday’s historic loss, which fell as low as minus $ 40 a barrel .
The coronavirus pandemic has reduced demand for crude oil by as much as a third, and with the world’s major economies remaining blocked and inadequate space to store it, merchants rushed to unload contracts to be delivered in the next month instead of purchasing the physical product.
Market attention is now turning to the WTI contract for June delivery, which has fallen 4.7 percent to $ 19.49 a barrel this morning, having managed to hold above $ 20 yesterday. Analysts are divided as to whether it will face a similar sale or whether an increase in demand may support the price.
“With signs of a possible easing of containment measures against Covid-19, the expiration of next month’s WTI may not see such intense selling pressure,” said Ann-Louise Hittle of Wood Mackenzie.
Brent crude, the international benchmark, fell 14 percent to $ 22 a barrel.
Iran executes juvenile offender after jailbreak
Najmeh Bozorgmehr in Tehran
A juvenile offender who attempted to escape from an Iranian jail along with 73 other inmates during the coronavirus pandemic was executed on Tuesday morning.
Shayan Saeedpour had been sentenced to death in the northwestern city of Saqqez, home to the Kurdish ethnic minority, accused of murder five years ago when he was 17 years old.
But his escape and his subsequent recovery caused the Islamic Republic authorities to speed up his execution, which had been delayed as a result of pleas from human rights groups.
Since March, Iran has given permission to around 100,000 prisoners to protect them against Covid-19. This did not include those who were categorized as “dangerous” to public safety.
Another prisoner in Saqqez, Mostafa Salimi, 51, accused of murder and armed robbery, was executed earlier this month for allegedly planning to flee on March 27. Iranian authorities say that all prisons were quickly controlled and security was restored.
The death toll in Iran reached 5,297 on Tuesday from 5,209 a day ago, while 3,357 people are in critical condition. The head of the Iranian Blood Transfusion Organization, Dr. Peyman Eshghi, expressed regret that of more than 84,802 people who tested positive in Iran, only 400 donated plasma.
“Our people still don’t believe how important plasma donation can be to us,” he said.
UK hospital chiefs warn against wearing public masks
Jim Pickard and Sarah Neville in London
UK health chiefs warned the government that ordering the general public to wear face masks would jeopardize their availability to key workers in hospitals battling the coronavirus pandemic.
The intervention came when government scientists in the “Sage” advisory group debated Tuesday whether to recommend the public to wear basic masks.
Chris Hopson, executive director of NHS Providers, which represents hospital, mental health, community and ambulance services, said such a recommendation should only be made after a full analysis of the impact on the National Health Service.
“Liquid repellent masks for health and care personnel are key to safety and to preventing the spread of the coronavirus,” it said in a statement.
Securing the supply of masks, when there is great global demand, is crucial. . . There must be clear evidence that wearing masks. . . it will provide benefits significant enough to take us off the blockade and jeopardize the supply of NHS masks.
Read the full story here.
The global cases of Covid-19 amount to 2.42 m
Steve Bernard in London
New global daily Covid-19 cases increased by 73,928 on Monday, totaling 2.42 million. The daily increase in cases has slowed in the past four days, the first time this has happened since mid-February, according to Worldometers data.
The death toll worldwide increased by 5,366 yesterday, to reach 157,339. This figure is lower than last Monday, raising hopes for a worldwide slowdown in the spread of the Covid-19 virus.
The United States also shows signs that the worst may have happened as the number of deaths rose by the lowest number in a week. There were 1,528 deaths on Monday, bringing the country’s total to 37,555, according to data from the Covid Monitoring Project.
The UK saw a significant drop in the number of deaths recorded yesterday at 449, the lowest in 14 days. However, the number of Covid-19 diagnoses in patients has remained consistently high, around 5,000 per day for the past 11 days. The total number of confirmed cases now is 124,743.
The number of cases recovered worldwide increased by 21,230 yesterday, leaving a total of 646,328 free of the virus.
Russia’s coronavirus cases exceed 50,000
Henry Foy in Moscow
Russia reported 5,642 new cases of coronavirus on Tuesday, as authorities warned of at least one more week of increases.
The 12 percent increase in Covid-19 infections brings Russia’s total to 52,763. The country has registered 456 deaths from the virus.
The number of new cases in Russia fell on Monday for the first time in eight days, raising hopes that the outbreak was slowing down.
