IMF’s Georgieva warns economic damage ‘way worse’ than 2008 crisis
Camilla Hodgson in London
The head of the International Monetary Fund has warned that the economic impact of the coronavirus pandemic will be worse than the 2008 financial crisis.
“This is a crisis like no other,” said Kristalina Georgieva, managing director of the IMF, speaking at a conference organised by the World Health Organisation on Friday.
“Never in the history of the IMF we have witnessed the world economy coming to a standstill,” she said. “It is way worse than the global financial crisis.”
She warned that emerging markets would be hit the hardest, both economically and in terms of the health impacts of the virus.
“We know that in many countries health systems are weak,” she said. Simultaneously, there has been “almost $90bn” of capital flight from emerging economies.
She said the IMF was mobilising a “$1tn war chest” that the organisation would use “as much as necessary”.
“We have never seen ever such a growing demand for emergency financing,” she added. Over 90 countries have already asked the IMF for help. “This is, in my lifetime, humanity’s darkest hour.”
UK health secretary urges Brits to resist temptation of warm weekend weather
Robert Shrimsley in London
Britons have been urged not to take advantage of expected warmer weather this weekend. Matt Hancock, health secretary,said: “We cannot relax our discipline now. If we do, people will die.”
His comments came as he announced plans for two new emergency Nightingale hospitals in Bristol and Harrogate with a joint capacity of 1,500 beds. Pressed on capacity on ventilators, Jonathan Van Tam, deputy chief medical officer, said: “I don’t think we are anywhere close to that kind of scenario.”
Mr Hancock added that the UK had a provisional order for 17.5m antibody tests, ready to deploy once the UK was satisfied that they work.
Putin says oil supply cuts possible if all major producers take part
Henry Foy in Moscow
Russian president Vladimir Putin has said that global oil output cuts of around 10m barrels per day is possible, but only if all major crude producers join in the reduction effort.
Oil prices have fallen by around half due to the collapse in demand caused by the coronavirus pandemic, sparking calls for cuts to supply.
“According to preliminary estimates, I think that we can talk about a reduction in the volume of about 10m barrels per day, a little less, maybe a little more,” Mr Putin said on Friday at a meeting with Russian government officials and executives from oil companies.
Of course, all this must be done in a partnership. And I believe that when I talk about partnerships, everyone, including our partners, understands that we can talk about a reduction from the level of production that prevailed before the crisis, that is, we are talking about the level of production in the first quarter of this year.
His comments come a day after US President Donald Trump said that cuts of 10-15m barrels would be possible, and that he had brokered a deal between Russia and Saudi Arabia to achieve it. Questions remain over whether US companies would participate in a coordinated cut.
“You know that we are in close contact with our partners in Saudi Arabia. I recently had a conversation with the President of the United States of America. We are all worried about the current situation, everyone is interested in joint and, I want to emphasize this, coordinated actions to ensure long-term market stability,” Mr Putin said.
Italy death toll rises by 766
Miles Johnson in Rome
A further 766 people have died in Italy as a result of the Covid-19 outbreak over the last 24 hours, taking the country’s total death toll to 14,681.
Official numbers released on Friday showed that total diagnosed cases rose by 4,585 to 119,827, a daily increase of 4 per cent. This rate of increase was broadly similar to every day this week.
Italian health officials have said they are optimistic that the rate of new infections is slowing almost a full month into the country’s lockdown measures but Rome has said the measures will remain in place until mid-April at a minimum.
The number of total active cases, which excludes patients who have died and those who have recovered, rose by 2,339, or 2.8 per cent higher than on Thursday.
The total number of patients who have recovered rose by 8.1 per cent to 19,758, while the total number in intensive care rose by 15 patients to a total of 4068.
Trump economic adviser Kudlow knocks down tariff rollback
James Politi in Washington
Larry Kudlow, the top White House economic adviser, dashed hopes that Donald Trump might offer US companies relief from some tariffs to help them weather the coronavirus pandemic, saying even a partial rollback of levies had been discarded as an option.
The Trump administration had been considering the suspension of payments of tariffs on some items including light trucks and apparel, to the point where an announcement was expected imminently, but the US president decided against such a move.
“We looked a little bit at some most-favoured-nation (MFN) custom duties, and we decided it was too complicated and it might send the wrong signals, so I would not expect to see any movement on tariffs right now,” Mr Kudlow said.
US business had been clamouring for tariff relief in a bid to shore up company balance sheets as the economy ground to a halt due to the sudden collapse of the economy. The White House had consistently stated it would not consider dropping the most high-profile levies it imposed over the last three years in the trade wars with China and standoffs with the EU, but people familiar with the matter hoped that more limited tariff relief might still be possible.
“We’re not going to change any of the tariff policies right now. Frankly, the president cut some pretty good trade deals with China, USMCA, and when we return to prosperity, which I think will occur before this year is out, part of that return is going to be an export boom,” Mr Kudlow said. “[But] there’s no tariff pullback right now.”
Bank committee relaxes capital rules to keep credit flowing
Matthew Vincent in London
Global banks have been told they do not need to stick to strict capital requirements on loans that carry government guarantees or allow payment holidays to ensure they keep lending amid the coronavirus disruption.
On Friday afternoon, the Basel Committee, which sets standards for bank regulation internationally, issued “technical clarifications” to lenders, explaining that customers seeking loan payment holidays or government-backed credit facilities did not need to be treated as higher risk. It said this new guidance was to “ensure that banks reflect the risk-reducing effect of these measures when calculating their regulatory capital requirements”.
Under the existing Basel rules, higher capital requirements apply to loans that are categorised as past due or defaulted because there has been no payment received for 90 days. But this makes it more costly, and unattractive, for banks to offer the payment holidays or forbearance measures now demanded by national governments, to help individuals and businesses in difficulty due to the Covid-19 pandemic.
To get around this problem, the committee has, therefore, told banks they can exclude payment moratorium periods from calculations of defaulted loans and non-performing assets. In addition, where customers have access to other relief measures such as public guarantees, their loans should not be counted as undergoing forbearance, which also normally raises the risk assessment and capital requirements.
UK offers relief to law firms specialising in public legal aid
Jane Croft in London
The UK government on Friday announced a series of measures to support law firms which specialise in publicly-funded legal aid work as they struggle during the coronavirus pandemic.
Many smaller law firms rely on the state-backed legal aid system that provides financial aid to members of the public who can’t afford to pay for lawyers. There have been concerns that such law firms, which have thin profit margins, could struggle to survive as their income drops because court hearings are being delayed and postponed.
The state-owned Legal Aid Agency has now introduced a series of measures including allowing law firms to claim for earlier payment for work they have already done on cases, as well as increasing fees for certain online hearings.
Simon Davis, president of the Law Society, which represents solicitors, said that he welcomed the fact that the Ministry of Justice and the Legal Aid Agency are seeking to permit lawyers to make earlier payment claims.
However he said it was vital that the Legal Aid Agency processes claims as quickly as possible. “If criminal law practitioners, who have to go into prisons and courts to keep the system of justice going, cannot afford to keep going themselves — the whole system risks grinding to a halt,” he said.
However, Amanda Pinto QC, chair of the Bar Council, which represents barristers, said that the new measures will have “little impact” on many barristers whose livelihoods depend on conducting criminal trials which have mostly been halted due to coronavirus.
She said that the Bar Council had recently published research from its survey of 145 chambers, which are offices shared by groups of barristers. The study revealed that 55 per cent of all chambers cannot survive three to six months and 81 per cent cannot survive 12 months without additional financial support.
Joshua-Pulev heavyweight championship fight postponed
June’s heavyweight boxing world championship fight between Britain’s Anthony Joshua and Bulgarian Kubrat Pulev has been postponed due to the coronavirus outbreak.
The bout, which had been scheduled for June 20 in the Tottenham Hotspur Stadium in north London, would have seen Joshua defend his heavyweight title in his first fight in the UK in two years.
Event promoter Matchroom Boxing said a new date for the fight was “currently being worked on” and that it would “continue to explore the possibility” of holding it in the stadium.
Mexico scraps consumer confidence surveys
Jude Webber in Mexico City
Mexico’s state statistics agency, Inegi, is scrapping its consumer confidence surveys because of coronavirus in a move that has alarmed some economists.
The agency made the announcement as it reported a 1.2 per cent drop in consumer confidence in March compared with February and a fall of 4.4 per cent compared with March 2019.
As part of the extraordinary measures adopted by Inegi … from the information corresponding to April and until further notice, we will delay the National Consumer Confidence survey since interviews require face-to-face interaction between people.
Inegi is planning to postpone not just the consumer confidence survey but also those on jobs, security, health and the use of technology , among others, after the government this week put the country on a nationwide unenforced lockdown to try to halt the virus’ spread.
Jonathan Heath, a board member of the Bank of Mexico, slammed the move on Twitter.
“Tragedy for economic indicators, an essential tool to understand what is going on. Inegi informs that from now on, it is stopping informing. The first victim, consumer confidence. Will confidence in the country go up or down in these months? We’ll never know,” he wrote.
New York coronavirus death toll nears 3,000
Joshua Chaffin in New York
New York suffered its single deadliest coronavirus night, with an additional 562 fatalities, bringing the total to 2,935, according to Governor Andrew Cuomo.
The state’s caseload jumped to 102,863, while the number of patients in intensive care units increased to 3,731. “You have more deaths, more people coming into hospitals than any other night,” Mr Cuomo said.
The governor also announced that he would send the National Guard to seize ventilators and other protective equipment from institutions not currently using them.