But late Monday, Veronika Skvortsova, director of the country’s medical agency, said the cases were likely to peak at the beginning of next week.
The mutation map is key to controlling the pandemic
Clive Cookson in London
Scientists studying mutations in the coronavirus have deciphered more than 10,000 different genomes of the deadly pathogen, creating a comprehensive map that will be crucial in controlling the pandemic and developing drugs to treat it.
Since the first viral sample was analyzed in the Chinese city of Wuhan in December, international research teams have used phylogenetics to create a vast family tree of the Sars-CoV-2 virus responsible for Covid-19, revealing how it spread since the outbreak. center to all corners of the world in a short space of time.
The mutation map will be used to understand any subsequent waves of the virus if and when the current outbreak can be controlled, and the development of the drugs and vaccines that will allow that to happen.
Read the full story and see the charts here.
Oktoberfest canceled due to Covid-19
Guy Chazan in Berlin and Olaf Storbeck in Frankfurt
Bavarian authorities have shut down Oktoberfest, one of the world’s most popular festivals, due to the coronavirus pandemic.
Markus Söder, Prime Minister of Bavaria, said the decision was “painful, a terrible pity”. But it was clear that the risk of infection at an event featuring huge beer tents filled with people was too high, as it would be “impossible to keep your distance and work with face masks,” added Söder.
Dieter Reiter, the mayor of Munich, said it would be a major economic blow to the Bavarian capital. The event will run from September 19 to October 4 and is expected to attract 6 million visitors from around the world, according to city estimates.
Despite growing calls from medical professionals, officials in Munich have been delayed in recent weeks in deciding to cancel the € 1.2 billion event.
Para muchos, el destino del Oktoberfest se selló la semana pasada cuando la canciller Angela Merkel y los primeros ministros de las 16 regiones de Alemania acordaron que todos los eventos públicos importantes como ferias y carnavales deberían permanecer prohibidos hasta finales de agosto.
Desde su inicio en 1810, el Oktoberfest ha sido cancelado 24 veces, incluidas dos veces debido a epidemias de cólera en 1854 y 1873.
Un estudio muestra que solo el 6% de la población francesa infectada con coronavirus
Victor Mallet en Paris
Según el nuevo estudio que sugiere que el levantamiento de las medidas de confinamiento debe ser cuidadosamente administrado para evitar un nuevo aumento de hospitalizaciones y enfermedades infecciosas, solo el 6 por ciento de la población francesa habrá sido infectada con coronavirus para el final planeado de un cierre nacional el 11 de mayo. muertes
Más de 20,000 personas ya han muerto de infecciones por Covid-19 en Francia desde principios de marzo.
El análisis matemático y estadístico realizado por el Institut Pasteur, Public Health France y el CNRS dijo que en la región de París y el este de Francia, que han sido las áreas más afectadas por la pandemia, la tasa de infección es de alrededor del 12%, el doble de la tasa nacional. .
El Institut Pasteur dijo que el nivel de inmunidad del 6% en todo el país “estaba muy por debajo del nivel necesario para evitar una segunda ola si se levantaran todas las medidas de control. De hecho, el nivel de inmunidad colectiva requerido se estima actualmente en un 70%. Por lo tanto, será necesario mantener mayores esfuerzos más allá del 11 de mayo para evitar el resurgimiento de la epidemia ”.
Según el documento, el R0, el número que indica cuántas personas en promedio están infectadas por un portador de Covid-19, había caído de 3.3 al comienzo del confinamiento a mediados de marzo a 0.5 ahora.
Los resultados mostraron que en Francia los infectados tenían un 2.6 por ciento de posibilidades de ser hospitalizados, lo que aumentó al 31 por ciento para los hombres mayores de 80 años. La tasa de mortalidad general fue de alrededor del 0,5 por ciento, y aumentó al 13 por ciento para los hombres mayores de 80 años. Los hombres tenían un 45 por ciento más de probabilidades de morir que las mujeres, y la diferencia de género aumentó con la edad.
Imagen: Institut Pasteur France
Ejecutivo del BCE cuestiona la respuesta fiscal a la crisis
Martin Arnold en Frankfurt
Un alto ejecutivo del Banco Central Europeo dijo que la respuesta fiscal de la eurozona a la crisis del coronavirus ha sido desigual e inadecuada, advirtiendo que corre el riesgo de erosionar el apoyo a la UE y la confianza en la moneda única.