“I’m not going to let people die because we didn’t redistribute ventilators,” he said, promising to reimburse institutions for any equipment that is not returned.
European insurers caught in regulatory to-and-fro on dividends
Oliver Ralph in London, Olaf Storbeck in Frankfurt and David Keohane in Paris
Europe’s insurance companies are scrambling to react to contradictory messages from regulators on whether or not they should pay a dividend.
On Thursday evening Eiopa, the EU’s insurance and pensions regulator, urged the insurers to stop dividends, bonuses and share buybacks.
But while Eiopa has an umbrella role overseeing insurers, the primary regulators are in the nation states and the messages from them have been mixed.
German financial watchdog Bafin says that it does not think a blanket dividend ban on insurance companies is merited at the moment. “With regard to dividend policies, the individual situation of insurance companies needs to be taken into account,” said Bafin executive director Frank Grund. “We are in a close dialogue with the companies and expect a compelling explanation if they want to pay out dividends.”
Germany-based insurers Allianz and Talanx have said they plan to go ahead with their payouts.
But the French regulator, the ACPR, has called on insurers to stop their payouts. Paris-based Axa has pushed back its annual meeting, which was due to vote on the dividend, by two months until the end of June. This, it said, was “to allow time for discussion with the European, French and other insurance regulators.”
Primark agrees to pay manufacturers’ wages after backlash
Jonathan Eley in London
Cut-price fashion retailer Primark said that it would establish a fund to cover the wage component of orders that it has cancelled after its original decision not to pay for those orders provoked a storm of criticism.
The fund will help pay wages for garment workers in Bangladesh, Cambodia, India, Myanmar, Pakistan, Sri Lanka and Vietnam, it said in a statement.
Primark’s entire store estate has been closed since March 22, representing sales of £650m a month. It said it already has £1.6bn of paid-for stock in stores, depots and in transit.
However, its parent company, Associated British Foods, is cash rich and has a strong balance sheet. That prompted heavy criticism of its actions from groups representing garment manufacturers and workers.
Ukraine to send medical team to Italy and provide industrial alcohol
Roman Olearchyk in Kyiv
Ukraine will send medical teams and industrial alcohol used for making hand sanitiser to Italy after receiving a request for assistance from a country worst affected by the Covid-19 pandemic.
“Ukrainian specialists will gain invaluable experience before we face a peak of the disease … and they will come back when they are most needed at home,” Ukraine’s president Volodymyr Zelensky said on Friday.
“This is mutual assistance, as Italy will also provide its assistance,” he said, adding that Rome will provide accommodation and food while Ukraine covers the doctors’ salaries.
Italy’s request for assistance was revealed this Wednesday by Arsen Avakov, Ukraine’s interior affairs minister.
Ukraine currently has 942 confirmed Covid-19 cases, including 23 fatalities.
In a bid to contain a spiralling peak of infections later this month which could overwhelm the country’s dilapidated hospitals, Ukraine on Friday introduced additional quarantine measures. Gatherings of more than two people are banned. People venturing out of their residences for necessary purposes such as buying food or medicines are obliged to wear protective masks.
In mid-March Ukraine closed restaurants, malls, public transportation and regular passenger flights and urged most citizens to stay home.
English Premier League urges footballers to take 30% pay cut
Murad Ahmed in London
The Premier League has called for its players to take a 30 per cent cut to their annual wages, in the latest effort to address a deepening cash crunch caused by the coronavirus pandemic.
English players remain at an impasse with the country’s league over demands to reduce their salaries, with politicians attacking top clubs and footballers over their financial response to the pandemic, which has led to the postponement of fixtures.
On Friday, the 20 clubs in English football’s top tier announced they had “unanimously agreed to consult their players regarding a combination of conditional reductions and deferrals amounting to 30 per cent of total annual remuneration.”
The Premier League added the season would not resume at the beginning of May as previously hoped, but only when “it is safe and appropriate” to do so.
The demand puts further pressure on the Professional Footballers’ Association, the players’ union led by chief executive Gordon Taylor, which has been in crisis talks with the Premier League and the English Football League.
The PFA has resisted pay cuts, instead seeking a deferral of wages until the shutdown passes.
Some sectors of US economy more exposed than others
Businesses in the medical and accommodation sectors were among those to voice particular concern over the impact of the coronavirus in the latest survey of US industry, while others in areas including mining and construction had yet to feel the brunt of it.
The ISM non-manufacturing PMI released on Friday indicated the US service industry grew at its slowest pace since 2016 in March (see below). But comments from businesspeople underline the divergent impact of the virus on different sectors.
One respondent working in healthcare outlined “significant shortages” of basic medical supplies, such as personal protective equipment. A local government group voiced similar concerns, pointing to a “severe impact to operations” and “major challenges” obtaining supplies for first responders.
Accomodation and retail businesses were hit hard by the business closures that occurred last month, while property has suffered particularly acutely. “The coronavirus is affecting every aspect of business,” said one company in the real estate, rental and leasing business.
But other survey respondents said they had yet to experience major disruption from the outbreak. One construction sector respondent said:
The coronavirus is having an impact, but not as much as we thought it would at this point. All sectors are staying busy.
Similarly, one mining group said it was “experiencing no real issues from a business perspective”.
US services sector notches slower growth in March
The US services sector grew at its slowest pace since 2016 in March, catching off-guard economists who forecast the coronavirus pandemic would trigger a contraction in activity.
The Institute for Supply Management’s non-manufacturing PMI eased to 52.5 last month from 57.3 in February. That was its lowest level since August 2016 and kept it above the threshold of 50 that separates expansion from contraction. The headline result was far better than the reading of 45 economists had forecast.
“The non-manufacturing sector composite index indicates growth in March; however, the extreme slowing of supplier deliveries weighted heavily in the calculation. The other three subindexes that contribute to the NMI contracted strongly in March,” Anthony Nieves, chair of the ISM said.
The composite non-manufacturing index (NMI) is made up of four equally-weighted subindices — supplier deliveries, business activity, new orders and employment. However, the supplier deliveries sub-index is the only one that is inverted, meaning readings above 50 indicate slower deliveries.
That sub-index rose to 62.1 from 52.4 in February, which was the biggest monthly change since September 1997 and “primarily a product of supply problems related to the coronavirus”, ISM said.
New orders decreased, but remained in expansion mode, while subindices for business activity and employment sank into contraction territory.
ISM surveys, particularly those on the manufacturing sector, are commonly regarded as a proxy for economic growth. Similar to this morning’s non-farm payrolls numbers, these March data may only reflect the early-stage damage from the coronavirus pandemic.
Senior Democrat calls for ban on medical equipment exports
Aime Williams
Eliot Engel, Democratic chairman of the House foreign affairs committee, has demanded the US administration ban exports of key medical protective equipment for frontline workers.
The call comes as the US faces a growing shortage of masks and gloves for medical personnel, and signals increasing support for export controls among top Democrats.
“There are first-hand news reports of traders and profiteers diverting these supplies to the highest bidder overseas and away from our physicians, nurses, and first responders who are risking their lives to treat Americans with life-threatening viral infections,” Mr Engel said in a letter to vice president Mike Pence.
“Despite this alarming development, the White House task force on the coronavirus has taken no steps to order the national regulation of personal protective equipment,” he added.
UK High Court to review benefits law as single parents struggle
Jane Croft in London
The High Court is to hear a legal challenge relating to a government policy which restricts welfare benefits from being paid to thousands of single parents because of their migration status.
The High Court said on Friday that a full hearing into the legality of the Home Office’s policy, which prevents some migrants accessing the UK’s benefits system, will go ahead next month.
The legal case has been brought by a single mother and supported by the Unity Project, a campaign group. On Friday, barristers for the claimant asked the judges for an urgent suspension of the policy in the light of coronavirus and claimed that individuals who are unable to work due to the virus cannot access welfare support.
The High Court has left the policy in place but ordered that a full hearing should take place on May 6 after being told that the case raised “serious issues”.
The claimants have alleged that the current policy should be scrapped as it discriminates against women and ethnic minorities.
Adam Hundt, partner at law firm Deighton Pierce Glynn, which represents the claimants, said it was “disappointing” that the High Court did not suspend the policy immediately. “We know April will be a long and bleak month for families who have lost some or all of their income because of the outbreak, and who were already in desperate straits.”
Caz Hattam, coordinator of the Unity Project, said: “We will be amassing evidence to show the court that the whole scheme is inhumane and needs to be dismantled.”
Mexico to wind up hundreds of state trusts to support the economy
Jude Webber in Mexico City
Mexico will wind up hundreds of state trusts in order to plough some 250bn pesos ($10bn) into paying off debt, supporting the beleaguered state oil company Pemex, boosting social programmes and reactivating the economy amid the coronavirus shock, President Andrés Manuel López Obrador said.
The decree, published on Thursday night, affects trusts which span a variety of sectors, the president told his morning news conference. Mexico has a range of public trusts which cover areas from boosting investment to payments for military equipment and protecting against health and natural disasters.
Despite the unprecedented coronavirus shock, the president refuses to countenance additional debt, which he identifies with what he calls the “failed neoliberal economic model” of the past. He plans to announce his economic measures to weather the “transitory” impact of Covid-19 on Sunday. Economists fear the government is underplaying the threat: the most pessimistic model, from Bank of America, forecasts that GDP will drop by 8 per cent this year, twice the government’s worst estimate.
Analysts and lawyers were stunned by what they saw as an asset grab. “To expropriate [trusts] in this way is worthy of a government now facing an unprecedented fiscal hole and capable of EVERYTHING. Unheard of,” tweeted Carlos Ramírez of Integralia, a consultancy, and former member of the government’s financial stability council.
Mexico has more than 700bn pesos in trusts but some are not subject to the decree. Irma Eréndira Sandoval, government comptroller, called the move “historic” and said the trusts were plagued with corruption and used to hide state cash. The deadline for transferring the funds is April 15.
African health crisis has impacts for Europe, warns EU policy chief
Michael Peel in Brussels
Josep Borrell, EU foreign policy chief, has warned of the impact of the Covid-19 crisis on African countries and the potential knock-on effect for Europe.
“Africa is of particular concern to us,” he told reporters in Brussels on Friday, after a teleconference of EU foreign ministers. “They are our neighbours and the pandemic there could get out of control very rapidly.”
While European countries had an average of 37 doctors per 10,000 inhabitants, the figure in Africa was just one, he said, without giving a detailed breakdown.
“We have to help Africa in our own interests,” he said. “Because if the pandemic spreads there it will [get] back to Europe.”
Mr Borrell also added to growing warnings about an online “infodemic” of misinformation and disinformation about the crisis, either politically motivated or involving patently false stories about coronavirus and how to deal with it, such as posts telling people not wash their hands.
“This is not fake news, it’s dangerous news,” he said.
Hong Kong to permit banks to slash reserves held against bad loans
Primrose Riordan in Hong Kong
The Hong Kong Monetary Authority said it would halve the level of regulatory reserves banks have to keep against bad loans, releasing a possible HK$200bn (US$25.7bn) of lending capacity, after a meeting with banks and members of the city’s business community.
The coronavirus outbreak has exacerbated the city’s economic problems which were first stirred by the US-China trade war and then worsened by political upheaval which drove the economy into a recession last year.
The HKMA said on Friday it would also obtain US dollars to lend to Hong Kong banks through repo transactions with the US Federal Reserve. The territory’s de facto central bank said one aim of the measures was to increase banks’ liquidity to support local economic activity.
“Despite the deteriorating economic environment, total loans granted by the banking sector increased by HK$192 billion during the five months from end September 2019 to end-February 2020,” the HKMA said in a statement on Friday night.
US stocks fall slightly in early trading
Shares on Wall Street fell slightly at the opening bell, after data showed the US economy shed 701,000 jobs in March.
The S&P 500 fell 0.3 per cent, although futures had indicated sharper losses earlier in the session.
“Markets are anticipating horrendous economic data over the coming months with a focus on the timing and strength of the subsequent recovery in the second half of the year,“ said David Riley, chief investment strategist at asset manager BlueBay.
Today’s report confirms, if any were needed, that the US and global economy is experiencing the most severe drop in output and income in modern history.
Switzerland doubles size of emergency loan programme for businesses
Sam Jones in Zurich
The Swiss government announced on Friday that it would double the size of its emergency loan programme for small and medium-sized businesses, to SFr40bn, as the economic effects of the coronavirus lockdown begin to bite.
The Swiss government’s existing SFr20bn programme of interest free loans for struggling enterprises has been so popular it has been more than three-quarters allocated in its first week of operation.
As of Friday morning, just under SFr15bn had been lent out to smaller Swiss businesses — most of it in loans of less than SFr500,000, Bern said.
Swiss banks are responsible for lending the money. The government provides a full guarantee on lending of SFr500,000 or less, which carries zero interest. Larger loans of up to SFr20m come with an 85 per cent government guarantee, and a 0.5 per cent interest rate charged on that portion, plus an additional premium — averaging around 2.5 per cent — on the remaining 15 per cent lent by the bank itself.
“We are in a situation where we have to help quickly,” said finance minister Ueli Maurer at a press conference on Friday afternoon. “I think we are doing enough. But it might be that we have to adjust … We are in a global recession, we have to be aware of that.”
EU to scrap VAT and customs duties on imports of medical devices
Jim Brunsden in Brussels
The European Commission announced that it was scrapping customs duties and VAT on imports of medical devices and protective equipment, saying it wanted to make them affordable for hospitals and charities.
The commission said the measure would apply retroactively from January 30 through to July 31, with the possibility of an extension.
“In Italy, customs duty of 12 per cent and a value added tax of 22 per cent is levied on some face masks or protective garments that we import from countries such as China,” said Ursula von der Leyen, the commission’s president. “Our decision will make them one third cheaper.”
Ms von der Leyen said that the decision meant scrapping value-added tax on imports of ventilators, which usually face an average VAT rate of 20 per cent.
“This is our contribution to easing the pressure on prices for medical and protective equipment, and to making them more affordable”, Ms von der Leyen said.
Earlier this week the UK chancellor announced a similar step, waiving import taxes on medical equipment including ventilators, coronavirus testing kits and protective clothing.
UK deaths rise by 684 in a day
The number of people to have died from coronavirus in UK hospitals has increased by 684, the highest daily increase yet, to 3,605.
Figures from the UK department of health show the daily increase in deaths rose from 569 in yesterday’s figures, as hospitals prepare for an influx of patients needing critical care.
The number of people testing positive for coronavirus as of 9am on Friday morning was 38,168 – an increase of 4,450 compared to the previous day.
The latest figures show the number of deaths recorded by 5pm on Thursday, and only account for the number of people who have died in hospital and who have tested positive for Covid-19.
Data show March death rate in France is lower than in 2018
Victor Mallet in Paris
The number of deaths across France in the first three weeks of March was slightly higher than last year but lower than in 2018, when there was a severe influenza epidemic, according to provisional data released by the national statistics institute Insee.
However, the effects of the new coronavirus pandemic are starting to have an impact in badly affected regions, with sharp rises in the number of deaths in eastern France and the Paris area in recent days.
Insee said 39,707 deaths had been registered in France excluding the Bouches-du-Rhône department between March 1-23 this year, compared with 39,141 last year and 44,443 in 2018.
Online mortality data for the week of 21-27 March showed sharp increases from the previous week in several departments, with Seine-Saint-Denis up 63 per cent and Paris up 32 per cent.
On average 1,670 people a day die in France, Insee said, although the number is higher in winter than in summer. In recent days, the French government has announced roughly 500 Covid-19 deaths in hospital per day, with more deaths from the disease registered in old people’s homes.
Bleak US jobs numbers only capture ‘early effects’ of virus, BLS warns
The labour market contraction shown in today’s US jobs figures is only a taste of what is to come as the coronavirus outbreak rips through the economy, the Bureau of Labor Statistics has said.
US nonfarm payroll employment fell by 701,000 in March, according to numbers released today, while the unemployment rate rose by 0.9 percentage points to 4.4 percent — the sharpest increase since 1975.
But this report only reflects “some of the early effects” of the pandemic as the survey period predated many of the school and business closures that occurred in the second half of the month, the BLS said.
“We cannot precisely quantify the effects of the pandemic on the job market in March,” the agency added. “However, it is clear that the decrease in employment and hours and the increase in unemployment can be ascribed to effects of the illness and efforts to contain the virus.”
US futures recover some losses in choppy trading
Shares on Wall Street were set to fall at the opening bell, with futures tied to the S&P 500 down 0.3 per cent in choppy trading after data showed the US economy shed 701,000 jobs in March and the unemployment rate jumped to its highest in more than two-and-a-half years.
Still, futures were well off their worst levels, having earlier pointed to declines of more than 1 per cent.
March’s non-farm payrolls survey period ended in early March, before the worst effects of the coronavirus-related shutdown were beginning to be felt, and followed a day after record-breaking weekly jobless claims released on Thursday.
Richard Flynn, a managing director at Charles Schwab, said the jobs numbers had come in largely as expected.
“At this stage, we don’t know when markets will find their footing, especially given that traditional technical, sentiment and valuation metrics are less relevant in a pandemic-driven bear market,” he said.
US economy sheds 701,000 jobs in March
The US economy shed 701,000 jobs in March and the unemployment rate jumped to its highest in more than two-and-a-half years, in data that do not fully reflect the impact of the coronavirus pandemic on the American labour market.
Long the bright spot of the US economic expansion, the labour market contracted last month for the first time since September 2010, well down from an upwardly revised 275,000 non-farm payrolls added in February. Economists forecast 100,000 job losses.
The unemployment rate jumped to 4.4 per cent from February’s more than 50-year low of 3.5 per cent, data from the labour department revealed on Friday, shooting well past the median forecast for a rise to 3.8 per cent.
Timelier data have already given a snapshot of the dire state of the US labour market. More than 10m people have filed for unemployment benefits in the past fortnight, with data on Thursday showing a record 6.6m filed for jobless aid last week. The survey period for non-farm payrolls ended in early March.
The labour department said in its release that data from the March survey “broadly reflect” some of the early effects of the coronavirus pandemic on the labour market.
“We cannot precisely quantify the effects of the pandemic on the job market in March. However, it is clear that the decrease in employment and hours and the increase in unemployment can be ascribed to effects of the illness and efforts to contain the virus.”
Coronavirus serves up a surplus of Wagyu beef
Leo Lewis in Tokyo
Cancelled business dinners, postponed dates, empty ryokan inns and the sudden absence of gourmet tourists from around the world has given Japan’s government a coronavirus crisis it never envisaged: how to offload hundreds of tons of succulent, perfectly marbled Wagyu beef in a hurry.
The country’s cold-storage facilities are filling rapidly, as coronavirus has caused a sharp fall in visitors and dining out, according to Japan’s National Beef Cattle Advancement Fund Association, a trade body. Prices are also falling hard for a meat that could command as much as $500 a kg in happier times, a representative added.