Fabio Panetta dijo que el BCE había calculado que “las interconexiones de la cadena de suministro multiplicarán el daño de los bloqueos de coronavirus”, estimando que una disminución del 15 por ciento en el PIB en los principales países de la eurozona causaría una caída del 20 por ciento en la producción de todo el bloque.
“Solo si todas las economías actúan con la fuerza necesaria para contener la recesión, la pérdida de producción para toda la eurozona se minimizará”, dijo Panetta, escribiendo en Politico el martes por la mañana.
Cualquier percepción de que la acción común está ausente en tiempos de crisis desesperada diluiría el apoyo público a la Unión Europea, un efecto que ya es visible en los países en primera línea de la crisis de salud.
Al señalar que el comercio dentro de la eurozona representaba el 45 por ciento del PIB del bloque, Panetta dijo:
Los países menos afectados por la pandemia han promulgado las mayores respuestas fiscales, mientras que los países más afectados han tomado los pasos más pequeños ”.
Los líderes de la UE debatirán el jueves las opciones para financiar conjuntamente la respuesta fiscal a la crisis del coronavirus. El presidente francés, Emmanuel Macron, dijo en una entrevista con el FT la semana pasada que los niveles desiguales de ayuda estatal de la UE en respuesta a la pandemia habían puesto al descubierto una “distorsión” normalmente prohibida por los tratados del bloque.
Las aseguradoras trabajan juntas para mejorar la respuesta ante una pandemia futura
Oliver Ralph en Londres
Algunos de los nombres más importantes en seguros del Reino Unido, incluidos Stephen Catlin, Maurice Tulloch y Stephen Hester, se han unido para descubrir cómo la industria puede responder mejor a futuras pandemias.
Insurers have come in for criticism over the past few weeks after it emerged that many businesses will not be able to claim on their insurance policies for the costs of the crisis. Standard business interruption insurance tends to exclude pandemics.
Mr Catlin, who made his name in Lloyd’s of London and set up a new insurer called Convex last year, is leading the new group. He is joined by Mr Tulloch and Mr Hester, the chief executives of Aviva and RSA – two of the UK’s biggest insurance companies – respectively.
Julian Enoizi who runs Pool Re, the government-backed terrorism insurer, is also on board. Pool Re is owned by the insurance industry but the government provides a financial backstop in case of major terror attacks. It could provide a model for a future pandemic insurance vehicle.
Mr Catlin said that the industry had to be “on the front foot in the current situation.”
He added: “Most importantly we need to find an industry solution for future pandemics and this group has many years of combined industry experience.”
Italy expects to begin easing lockdown in early May, Conte says
Miles Johnson
Italy’s government will later this week outline a plan to reopen the country by the first week of May, its prime minister Giuseppe Conte said on Tuesday.
“Over the next few days we will analyse this reopening plan in depth and go into all the details,” Mr Conte said in a Facebook post. “Before the end of this week, I look forward to communicating this plan to you and explaining the details of this complex program. A reasonable expectation is that we will implement it from May 4”.
Italy was the first European country to implement a full-scale national lockdown, which has been in place since March 10.
Mr Conte said that the reopening programme would be based on advice from a group of technical experts but that the final decision would be taken by the Italian government. “In the end, we will take responsibility for the decisions, which are the responsibility of the government and which certainly cannot be left to the experts,” he said.
The Italian prime minister also cautioned that it would not be possible to instantly reopen the Italian economy, even as the number of new diagnosed Covid-19 cases has been slowing for several weeks.
“Many citizens are tired of the efforts made so far and would like to see a significant relaxation of these measures or even their total end,” Mr Conte said. “I would like to say: let us reopen everything. I would like to say: let us reopen everything. We can start again in the morning… But such a decision would be irresponsible”.
What you may have missed
President Donald Trump said he would suspend immigration into the US in an effort to curb the spread of coronavirus and protect American jobs, as the country reels from the economic impact of the pandemic.
A senior World Health Organization official warned that any lifting of lockdowns aimed at containing the spread of Covid-19 needed to be gradual because containing the disease would take time.
The price of US oil has clawed back above zero after plunging into negative territory for the first time as the coronavirus pandemic crushed demand in global energy markets.
The White House and congressional leaders are “down to the fine print” in their negotiations to increase funding for small US businesses devastated by the coronavirus pandemic, setting the stage for a Senate vote as soon as Tuesday.