The Ministry of Agriculture is considering various ideas about how to deal with the surplus, including “how to encourage people to eat Wagyu”, said an official. One idea, which was proposed by a group within the ruling Liberal Democratic party to be part of the government’s promised economic stimulus package, would involve the distribution of Wagyu beef coupons to Japanese households.
UK health secretary suggests deaths will peak on April 12
George Parker in London
Matt Hancock, UK health secretary, has indicated he thinks the daily death rate in Britain could peak on April 12, as the prime minister urged people to stay indoors this weekend.
Asked about suggestions fatalities from the disease could hit their peak on Easter Sunday, Mr Hancock told Sky News “I would not steer you away from that”.
Boris Johnson has said the government would review the social distancing measures in place across Britain after the Easter weekend.
Mr Johnson, who is still self-isolating with the virus in Downing St, issued a video appeal to Britons not to take advantage of a warm spring weekend by going outdoors.
In a video message, the prime minister said it was vital that people continued to stay at home to bear down on the virus and alleviate pressure on the NHS as the crisis enters its most acute stage.
“Please, please, stick with the guidance now,” Mr Johnson said. The prime minister said he could understand why people, especially with children, would want to go outside this weekend, but added: “I would urge you not to do that.”
Mr Johnson has been in self-isolation for a week since developing “mild symptoms” last Friday but he said in his video message that he continued to have an above-normal temperature. “I’m feeling better,” he said. “But in accordance with government advice I must continue that isolation until that symptom goes.”
Schools advised to grade on past performance as exams are scrapped
Andrew Jack in London
Schools and colleges should “use their professional experience” to rank students and propose the grades they believe they would have achieved in exams, according to official guidance released on Friday on how to mark A-levels, GCSEs and other qualifications.
The guidance, following the decision to scrap exams because of coronavirus, says proposed marks will then be adjusted centrally based on expected national outcomes for students, prior attainment and the results of the school or college in recent years.
Assessments by teachers should be based on factors including students’ performance in classwork and homework; results in assignments and mock exams; non-exam assessment or coursework; and general progress during their courses.
There will be no normal process of appeals, and schools’ recommended marks should not be shared with students, the guidance says, but anyone who wants to contest the final results can sit exams in autumn or in 2021.
UK trustees not to be penalised for halting pension deficit contributions
Josephine Cumbo in London
Trustees of company pension schemes will not be retrospectively challenged by the regulator if they agree for an employer to pause deficit contributions during the coronavirus crisis, The Pensions Regulator has said.
David Fairs, executive director of regulatory policy with TPR, said trustees were being asked to make “difficult” decisions in the current economic climate but the regulator would “respect” the action they took.
Mr Fairs was referring to emergency measures brought in by the Regulator last week, to help support struggling businesses facing a cash crunch due to the coronavirus outbreak.
Many of the UK’s 5,400 defined benefit pension schemes have seen their deficits blow out, due to falling stock markets, and deficit contributions are the payments made by an employer to repair a funding shortfall in a pension scheme’s finances. Guidance issued by the Regulator last week said trustees could consider requests for contribution holidays of up to three months, to help them through a cash crunch.
“We recognise these are difficult decisions that trustees might be having to make… with incomplete information (from the employer),” Mr Fairs said in an interview with Lane Clark & Peacock, the actuarial firm, which was published online.
China lowers reserve requirements for small banks
Don Weinland in Beijing
China’s central bank said it would release about Rmb400bn ($56.4bn) by lowering the amount of cash smaller banks must hold in reserves, its latest policy move to spur lending to an economy beleaguered by the coronavirus outbreak.
It was the second cut to reserve requirement ratios, or RRR, since the outbreak began in January. Small and mid-tier banks will be allowed to lower their cash reserves ratio by 100 basis points in two steps on April 15 and May 15, freeing up about Rmb400bn in newly lendable funds.
China’s economy likely notched negative GDP growth in the first quarter of the year, the lowest growth since the Cultural Revolution that ended in the 1970s. Full-year growth is expected to fall below 3 per cent year on year.
In an attempt to revive the economy, the central bank and banking regulator are pushing lenders to continue to provide credit to struggling companies in the hope that they survive through the downturn. Cutting RRR is one method of achieving that.
Aircraft lessor cancels orders in ‘most challenging period’ in industry’s history
Peggy Hollinger in London
Avolon, one of the world’s biggest aircraft lessors, has cancelled more than 100 aircraft orders and drawn down a $3.2bn credit line, as it steels itself for a wave of requests from airline customers for rental holidays in the face of a global crackdown on international travel.
Dómhnal Slattery, chief executive of the Ireland-based lessor 70 percent owned by Bohai of China, said the industry was facing “the most challenging period in the history of commercial aviation” with the world’s fleet of 26,000 aircraft “effectively grounded”.
The groundings have put severe pressure on the liquidity of the world’s airlines, with many seeking government backed bailouts.
Mr Slattery said Avolon had received requests from more than 80 per cent of its customers for relief from payment obligations under their leases. Some form of short-term deferral would be agreed with a majority of customers, he said.
Given the uncertainty over the duration of the crisis, Avolon has cancelled orders for 75 of Boeing’s 737 Max — still grounded after two fatal accidents — and deferred a further 16. It has also cancelled an order for four of Airbus’s A330 widebody aircraft, and deferred delivery of nine A320 single aisle passenger jets by six to seven years.
Including other deferrals, Avolon had reduced future aircraft commitments between 2020 and 2023 by 119 aircraft to 165.
The announcement comes as the Financial Times reports that Airbus prepares to cut production rates of its single and twin aisle aircraft.
Mr Slattery said Avolon was taking steps to bolster its liquidity in light of the uncertainty. Including the drawdown of the revolving credit facility, and other measures, the group ended the first quarter with total liquidity of more than US$5bn.
“While it remains difficult to determine the length or depth of this crisis, we remain confident in our prospects and in the ability of the industry to recover in the aftermath of COVID-19,” he said.
Saudia Arabia launches $2.4bn package for private sector workers
Ahmed Al Omran in Riyadh
Saudi Arabia will cover 60 per cent of wages for citizens working in the private sector for three months in industries affected by the coronavirus pandemic.
The cost of the subsidy ordered by King Salman on Friday is estimated to be about 9bn riyals ($2.4bn) and is the latest in a series of economic packages to help cushion the impact of the virus.
1.2m workers are expected to benefit from the subsidy when payments start to be made on May 1. Authorities had previously unveiled a $32bn stimulus package for private sector companies.
The kingdom has reported 1,885 confirmed cases and 21 deaths from Covid-19 so far.
Division in Iranian cabinet over timeframe for return to work
Najmeh Bozorgmehr in Tehran
Iran’s health minister has hit out at his industry counterpart over what he sees as a premature return to work in the country and urged President Hassan Rouhani to prevent the re-opening of businesses.
In a letter to the president on Friday, Dr Saeed Namaki wrote: “Unfortunately, the Ministry of Industries, Mine and Trade has suddenly and without any co-ordination … ordered resumption of work in all businesses.”
Any such spontaneous measures by governmental, non-governmental, cultural, religious and other organisations will immediately hurt the health sector and consequently the country’s economy.
Iran’s Persian New Year holidays have finished and many people are unsure whether to return to work on Saturday.
The country has adopted a policy of semi-quarantine, under which schools, universities, mosques, parks, shrines, Friday prayers, non-essential state organisations and main roads linking provinces have all been closed. Mr Rouhani’s government has said it will make a decision on the partial lifting of restrictions on Sunday under a new plan described as “smart social distancing”.
Fatalities increased to 3,294 on Friday from 3,160 the previous day. 53,183 individuals have tested positive for the virus.
India’s truck drivers stranded as lockdowns disrupt transport links
Jyotsna Singh in New Delhi
India’s trucking industry says nearly 500,000 cargo trucks are stranded on the country’s highways, nine days after prime minister Narendra Modi’s abrupt lockdown was imposed.
The All India Motor Transport Congress has warned that supply of essential goods will be severely disrupted unless authorities can ensure the safe, secure and smooth movement of trucks, which carry the bulk of Indian cargo.
“After the lockdown, most of the truck drivers just parked their trucks where they were and fled, as everything including food stalls started shutting down,” Naveen Kumar Gupta, the organisation’s secretary general, told the Financial Times.
New Delhi has tried to help the flow of transport, issuing an order that permits all trucks, whether or not they are carrying essential supplies, to move freely.
But Mr Gupta said that truckers werestill complaining of harassment by police and slow progress, with road barriers and checkpoints in place virtually every kilometre.
Poland faces threat to unity as government factions fight over elections
James Shotter in Warsaw
Poland’s right-wing government is facing the most serious test of its unity since it came to power in 2015, after a clash between the Law and Justice party and a smaller coalition partner over whether to go ahead with presidential elections despite the coronavirus pandemic.
Poland is due to hold the vote on May 10 but, like much of Europe, the country is in near-total lockdown as officials battle to contain the spread of the virus, which has so far infected 3,149 people, and killed 59, in the central European nation.
Despite this backdrop, the leader of Law and Justice, Jaroslaw Kaczynski, is adamant that the elections — which Law and Justice’s candidate, incumbent Andrzej Duda, is the favourite to win — should go ahead on May 10.
In a last-ditch attempt to allow the vote to be held despite the coronavirus crisis, Law and Justice has put forward legislation that would allow the election to be conducted entirely by post. MPs are due to vote on the proposals today.
However, Porozumienie, a small right-wing party allied to Law and Justice, said that it would vote against the measures, raising the risk of Poland’s government splitting, and Law and Justice losing its majority.
The debate on the measures was initially due to take place at 10.00 CET, but has been postponed several times, and is now due to start at 13.00 CET.
Surgical face masks reduce coronavirus droplets in the air, study finds
Surgical face masks significantly reduce the amount of viruses that can be detected in the air, according to a study published in Nature on Friday, adding to the mounting scientific evidence for the efficacy of adopting masks to contain the spread of coronavirus.
Researchers from the World Health Organization, Harvard and Hong Kong University found that surgical masks reduced the detection of influenza and coronaviruses in respiratory droplets and aerosols.
Most experts agree that wearing a face mask can stop some virus-laden watery droplets that are thought to be a main coronavirus vector and are expelled into the air when a person coughs, sneezes or just breathes out. A big problem in resolving the debate conclusively has been the lack of proper clinical trials on the impact of masks on viral infection rates.
Read more on the topic here
Condoms and sex toys in demand from social isolators
Guy Chazan in Berlin
The coronavirus shutdown has brought swaths of the global economy to a standstill, but for producers and purveyors of condoms and sex toys, business is booming.
Ritex, Germany’s largest domestic producer of prophylactics, saw sales nearly double in March compared with the same period last year. The same trend is happening in other countries. Ann Summers, the British lingerie chain, said sex toy sales last week were up 27 per cent over last year.
Fear of Covid-19 was prompting a flood of adrenalin and a subsequent “dopamine rush” in many, which “increases desire and libido”, German sexual health specialist Axel-Jürg Potempa told the Berliner Kurier.
Raiko Spörck, managing director of Dildo King, said: “We are doing incredibly well out of this crisis, but I’m not exactly jumping for joy. People are dying, and no one’s happy.”
Spain reports over 900 new deaths as infections slow
Daniel Dombey in Madrid
The number of people who have died in Spain after contracting coronavirus has topped 900 for the second consecutive day, but the spread of the virus continues to slow.
Government figures on Friday showed that so far 10,935 people have died after becoming infected, 932 of them in the past 24 hours. This compares with Thursday’s death toll of 950, the highest yet recorded for Spain.
However, the rate of increase in the number of confirmed cases of coronavirus continues to slow, almost three weeks into a nationwide lockdown intended to reduce transmission of the virus.
As of Friday, the number of documented cases stood at 117,710, a 7 per cent rise on the previous day’s total and the lowest daily percentage increase for weeks. The accumulated total of people who have recovered rose 14 per cent on Thursday’s total to 30,513. To date, 6,416 people have needed intensive care.
Officials emphasise that the number of deaths and intensive care cases can only be expected to fall a week to two weeks after the transmission rate is brought under control, but contend that this outbreak of the virus has now reached its peak. However, limits on testing mean that the data on numbers of cases are incomplete, and largely reflect hospitalisations and infected medical personnel.
Iran calls for donations to source vital medical equipment
Monavar Khalaj in Tehran
Iran is calling for donations to help procure vital equipment to treat coronavirus patients.
“The country needs 2,000 ventilators, 1,000 of which are urgently needed,” said Karim Hemmati, acting chief of the Iranian Red Crescent Society, in a video conference call on Friday.
Mr Hemmati added that the society “has extended its hand to our countrymen” under a campaign called “breathing gift” to buy the respiratory devices.
Accordingly, Iranian donors have so far given 160bn rials ($3.8m based on the official rate), which could buy 100 ventilators from Iranian companies.
Iran is dependent on imports of ventilators but the Islamic republic says the US’s toughest ever sanctions have created obstacles in the supply of medical equipment.
Sportswear group Puma suspends dividend
Puma has suspended its dividend as the world’s third largest sportswear maker scrambles to cope with a liquidity squeeze caused by lockdowns across the world.
The German company warned investors on Friday that the closure of almost all shops outside China, Japan and South Korea had “led to a major decline in net sales and cash inflow”, adding that it was impossible to judge when the situation would improve.
The group previously planned to increase payouts to shareholders by 43 per cent to €0.50 a share after currency adjusted sales in 2019 increased 17 per cent year on year. It had already suspended payment of 100 per cent of the salaries of its board and reduced those of senior management by 25 per cent.
Irish unemployment rate set to reach 25% by summer
Arthur Beesley in Dublin
Ireland’s unemployment rate is on course to jump to 25 per cent by the summer and the economy could shrink this year by more than 8 per cent due to coronavirus, the country’s central bank said on Friday.
Mark Cassidy, chief economist with the bank, said near-term prospects for the Irish economy were “very unfavourable” with the outlook beyond that dependent on the path of the virus. Large parts of the economy are shut due to government measures to contain the disease and gross domestic product is now forecast to drop 8.3 per cent this year even if restrictions are rolled back after three months.
The bank’s assessment follows 330,550 job losses in March that took the number of people on welfare support to 513,350, a rise that is already estimated to have taken the jobless rate to some 17 per cent from less than 5 per cent before the virus struck.
The bank believes yet more jobs will be lost, saying the number of people unemployed will rise further to average some 610,000 in the three months to June. “Given the fall in employment which has occurred to date and is in prospect … the unemployment rate would rise to around 25 per cent in the second quarter.”
UK warehouse pivots from Boohoo clothing to protective equipment
Andy Bounds in Huddersfield
A UK warehouse that usually stocks clothes for online retailer Boohoo is now full of personal protective equipment for health staff after the armed forces enlisted the logistics business Clipper to help meet excess demand.
Clipper’s fleet of lorries will deliver the much-needed PPE to NHS hospitals and other healthcare providers to further boost capacity to deal with the coronavirus pandemic.
Mobilisation took five days, including setting up a full warehouse management system for more than 200,000 sq ft of warehousing space.
Steve Parkin, executive chairman of Leeds-based Clipper, said:
These are unprecedented times, and the support we have received from NHS Supply Chain, Unipart and 101 Logistic Brigade has been outstanding, and has enabled us to create a truly collaborative solution as a result.
Singapore extends distancing measures as locally-transmitted cases rise
Stefania Palma in Singapore
Singapore is stepping up its distancing measures as the city state faces a jump in locally-transmitted coronavirus cases.
“We have kept the outbreak under control,” said Lee Hsien Loong, Singapore’s prime minister, in a national address. “But looking at the trend, I am worried that unless we take further steps things will gradually get worse, or another big cluster may push things over the edge.”
The new measures will run from April 7 to May 4, with the option of extending the rules if necessary. Authorities are asking the public to stay at home and avoid interacting with others outside their household. People should only go out for essential services, to buy food or to take out from restaurants or for exercising in parks at a safe distance.
Schools and universities will be shut down while work premises, except for essential services and those in critical economic sectors, will close. Establishments such as supermarkets, hospitals, utilities, transport and critical banking services will remain open.
The city state counts 1,114 cases and five deaths. Cases not inked to previous patients account for nearly half the total cases reported daily.
Cannes Lions cancelled as high-end events companies feel global squeeze
Patricia Nillson in London
The advertising festival Cannes Lions will be cancelled this year, after having first been postponed from June to October.
The organisers behind Cannes Lions, which annually attracts roughly 12,000 people to the French riviera, on Friday said its customers’ priorities were to “focus on preserving companies, society and economies”.
“The marketing and creative industries, in common with so many others, are currently in turmoil, and it’s clear that we can play our small part by removing all speculation about the festival this year,” said Philip Thomas, Cannes Lions chairman.
Cannes Lions is scheduled again for June 2021.
The festival was first held in 1954 and since 2004 has been owned by information and events company Ascential, which has seen the value of its shares nearly half in the past two months as the outbreak squeezes events companies. Its shares were down over 7 per cent in morning trading.
Natasha Brilliant, analyst at Citi, said the cancellation had “clearly been a difficult decision for Ascential … both in terms of financial impact but also reputation and status within the advertising industry”.
Ascential made roughly £70m in revenues from last year’s Cannes Lions.
UK business activity points to deeper deterioration than financial crisis
Valentina Romei in London
UK business activity dropped to a more than 20-year low, pointing to a “deep contraction” in output as many businesses close and people are stuck indoors following measures to limit the spread of coronavirus.
The IHS Markit UK purchasing managers’ index for services crashed to 34.5 in March, down from 53.2 in the previous month, marking the lowest reading since records began in 1996.
The final reading is lower than the initial estimates of 35.7 and it signals a faster deterioration in activity than during the financial crisis.
The slump in services activity was almost exclusively linked by survey respondents to business shutdowns and cancelled orders in response to the coronavirus pandemic. Services account for about 80 per cent of the UK economy which caused the PMI composite index to drop to 36 from 53 in the previous month, the lowest since records began and worse than initial estimates.
The UK economy is “now almost certain to experience a deep contraction in the second quarter of the year” said Tim Moore, economics director at IHS Markit.
The drop in new orders in the services sector was much sharper than the previous record seen in November 2008, while employment numbers fell at the fastest pace since 2009.
“As the pandemic raged, some companies resorted to hasty redundancies and a freeze on job hires to stay afloat in the short-term” said Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply.
NHS overlooks cleaning product that could improve public safety
Andy Bounds in London
A British-made invention that can reduce the spread of coronavirus is being snapped up around the world but ignored by the NHS.
Surfaceskins, which makes self-cleaning door handles, has more than doubled its order book in the past fortnight — almost entirely from overseas demand.
The University of Leeds spinout company invented a pack that sprays a small amount of alcoholic gel on to door push pads and pull handles that prevent the next person using it picking up the virus and other diseases. The dose is not enough to clean hands, however.