Australia’s second-biggest airline Virgin Australia entered administration following its failure to secure a A$1.4bn ($886m) bailout from the government, becoming the nation’s highest-profile corporate victim of the coronavirus crisis.
Spain’s deputy prime minister for the economy has urged EU leaders to approve up to €1.5tn in grants, while Poland’s finance minister has said that the EU should give itself new tax-raising powers and clamp down on tax havens in response to the economic blow dealt by the pandemic.
European markets fall as US oil turns negative again
European stocks slid in early trading on Tuesday, with energy stocks under pressure as the US oil marker slipped back into negative territory.
London’s FTSE 100 opened 1.5 per cent lower, while the regional benchmark Stoxx 600 index was down 1.2 per cent. Oil and gas companies suffered, with BP and Royal Dutch Shell each down more than 4 per cent.
WTI crude oil for delivery next month was changing hands at -$4 a barrel in morning trading in Europe, after closing in the previous session at -$37.63. It had recovered into positive territory during the overnight Asian session. Brent crude, the international benchmark, was down 7 per cent at $23.70.
Primark expects lower selling prices on some items once stores reopen
Jonathan Eley
Fashion retailer Primark has taken a £284m writedown to reflect the likely lower selling value of some clothing items once its stores reopen.
The group said it chose to mark down the value of the items after it “carefully reviewed the inventory on hand”.
Its entire worldwide estate of 375 stores is currently closed and the group does not sell online, resulting in a monthly cash outflow of £100m, according to half-year results from parent company Associated British Foods.
“Much as I would love to be allowed to reopen Primark stores…I know that we must not do so until we have suppressed this disease,” said chief executive George Weston.
“And when we are allowed to reopen we must make our Primark stores safe for our staff and our customers, even if that means ensuring there are fewer people shopping at any one time and so accepting lower sales at least until the remaining risk is minimal” he added.
“In time we can rebuild the profits. We can’t replace the people we lose”.
The group, which also produces sugar, food ingredients and groceries, said it has around £1.5bn of cash and credit facilities, but did not declare an interim dividend or provide any earnings guidance.
It said it had modelled the impact of Primark stores staying closed until May 2021, and also reopening then having to close again. “The cash flow consequences did not exhaust the financial headroom,” it said.
Fresh evidence virus spread is slowing in Germany
Tobias Buck in Berlin
Germany reported 1,785 new coronavirus cases on Tuesday, an increase of 1 per cent that took the total number of detected infections to 143,457 since the start of the outbreak.
According to official data from the Robert Koch Institute in Berlin, the number of deaths related to Covid-19 rose by 194 to 4,598.
The latest figures offer fresh evidence that German health authorities have succeeded in slowing the spread of the virus. It was the second day in a row that new cases rose by just 1 per cent over a 24-hour period, the slowest rate of increase since the beginning of the crisis.
More than 95,000 Covid-19 patients have recovered from the disease so far. Over the past week, Germany has seen more recoveries than new infections, which means that the number of active cases is now in steady decline, easing the pressure on hospitals and health authorities.
UK corporate news round-up
London Stock Exchange reported that total income has risen to £615m in the first quarter, up 13 per cent compared to last year, driven by increased equity trading and higher clearing activity across listed and over-the-counter products. LSE said that it is “too early” to comment on the impact of the virus on its results for the rest of the year.
Associated British Foods, the owner of Primark, said that they have made no sales from the clothing retailer since March 22 due to store closures, which usually brings in £650m a month. The group has reversed its position to not pay suppliers to preserve cash by pledging to buy garments yet to be finished, despite having written off £284m of stock already.
Wizz Air, the Eastern European low-cost carrier, said that it has been confirmed as an eligible issuer under the UK government’s Covid Corporate Financing Facility, a scheme for large companies to access loans for up to a year by the Bank of England buying their commercial paper.
Africa-focused Tullow Oil, struggling with the oil price collapse, announced that Rahul Dhir will take over as chief executive from the beginning of July. Paul McDade, the previous chief executive, resigned in December after the group slashed its production outlook.
Peugeot parent PSA reports 16% sales drop on virus-induced ‘chaos’
David Keohane in Paris
France’s PSA, which owns Peugeot, said sales dropped by around 16 per cent in the first quarter and forecast a steep decline in demand this year amid the “chaotic economic environment” caused by coronavirus.
The carmaker said that group revenue came in at €15.2bn in the first quarter, a drop of 15.6 per cent over the same period last year. It said auto sales were down a similar amount to €11.9bn, “driven by a sharp volume drop”.