The patented product has been tested in NHS hospitals and UK schools but just 10 per cent of sales are domestic, mainly to private hospitals and businesses.
Brian Wallgora, the chief executive, said Surfaceskins was willing to earmark most of its production for the NHS, but had failed to secure orders.
We have had a lot of support [in the past] from the NHS. Our distributor has been working with individual hospital trusts and has tried to approach the central buying office to make sure they are aware of the product . . . but no one is ready to order.
Mark Wilcox, Medical Advisor to the NHS’ national infection prevention and control lead, found that installing Surfaceskins increased people’s use of gel to clean their hands by 80 per cent in research last year.
Prof Wilcox said: “It is such a simple and clever idea. I have no doubt it has got something to offer.”
Eurozone business activity tumbles at record pace
Valentina Romei in London
Business activity in the eurozone’s services sector collapsed at an unprecedented pace in March, as measures to limit the spread of coronavirus shut many businesses and resulted in extensive job losses.
The IHS Markit eurozone purchasing manager index for services plummeted to 26.4 in March, down from 52.6 in the previous month and the lowest since records began in 1998. The reading was lower than an initial ‘flash’ estimate.
The overall PMI composite index – an average of services and manufacturing – fell to 29.7 in March from 51.6.
Country by country survey data released on Friday morning have underlined the enormous economic cost of the lockdowns in Europe, as business activity tumbled across the region.
– Italy’s services activity crashed to an all-time low of 17.4
– France’s fell to 27.4, the sharpest contraction in that survey’s history
– Spain’s reading of 23 was also the lowest recorded
– The German services industry fared little better, as its PMI reading fell to 31.7
“No countries are escaping the severe downturn in business activity, but the especially steep decline of Italy’s service sector gives a taste of things to come for other countries,” said Chris Williamson, chief business economist at IHS Markit.
Global cases push past 1m
Steve Bernard in London
The number of confirmed global coronavirus cases continued its rise overnight, having reached 1m late yesterday.
The addition of 79,833 cases on Thursday brought the total to 1,017,851. The death toll jumped more than 10 per cent to 53,249, as another 5,969 people lost their lives.
France saw the largest rise in fatalities with an extra 1,355. The US remains the epicentre of the virus, meanwhile. 29,874 new cases were confirmed in the country, nearly 40 per cent of Thursday’s worldwide daily rise. The current total US case count stands just shy of a quarter of a million at 245,373.
Italy continues to see daily numbers significantly lower than their recent peak, adding 4,668 cases on Thursday. Spain is also seeing a levelling off of daily increases, with additional cases staying around 7,500 for the past nine days.
The death toll in the UK rose by another 569 yesterday, with 162 of them in London. The total number of deaths has now reached 2,921 and at the current rate will see it pass China’s total later today.
The number of recovered cases rose by 17,859 yesterday, leaving a total of 212,018 who were previously infected free from the virus.
Germany records 145 new deaths as rate of infection appears to slow
Tobias Buck in Berlin
Germany recorded more than 6,174 new coronavirus cases over the past 24 hours as evidence mounts that the growth rate of confirmed cases is slowing in the country.
Official data from the Robert Koch Institute also showed that 1,017 Covid-19 patients had died of the disease so far, an increase of 145 compared with the previous day.
Germany has one of the highest numbers of coronavirus cases in the world, and the third-highest in Europe behind Italy and Spain. But there is growing evidence that the growth rate – both of new infections and of deaths — is slowing compared with recent weeks.
According to Friday’s data, the number of new infections rose by 8 per cent — compared with 16 per cent a week ago — while the number of deaths rose by 17 per cent, down from 28 per cent the week before.
The total number of detected infections is now at 79,696 since the crisis started. Germany’s case fatality rate rose to 1.28 per cent, still significantly below the death rate in the worst-affected countries such as Italy and Spain.
Italian business activity in historic slump as lockdowns stifle economy
Valentina Romei
Italian business activity crashed in March as coronavirus dealt a blow to the eurozone’s third-biggest economy that is “likely to be felt for a long time to come,” a key survey released on Friday has shown.
The IHS Markit purchasing managers’ index for services plummeted to 17.4 in March from 52.1 in the previous month, a lower reading then during the financial crisis and the lowest since the survey began in 1998. This also marks the steepest contraction registered by IHS Markit across any other country during the Covid-19 crisis.
The dominant services sector brought the PMI composite index — an average of services and manufacturing — down to 20.2 in March, from 50.7 in the previous month, also the lowest on record.
“Overall, March data point to an extremely challenging time for the Italian economy and, for that matter wider society, with the sheer scale of the impact on output, employment and investment likely to be felt for a long time to come” said Lewis Cooper, economist at IHS Markit.
Italy’s companies reported the fastest contraction in new business on record, and they expect activity to fall further in the year ahead. The rate of job losses was the quickest since April 2009.
Italy’s population has been in lockdown for longer than any other western country as it was hit by the pandemic first. Some parts of Italy have been shut since February 24 with a national lockdown implemented since March 10.
Russia reports 601 daily cases as spread shows signs of slowing
Henry Foy in London
Russia reported 601 new cases of coronavirus on Friday, a 17 per cent jump in total cases that marks a slight slowing in the spread of the outbreak in the country.
Russia has reported 4,149 cases of Covid-19 and 34 deaths from the virus, far fewer per capita than other major European countries.
Still, president Vladimir Putin on Thursday announced that a nine-day stay-at-home period announced last month and due to end on Sunday would be extended through the whole of April, as Moscow seeks to stem a sharp rise in infections seen over the past 10 days.
Russia’s capital accounts for 2,923 cases, or 70 per cent of the country’s total.
UK health minister draws up plans for ‘immunity certificates’
Jim Pickard in London
UK officials are drawing up plans for “immunity certificates” for those who have previously had coronavirus, health secretary Matt Hancock confirmed on Friday morning.
Mr Hancock told the BBC Radio 4 Today programme that there was a “workstream” taking place on how the certificates – or wristbands – could work.
The health secretary, who has only just returned to work after falling sick with Covid-19, conceded that it was not yet known how long people would have immunity to the virus after experiencing it.
But he said it was “highly likely that I’m now immune or have a very high level of immunity” even though this was not certain.
“When science is clear about the point they are immune, people can get back to being normal,” he said. “The big challenge is knowing how longer immunity lasts for.”
Mr Hancock confirmed that his new target of 100,000 daily tests by the end of April applied only to swab tests for infection rather than antibody tests to find out if someone has previously had the virus.
Earlier on LBC radio he refused to say he would resign if the target was not reached.
The government previously had a target of reaching 25,000 swab tests per day and 250,000 tests of both kinds – but there was no specific date put on either target.
Asked why he came back to work after barely a week – when WHO advice is to self-isolate for 14 days – Mr Hancock said he was following the advice of the chief medical officer.
Spain’s business activity falls to lowest level in 20 years
Valentina Romei in London
Spain’s business activity crashed in March as a prolonged lockdown to limit the spread of coronavirus hit the dominant services sector, resulting in widespread job losses.
The IHS Markit Spain purchasing managers’ index for services crashed to 23 in March, from 52.1 the previous month, the lowest reading in more than 20 years of the survey. The hotels and restaurants sector was hit especially hard, in line with the widespread shutdowns designed to control the Covid-19 outbreak.
Services account for more than two-thirds of Spain’s economy, resulting in a composite index — which average services and manufacturing — dropping to 26.7 in March from 51.8 in the previous month. A reading below 50 indicates a majority of businesses reporting deteriorating conditions compared with the previous month.
“The March survey laid bare the scale of the Covid-19 pandemic and associated effort to contain the outbreak, with services companies registering unprecedented falls in activity, new work and confidence” said Paul Smith, economics director at IHS Markit.
According to the survey, job losses have been their sharpest since the height of the financial crisis.
Nearly 900,000 workers have lost their job since mid-March in Spain, according to the country’s labour minister, with those on short-term contracts in tourism or construction among the hardest hit.However, concerns have arisen over the quality of survey-based results as various European statistics offices have said businesses may not be taking part.
European markets slide as investors remain skittish
A brief market rally faded on Friday, as stocks across Europe and Asia slipped and volatility surged through the oil market.
London’s FTSE 100 fell 1.5 per cent in the first half hour of trading, while the benchmark Stoxx 600 was 1 per cent lower. The German Dax index was down 1 per cent.
Wall Street’s S&P 500 rallied overnight, but futures pointed to losses of more than 1 per cent at the open for the US benchmark.
*A previous post that has since been removed incorrectly stated the magnitude of the decline in Stoxx 600 futures prior to the open on Friday. Futures were down as much as 1 per cent.
Emergency meeting of Opec oil ministers to take place on Monday
Anjli Raval in London
Oil ministers from Opec and countries that were part of the Opec+ alliance that collapsed last month will take part in an emergency meeting on Monday as they seek a supply cuts deal, one person familiar with the plans said.
Ministers will take part in a webinar after US President Donald Trump said on Thursday a deal was imminent between Russia and Saudi Arabia that could see as much as 15m barrels a day taken off the market.
Russia, however, denied any talks had taken place between Moscow and Riyadh, prompting questions about the seriousness of any discussions and how exactly global producers will cut enough output to have an impact on prices.
A demand collapse as lockdowns and travel bans proliferate could curb oil consumption by up to 30m b/d this month, traders have said. This is a third of the 100m b/d the world used up in 2019 on average.
Brent crude this week fell to the lowest since 2002 before Thursday’s surge — the biggest one day increase ever — triggered by Mr Trump’s remarks, stoking hopes for a deal.