“Having secured its liquidity and drastically cut its costs, the group now fully focuses on preparing the rebound in a chaotic economic environment,” said Philippe de Rovira, chief financial officer in a statement on Tuesday morning.
PSA said that it expects the auto market to fall this year by 25 per cent in Europe, 10 per cent in China, 25 per cent in Latin America and 20 per cent in Russia. The group did, however, keep its target of a 4.5 per cent automotive adjusted operating margin for 2019-2021 in place.
The carmaker is in the middle of thrashing out a merger agreement with Italian-American group FCA. Although bankers and analysts still think the deal will ultimately go through, they also think that the terms of the merger might well be re-negotiated due to the impact of coronavirus.
Bookings fall 70% at online travel agency eDreams
Alice Hancock in London
eDreams Odigeo, Europe’s second largest online travel agency, said bookings fell 70 per cent in March as the pandemic swept through Europe.
The Barcelona-based company said it had stress tested scenarios assuming no travel until 2021 as it shores up its balance sheet in order to outlast the global travel shutdown.
eDreams said that it had cut costs by around 25 per cent and waived its debt covenants in 2021. It has also taken advantage of government schemes to pay staff salaries.
Bookings at the end of 2019 had been 11 per cent ahead of the previous year and had continued to increase in January and February until coronavirus hit Europe, the group said.
Despite lower fixed cost bases than hotels or traditional travel agencies, the online platforms have been acutely affected by the crisis as international travel has almost entirely stopped.
Last week Booking.com, Europe’s largest online travel website, secured a $4bn loan and said that it would “probably” have to make redundancies. Expedia, which was already struggling with a turnover in management personnel, laid off around 3,000 staff in February.
US oil price back above zero
The benchmark US oil price has climbed back into positive territory after yesterday’s historic plunge, which saw it end the day at minus $37.63 a barrel — meaning traders were effectively paying to offload it after storage reached capacity.
The West Texas Intermediate contract for May delivery, which expires today, was trading at $1.36, up almost $40 from its close. The June WTTI contract was in better shape, trading at $21.36, up 4.6 per cent after also taking a hit in yesterday’s turmoil. Brent crude, the international marker was down 2.7 per cent at $24.88.
Yesterday’s ructions came as a result of the coronavirus pandemic tearing through demand, which is down by a third due to lockdowns across the globe. A lack of capacity to store the crude at its delivery point in Cushing, Oklahoma left traders desperate to offload contracts rather than take on the physical product without anywhere to put it.
Stock markets were set to open lower, meanwhile, with futures trade suggesting the Stoxx Europe 600 would slide 1.6 per cent, with the FTSE 100 and Dax 30 set for losses of 1.3 per cent and 1.7 per cent respectively.
Bank of Japan highlights risks to banking sector
Robin Harding in Tokyo
Vulnerability was already building up in the global financial system before the coronavirus crisis and the epidemic poses three large risks to Japanese lenders, the Bank of Japan has warned in its semi-annual Financial System Report.
Higher credit costs in a protracted downturn, losses on security investments or problems with foreign currency funding are all threats to Japanese institutions, the central bank said in its showpiece report on financial stability.
But in a measured outlook, the BoJ insisted that Japan’s lenders are well-placed to weather the shock, including its vulnerable regional banks. The country’s financial system “remains and will remain stable”, it said.
“Facing a sudden erosion in sales and profits, firms around the world have increased demand for funds,” said the report. “As a result, financial institutions’ capital and liquidity have come under intense pressure.”
Coronavirus pushes Virgin Australia into administration
Jamie Smyth in Sydney
Australia’s second-biggest airline, Virgin Australia, entered administration following its failure to secure a A$1.4bn ($886m) bailout from the government, becoming the nation’s highest-profile corporate victim of the coronavirus crisis.
The carrier said on Tuesday that it had appointed Deloitte to look for investment to recapitalise the debt-laden group, which is the main competitor to Qantas Airways in Australia with just over 30 per cent market share.
“We have commenced a process of seeking interest from parties for participation in the recapitalisation of the business and its future, and there have been several expressions of interests so far,” said Vaughan Strawbridge, Deloitte administrator. He added the goal was to “refinance the business and bring it out of administration as soon as possible”.
Virgin said it would continue to operate scheduled flights and would retain existing management led by Paul Scurrah, chief executive, during the restructuring.