Brent crude held steady at $30 a barrel on Friday.
H&M sales nearly halve in March as Covid-19 forces store closures
Richard Milne, Nordic and Baltic Correspondent
Sales at Hennes & Mauritz almost halved in March as the world’s second-largest clothes retailer said the coronavirus crisis would accelerate the transformation towards online shopping and away from physical stores.
Three-quarters of H&M’s stores are currently closed and it is talking of “tens of thousands” of lay-offs as it responds to the worst crisis in its history.
“The situation we find ourselves in cannot be compared with anything we have ever experienced before. It puts an incredible strain on people, our communities and, of course, also on us as a company. All this will also speed up the transformation already taking place in our sector,” said Helena Helmersson, H&M’s new chief executive.
She added that the changes in consumer behaviour during the crisis would “further increase the digitalisation of society” and sustainability, two areas H&M is focusing on.
H&M has suspended its dividend, slashed investments, warned landlords that it will pay less rent, reduced working hours for tens of thousands of employees, and is in talks over extra credit facilities.
Its capital expenditure will be half of last year’s level while its operational expenses are being cut by 20-25 per cent. But H&M still expects to make a loss in the second-quarter.
It pointed to a rebound in demand in China where it had closed almost two-thirds of stores due to coronavirus but now has 99 per cent open again. Its Chinese sales were 89 per cent below their level from 2019 at the nadir but this week have only been down 23 per cent.
Nationwide abandons business banking and returns £50m grant
Nicholas Megaw in London
Nationwide, the UK’s largest building society, has given up on its efforts to move into business banking due to the impact of coronavirus, causing further disruption to a scandal-ridden government scheme to boost competition in the sector.
Nationwide said it would return a £50m grant it received to fund its expansion.
The award was part of a programme that was supposed to make up for Royal Bank of Scotland’s bailout during the financial crisis, but Nationwide is the second of the winners to hand back some of the cash. In February, Metro Bank also gave back £50m after it slashed its growth plans.
Banking Competition Remedies, the body which manages the scheme, said changes to interest rate expectations after the Bank of England’s recent rate cuts meant entering the business banking market was “no longer commercially viable” for Nationwide.
It said it would outline the rules of a new contest to distribute Metro Bank and Nationwide’s prizes by the end of the month.
BAE to defer dividends and review executive pay as virus takes its toll
Peggy Hollinger in London
Defence group BAE Systems is deferring its annual dividend and reviewing executive pay as coronavirus begins to have an impact on the UK defence group’s business.
However the company still intends to press ahead with a $1.9bn acquisition of the military global positioning and airborne tactical radio divisions of Collins Aerospace and Raytheon.
BAE is still planning to pay a dividend but “the timing of any payment will be contingent on prevailing macro-economic and social conditions over the coming months”, it said in a statement on Friday.
Like many defence companies relying on government contracts, BAE had felt little impact in the first three months of the year. But it was starting to see “more significant disruptions” as the second quarter began, the group said.
An update on the payout would be provided at the interim results on July 30, at which time the remuneration of the executive directors would also be considered.
BAE said its liquidity was strong, “with significant gross cash and access to a £2bn revolving credit facility to April 2024″.
Ryanair expects to fly virtually no planes through April and May
Ryanair said it expected its fleet to remain “largely grounded” throughout April and May, as it outlined the disruption the pandemic has caused to its business.
The low-cost airline said traffic in March fell 48 per cent compared with the previous year to 5.7m passengers, as widespread restrictions on movement began to kick in.
Ryanair is now operating fewer than 20 daily flights — down 99 per cent.
The airline expected profit after tax for the 12 months to the end of March of between €950m and €1bn, which is at the lower end of its previously guided range. It did not offer guidance for the following year, but warned it would take a €300m hit over fuel hedges
Ping An donates £1.1m of medical supplies to the UK
Chinese insurer Ping An has said it will donate £1.1m in medical supplies to the UK including surgical masks, diagnostic kits and ventilators to help the country fight the coronavirus outbreak.
Ping An said it would send 100,000 surgical masks, 10,000 Covid-19 diagnostic kits, 4,000 sets of protective clothing and 15 respirators. It said the donation would “help address the serious shortage of medical supplies in the UK”.
The British government has come under fire for not being able to provide enough protective equipment to hospitals, exposing doctors and nurses to potential coronavirus infection.
China is responsible for half the world’s production of masks and upped manufacturing earlier this year as it battled the outbreak. Now the coronavirus pandemic has put pressure on supplies as countries fight to secure protective equipment for medical workers.
Asian Development Bank warns on slowing growth in 2020
John Reed in Bangkok
Growth in developing Asian countries will slow sharply in 2020 to 2.2 per cent as Covid-19 hammers global demand, down from 5.2 per cent in 2019, the Asian Development Bank said on Friday.
The Manila-based multilateral lender said that stagnating or contracting growth in the US, Europe, and Japan would make for a “deteriorating external environment”, and its new forecast, the first since the coronavirus pandemic, was 3.3 percentage points lower than its previous one of 5.5 per cent.
It said that it expected growth to rebound to 6.2 per cent in 2021, “assuming the outbreak ends and activity normalises”.
“Growth could turn out lower, and the recovery slower, than we are currently forecasting,” said ADB chief economist Yasuyuki Sawada. “For this reason, strong and co-ordinated efforts are needed to contain the Covid-19 pandemic and minimise its economic impact, especially on the most vulnerable.”
The World Bank published its own gross domestic product forecasts for emerging Asian economies earlier this week, with its economists predicting in the more pessimistic of two scenarios that the Covid-19 outbreak could push the region into recession.
Google to release users’ location data to measure social distancing
Richard Waters in San Francisco
Google has started publishing high-level data to show how millions of its users are responding to social distancing policies aimed at slowing the spread of the coronavirus.
The move comes as governments around the world have turned to internet and mobile communications companies for location data that can help in tackling the pandemic, prompting fears about an erosion of privacy rights.
Google is releasing anonymised, aggregated data collected from its users, stopping short of identifying individuals or even how many people are congregating in any particular place.
The reports, covering 131 countries, are designed to show changes in the number of people visiting six different categories of location, including transit stations, grocery stores and pharmacies, and parks. They include regional data, reaching down to the county level in the US, to help local authorities see the impact of their social distancing rules.
A report for California, for instance, showed that the number of people using public transit last Sunday was 50 per cent lower than normal, while 35 per cent fewer people used the state’s parks and the number staying at home was 15 per cent higher than usual.
Stacey Gray, senior counsel at the Future of Privacy Forum, welcomed the precautions Google had taken to protect user privacy, including only using data from people who had opted in to having their location histories collected by the internet company.
It had also taken its lead from health authorities and only released information they had indicated would help in controlling the pandemic, she added.
StanChart forecasts worst year for economy in ‘living memory’
The global economy in 2020 may see the worst peacetime performance since the Great Depression, according to economists at Standard Chartered, who forecast the coronavirus pandemic will bring an economic collapse in the first half of the year.
They predict the second quarter of 2020 will mark a low point with the bulk of national lockdowns happening during this period. The bank forecasts the global economy will contract by 0.6 per cent year-on-year in 2020.
Pointing to a spike in US unemployment claims to 6.65m in the week to March 28 as a sign of the economic pressure brought by the virus, the bank also highlighted a sharp drop in manufacturing activity in Europe.
It expects China to be the “first to emerge from this crisis, but the ongoing recession in the rest of the world is likely to weigh on its recovery”, predicting 2.5 per cent growth for 2020.
“With entire economic sectors at a standstill, we are looking at the reality of large GDP losses, not just slower growth.” the economists said.
“The most effective stimulus measures are likely to be those aimed at avoiding a spiral of mass layoffs and bankruptcies, particularly for [small and medium-sized businesses].”
Fitch Ratings said it expects world economic activity to fall by 1.9 per cent in 2020, with US GDP falling 3.3 per cent and the UK’s economy to shrink by 4.2 per cent. Fitch forecasts annual growth in China at below 2 per cent.
“The forecast fall in global GDP for the year as a whole is on a par with the global financial crisis but the immediate hit to activity and jobs in the first half of this year will be worse”, said Brian Coulton, Fitch’s chief economist.
Lockdown in Mexico threatens production of Corona beer
Jude Webber in Mexico City
First coronavirus. Then no beer? Brewer Grupo Modelo, part of Anheuser-Busch InBev, said it would halt production and sale of beer in Mexico from Sunday unless the government explicitly recognised it as an essential activity.
It said in a statement that 800,000 small shops earned 40 per cent of their revenue from beer sales and more than 15,000 families benefited from the cultivation of barley crops.
Mexico’s government this week put the country under an unenforced lockdown, urging non-essential businesses to close to stop the spread of Covid-19.
“Should the federal government decide to issue a clarification confirming beer as an agro-industrial product, in Grupo Modelo, we are ready to execute a plan with more than 75 per cent of our staff working from home and at the same time guaranteeing beer supplies,” it said in a statement.
Anheuser-Busch InBev owns Grupo Modelo brands — including the brand Corona — everywhere in the world except in the US, where they are owned by Constellation Brands.
Mexico is the world’s top beer exporter and the drink is widely consumed. When the governor of the northern state of Nuevo León on Wednesday said there would be a ban on beer sales from Friday, queues quickly formed outside beer stores as desperate residents flocked to stock up.
Grupo Modelo is already contributing to the coronavirus effort by donating hand gel made with the alcohol extracted from its alcohol-free beer and it said it would “in the coming days announce further actions which we are sure will contribute greatly to winning this battle”.