The collapse of Virgin is the biggest shake-up in Australian aviation since Ansett Australia went bust in 2001, leaving Qantas with a near monopoly.
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World Health Organization warns against lifting lockdowns
John Reed in Bangkok
A senior World Health Organization official warned on Tuesday that any lifting of lockdowns aimed at containing the spread of Covid-19 needed to be gradual because containing the disease would take time and ending restrictions too soon would risk a recurrence of the disease.
“The Covid-19 battle is going to be a long one,” Takeshi Kasai, WHO regional director for the Western Pacific, said in an online press conference. He added: “It’s not really the right time to relax.”
Mr Kasai spoke at a time when several Asian countries, including Vietnam and Thailand, are considering whether and how to lift restrictions on transport and movement, public venues, and business openings imposed as part of efforts to fight the spread of the coronavirus. Prayuth Chan-ocha’s Thai government is due to discuss later on Tuesday whether to prolong an emergency decree imposed until April 30 to contain the outbreak.
The WHO’s Mr Kasai voiced concern about the growing number of confirmed Covid-19 cases in Japan. He also praised Vietnam’s government and people for imposing and abiding by tough measures to contain the virus’s spread, but warned that lifting the restrictions too soon could result in new infections.
Asian stimulus will only provide partial relief — Moody’s
Asia’s policy response to the coronavirus will not fully offset the impact of the economic fallout on companies and banks across the continent, Moody’s said on Tuesday.
The rating agency said that while support measures would help mitigate pressures on companies, “the scale of the consumption and production shocks in the region will blunt the effectiveness of the policy response”.
It added that the combination of economic slowdowns and fiscal expansion posed a risk to sovereign credit ratings – a key measure of the perceived credit-worthiness of governments.
Countries across the wider Asia-Pacific region have unveiled major policy responses to the crisis, including tax deferrals, loan guarantees and income subsidies for citizens.
In Australia, fiscal support already amounts to 18 per cent of gross domestic product, Moody’s said, while in Malaysia it makes up 16 per cent.
Trump says he will suspend immigration into the US
Demetri Sevastopulo in Washington
President Donald Trump on Monday said he would suspend immigration into the US in an effort to curb the spread of coronavirus and protect American jobs, as the country reels from the economic impact of the pandemic.
“In light of the attack from the Invisible Enemy, as well as the need to protect the jobs of our GREAT American Citizens, I will be signing an Executive Order to temporarily suspend immigration into the United States!” Mr Trump tweeted.
The tweet came as the US death toll from coronavirus hit 43,000, and the number of confirmed cases in the country neared 800,000 — four times the level of Spain, which is the second-worst hit country.
The announcement comes just days after Mr Trump claimed that the US had passed the “peak” and could soon reopen its economy.
The White House did not respond to a request for comment on the tweet, which included no detail. As Mr Trump has come under intense criticism in recent weeks, he has pointed to his decision in January to ban flights from China to the US as evidence that he was taking the outbreak of the disease seriously. He has recently claimed that his decision, and subsequent restrictions on travel from Europe, saved the US from witnessing millions of deaths.
It was unclear when Mr Trump would issue the order. Several of his previous efforts to restrict immigration or ban Muslims from entering the US have ended up in the courts. The state department has suspended most consular services around the world because of Covid-19, meaning potential immigration has already been stalled.
Hong Kong extends social distancing measures for another fortnight
Nicolle Liu in Hong Kong
Hong Kong has extended social distancing measures for another 14 days after reporting zero new confirmed coronavirus cases.
Chief Executive Carrie Lam announced on Tuesdays that social distancing measures which includes the closing down of gyms, special seating arrangements for restaurants, and limiting group gatherings to at most four people, will extend to the first week of May,
Ms Lam said that the “safer approach” would help ensure that the “successes that Hong Kong has achieved over the last three months will not be wasted”.
The territory reported zero new infections on Monday, meaning the total case count remains at 1,025, with four fatalities so far.
Nissan to shut global headquarters for 16 days
Kana Inagaki in Tokyo
Nissan will extend the annual shutdown of its global headquarters and other non-production facilities in Japan until May 10 to stem the coronavirus outbreak.
The shutdown, which will affect about 15,000 employees in total, comes after the Japanese government’s recent declaration of a state of emergency across the whole country in the wake of a recent spike in Covid-19 cases.
Nissan’s headquarters in Yokohama, near Tokyo, and other facilities in Atsugi, Oppama and Tochigi areas will remain closed from April 25 through May 10, extending beyond the Golden Week holiday which begins at the end of this month.
“The company hopes these measures will help prevent the spread of the coronavirus among employees at Nissan, the company’s affiliates, and the wider community,” the carmaker said in a statement on Tuesday, adding that many of its employees were already working from home.
The pandemic and a collapse in vehicle demand has already forced a virtual shutdown of Nissan’s car plants across the world.
Bolsonaro repeats calls for end to social isolation
Andres Schipani in São Paulo
Brazil’s rightwing President Jair Bolsonaro continued to downplay the risks of the coronavirus pandemic on Monday, calling for the reopening of shops and criticising state governors who have brought in social isolation measures.
“Everything done in excess ends up bringing problems. These measures did not reach their goal in some states,” Mr Bolsonaro said in front of the presidential residence in Brasília. “I hope this is the last week of this quarantine, of this way of fighting the virus.”
The president, who last week fired his health minister who had advocated for social distancing, has lambasted state governors as “job killers” because they called for self-quarantines. A survey by pollster Datafolha released on Monday, showed support for social isolation measures had slipped from 76 per cent two weeks ago to 68 per cent.
Mr Bolsonaro has repeatedly downplayed fears about coronavirus as “hysteria” and — echoing US president Donald Trump — praised the antimalarial drug hydroxychloroquine as a possible cure, ordering military laboratories to ramp up production. The Brazilian president has also been busy taking to the streets, drawing crowds on several occasions and this weekend addressed hundreds of supporters in the capital Brasília trying to suppress a persistent cough.
Some states want to extend partial lockdowns until May, but on Monday, Brazil’s new health minister Nelson Teich said there would be “a progressive, structured and planned exit from social isolation”, even as the number of confirmed cases jumped to more than 40,000 and the death toll grew to 2,500.
Congressional leaders near deal to boost small business funding
Lauren Fedor and James Politi in Washington
The White House and congressional leaders are “down to the fine print” in their negotiations to increase funding for small US businesses devastated by the coronavirus pandemic , setting the stage for a Senate vote as soon as Tuesday.
Nancy Pelosi, the Democratic speaker of the House of Representatives, told CNN that negotiators had “come to terms on the principles of the legislation” but were ironing out “final language” for an interim stimulus bill that would provide hundreds of millions of additional dollars for the Paycheck Protection Program.
The $350bn federal loan scheme ran out of money last week amid massive demand from suffering small businesses, with Americans observing “stay at home” orders.
A deal would break a two-week stalemate between Republicans and Democrats after Steven Mnuchin, the US Treasury secretary, asked Congress for an additional $250bn for the PPP.
The rescue fund, which ran out of cash last Thursday, has come under a mounting backlash in recent days, including from some Republicans, over terms that allowed some larger companies and chains, such as Ruth’s Chris Steak House, to access government-backed loans.
Read more here
China reports 11 new cases of coronavirus
China’s health authorities have reported 11 new cases of coronavirus infection to the end of Monday.
The majority of the new infections were in Heilongjiang province in the country’s north east, where a recent rise in locally transmitted cases has raised concerns over the risk of a new domestic outbreak.
Four of the new infections were in individuals who had recently arrived in China from abroad. One of the cases was reported in Guangdong province, which borders Hong Kong. There were no newly reported cases in Hubei, the province where the global pandemic started.
South Korea exports shrink by almost a third
Edward White in Wellington
South Korean exports have shrunk by almost a third in April, according to preliminary data, in an indication of the worsening economic fallout from the global coronavirus pandemic.
The value of shipments from Asia’s fourth-largest economy dropped 27 per cent in the first 20 days of this month from the same period a year earlier to $21.7bn, marking a sharp decline from steady exports reported for March.
In the closely watched Korean memory chip and car segments, sometimes viewed as a bellwether for regional trade, exports dropped by 15 per cent and 29 per cent, respectively.
Shipments to China and the US fell by around 17 per cent each, while export to the European Union sank 33 per cent, underscoring the global economic fallout from Covid-19.
The data comes just days after South Korea reported its worst monthly job loss data in more than a decade, highlighting the challenges facing the government in Seoul despite a landmark election victory last week.
Officials in Seoul have already launched a series of measures to cushion the blow from widespread disruptions and weakening demand, which have hit both the country’s export-led manufacturing industry and domestic spending. Seoul has introduced stimulus packages totalling more than $124bn and record-low interest rates.
The IMF expects South Korean gross domestic product to shrink by 1.2 per cent this year, down from an earlier forecast of 2.2 per cent growth. That would be worse than the 0.7 per cent contraction seen in the wake of the global financial crisis in 2009, though better than the IMF’s forecast contractions for Japan and Taiwan of 5.2 per cent and 4 per cent, respectively.
Colombia is latest to extend lockdown
Gideon Long in Bogotá
Colombia has become the latest country in Latin America to extend its coronavirus lockdown as the number of cases and deaths continues to rise across the region.
President Iván Duque said the quarantine measures, which were due to expire on April 27, would remain in place until at least May 11, although he said the country would gradually open up certain sectors of the economy, including construction and manufacturing. He said all domestic and international flights would remain grounded until the end of May.
Colombia has recorded just under 4,000 cases of Covid-19 — well below the Latin American average — and 189 deaths.
Last week, Venezuela extended its lockdown until May 12.
In Peru and Ecuador, the quarantine measures are due to be lifted on April 26 but both countries are likely to extend them. Despite taking tough steps to control the outbreak, Peru has recorded more than 16,000 cases, the second highest figure in Latin America behind Brazil. Ecuador, with over 10,000 cases and 500 deaths, has one of the region’s highest rates per capital of infection and fatalities.
Asia-Pacific stocks fall after historic plunge in US oil price
Asia-pacific equities edged lower on Tuesday, following Wall Street down after a historic day of trading in which US oil prices turned negative for the first time ever.
Japan’s Topix was 0.9 per cent lower, the Kospi fell 1.1 per cent and Australia’s S&P/ASX 200 lost 0.5 per cent. The S&P 500 had closed down 1.8 per cent.
On Monday, the West Texas Intermediate benchmark plunged to as low as -$40.32 a barrel, in an unprecedented move that reflected fears over storage capacity. In early Asian trading, the price edged above zero in what will be the final day of trading for the May contract.
Here’s a round up of some of the latest developments
Ratings agency Fitch has downgraded Ecuador’s sovereign rating to “restricted default” following the country’s agreement with bondholders last week which allows it to defer its debt repayments for the next four months.
Rental car company Hertz is laying off 10,000 employees in North America because of coronavirus.
More than 1,500 people in the US died from coronavirus in the past 24 hours, the smallest daily increase in a week, but enough to push the total number of fatalities above 37,000.
Democratic senators are calling for extra protections for workers in meat processing plants, farms and grocery stores as concerns over the impact of coronavirus on the US food supply chain grow.
IBM withdrew financial guidance for the rest of the year as it revealed that the coronavirus crisis had taken a bite out of its software sales at the end of March, pushing revenue down by 3 per cent in the first quarter.
Several hundred people protested outside the Pennsylvania state capitol building in Harrisburg on Monday, in the latest example of demonstrations across the US against the lockdown measures introduced by governors to curb the spread of Covid-19.
Slovakia is to allow some businesses to reopen as the country becomes the latest EU member state to ease the restrictions put in place to slow the spread of the coronavirus pandemic.
the World Health Organization has hit back at US president Donald Trump’s accusation that it covered up the severity of Covid-19 and China’s inability to contain the virus.
No more than 3 per cent of people have been infected with coronavirus in affected areas, even in badly hit regions, preliminary data gathered by the World Health Organization has revealed.
Cuomo to meet Trump in the White House on Tuesday
Lauren Fedor in Washington
New York governor Andrew Cuomo is to visit the White House on Tuesday afternoon, in a previously unannounced sit-down between the US Republican president and New York’s Democratic governor.
Mr Trump, who has often exchanged barbs with Mr Cuomo about his handling of the Covid-19 pandemic, told reporters at the White House coronavirus press briefing on Monday evening: “They’re getting it together in New York, a lot of good things are happening in New York and I think the governor is going to come in to see us tomorrow.
“He’s coming to the Oval Office tomorrow afternoon,” the president added. “Andrew is going to be coming in with some of his people.”
New York has been the US state hardest hit by the coronavirus, with more than 14,000 people dying from the virus, according to the latest statistics.
Mr Cuomo has gained national attention for his handling of the crisis and frequent clashes with the president. Last week he accused Mr Trump of shirking responsibility for coronavirus testing, saying: “Don’t pass the buck without passing the bucks.”
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