Early data point to dramatic slowdown in Indian economy
Benjamin Parkin in New Delhi
As India’s coronavirus shutdown enters its 10th day, early data are hammering home the dramatic effect on the country’s economy.
India was already suffering through the worst slowdown in years before prime minister Narendra Modi announced last week that the country would enter a lockdown until mid-April.
Capital Economics points to preliminary indications of a stark drop in economic activity.
Electricity demand has been running 30 per cent below last year’s level, while traffic volumes for Mumbai’s usually congested streets have plummeted.
Car sales for March fell sharply, with Maruti Suzuki — India’s largest carmaker — selling 48 per cent fewer vehicles than the same time a year earlier. Monthly sales for Tata Motors, which sells more commercial vehicles, fell more than 80 per cent.
SocGen estimated that 70 per cent of India’s economy would grind to a halt by the end of the lockdown, with all but essential services shutting down.
With the number of cases rising sharply in recent days, Capital said it thinks lockdown measures may need to remain in place for longer.
“We suspect that containment measures will be less effective in India than in richer economies where it is more practical for people to isolate themselves,” the research firm said. “This in turn means that the measures will need to remain in place longer.”
India set to maintain restrictions on movement and public activities
Amy Kazmin in New Delhi
India is likely to maintain serious restrictions on movement and public activities to prevent the spread of coronavirus, even after the current three-week national curfew ends.
In a conference call with the chief ministers of India’s states, Mr Modi called for a phased lifting of restrictions on public movements after April 15, when the ongoing curfew is due to be lifted.
“It is important to formulate a common exit strategy to ensure staggered re-emergence of the population once the lockdown ends,” a statement from the prime minister’s office said.
States have been asked to provide their suggestions to the central government of how such a phased lifting of restrictions might take place, the statement said.
New Delhi has urged India’s state governments to use days of continuing lockdown to identify virus “hotspots,” encircle them, and ensure that the deadly pathogen does not spread out further from those areas.
“In the next few weeks, testing, tracing isolation and quarantine should remain the areas of focus,” the statement said. Total cases in India have now reached 2,500.
Cathay chief executive says airline is virtually grounded
Primrose Riordan in Hong Kong
The chief executive of Cathay Pacific Airways says the airline’s fleet is “virtually grounded” and that demand has “disappeared”, as the carrier announced executive pay cuts and further reductions in the company’s flight schedule.
The Hong Kong-based airline, which has said it has no way to know when business will improve, said it would fly only twice a week to London, Vancouver, Sydney and Los Angeles in April, as well as three times a week to eight destinations in Asia.
Augustus Tang said in an internal memo that the airline carried just 582 passengers on a recent day, down from its usual daily load of 100,000 people.
Mr Tang’s base salary will be cut back by 30 per cent while executive directors will take a 25 per cent reduction from April to December.
He said staff at locations where the airline has stopped flying have been temporarily stood down or furloughed.
Chinese tech apps profit from millions staying at home
China’s Bilibili, a YouTube-like online entertainment hub, is expected to record its best-ever first quarter as its audience spends more time online during the coronavirus outbreak.
Lizhi, a Chinese podcasting app, has already posted a strong start to the year.
Unlike their American counterparts, which are dependent on advertising-based business models, Chinese tech companies such as Bytedance, which owns the widely popular Douyin video app, are highly diversified.
Read the full FT story here
Goldman Sachs extends Apple credit card payment holiday
Laura Noonan in New York
Goldman Sachs is extending the payment holiday on its Apple credit card until May 1 to give customers breathing space as coronavirus-related layoffs in the US hit 10m.
Apple Card customers were notified of the April payment holiday in an email on Thursday evening.
The bank previously said “tens of thousands” signed up for a March payment holiday within 24 hours of that measure being announced on March 15.
“We understand that the rapidly evolving Covid-19 situation poses unique challenges for everyone,” Thursday’s email said, inviting customers to apply for a payment holiday through an online system.
Other banks are also offering payment holidays and waivers for charges, as the US reels from the sharpest rise in jobless claims the country has ever seen.
US seeks to bring Taiwan closer to World Health Organization
Kathrin Hille in Taipei
The US is seeking to help Taiwan share best practices in fighting Covid-19 and gain more participation in the World Health Organization, the state department said late on Thursday.
At an online conference on March 31, senior foreign policy officials from both sides explored ways to share the “Taiwan model” on fighting Covid-19.
Participants also discussed efforts to reinstate Taiwan’s observer status at the World Health Assembly, the WHO’s decision-making body, as well as other avenues for closer co-ordination between Taiwan and the WHO, the state department said.
The push is a further indication that Taiwan’s success in containing the virus might help it counter China’s efforts at isolating the country internationally.
It comes after US president Donald Trump signed into law the Taipei Act, legislation that requires the administration to help bolster international support for Taiwan, both by leaning on third countries to retain or upgrade ties with Taipei and by advocating for Taiwan’s participation in international organisations.
China claims Taiwan as its territory and demands that third countries and international organisations treat it as if it were ruled by Beijing. As a result, Taiwan is excluded from the WHO.
Virgin Australia renews its call for an $850m government loan
Jamie Smyth in Sydney
Virgin Australia has warned the government it runs the risk of facilitating a monopoly in the domestic airline market unless it extends an A$1.4bn (US$850m) loan to the airline.
Paul Scurrah, Virgin chief executive, said on Friday a potential monopoly scenario was “not in the public interest” and it wanted to work with the government to design a loan scheme that would save jobs and enable the airline to restart quickly and help the economy recover.
“The prospect of new airlines entering to take the place of Virgin is not likely,” he said. “Airlines around the world are in distress and won’t have the cash to invest in a start-up operation in Australia. We will end up with a temporary monopoly if this is the case and that’s not helpful.”
Mr Scurrah’s comments in a statement to the Financial Times follow reports in Australian media that the government is balking at providing a loan to the airline, which is struggling with net debt of A$5.1bn and an inability to generate cash because it has grounded most of its planes due to coronavirus.
Virgin’s main rival Qantas has said it does not need a government bail-out but insists it should be offered any the same level of public support as Virgin to ensure a level playing field in the airline market.
Last month, Alan Joyce, Qantas chief executive, urged the government not to support companies that “have been badly managed for 10 years”, provoking a public clash with Virgin and a rebuke from Australia’s competition regulator.
Mr Scurrah said no business could survive the kind of pressure and uncertainty caused by the coronavirus crisis. “All airlines will require government assistance to support a recovery and we are no different,” he said.
World Bank approves $1bn emergency loan for Indian healthcare
Amy Kazmin in New Delhi
The World Bank has approved a $1bn emergency loan to help India strengthen its healthcare system as it braces for a potential surge of coronavirus cases.
The loan — the largest of its kind ever to India’s healthcare sector — will provide resources to scale up testing, expand laboratory capacity, set up isolation wards for coronavirus cases, and purchase ventilators, personal protection equipment and other machines.
Much of the focus will be on equipping district hospitals, and specially designated infectious disease hospitals where coronavirus patients will be treated.
The coronavirus crisis has hit as New Delhi’s public finances were already under strain, as a result of a protracted financial slowdown and significant shortfalls in revenue generation — issues now exacerbated by a three-week lockdown.
Several Indian states have been cutting civil service salaries to cope with the financial stress, and some have complained of difficulties in finding resources to strengthen public health systems, which are run by states.
In its announcement, the World Bank said it was also working with the Indian government on a potential social protection programme to assist vulnerable Indians, who have been hard hit by restrictions imposed to stop the spread of coronavirus, including a three-week national curfew.
Mexico’s new health service appeals for specialist doctors
Jude Webber in Mexico City
Mexico reported a nearly 10 per cent rise in the number of confirmed coronavirus cases, as a new health service, Insabi, aimed at the poorest in society published an appeal for doctors and nurses trained in intensive care, emergencies and other specialist areas.
The number of confirmed coronavirus cases in the country rose to 1,510 with 50 deaths linked to the virus.
President Andrés Manuel López Obrador earlier said the epidemic was “a transitory public health and also economic crisis … that means we’ll emerge from it soon, that it’s not a debacle”.
He caused outrage when he said the crisis was a godsend that would help the government advance in its self-styled transformation of Mexico and eradication of corruption.
Despite anguish from business leaders, he has ruled out tax holidays, and tax agency SAT said in a tweet that 908,000 annual income tax declarations had been received in a single day, a record.
“Your contribution will be spent, among other things, on buying materials and contracting medical personnel,” it said.
The president has promised to unveil emergency economic measures on Sunday.
Boeing shuts down military plant in Pennsylvania
Claire Bushey in Chicago
The coronavirus outbreak has forced Boeing to shut down a plant in the US that makes military helicopters and other rotorcraft for two weeks.
“Suspending operations at our vital military rotorcraft facilities is a serious step, but a necessary one for the health and safety of our employees and their communities,” said Steve Parker, the senior executive at the site in Pennsylvania.
The action comes 10 days after Boeing made a similar move to pause production at its facilities in Washington state. About 4,600 people work at the Ridley Park site, in suburban Philadelphia, where the company makes the H-47 Chinook, V-22 Osprey and MH-139A Grey Wolf.
Pennsylvania’s governor, Tom Wolf, placed the state under a stay-at-home order on April 1. The plant will close on April 3 and reopen on April 20.
Employees who can work remotely will do so, while those who cannot will be paid leave for 10 working days. The plant will be cleaned while employees stay at home.
South Korea’s coronavirus cases rise above 10,000
Edward White in Wellington
South Korea on Friday reported 86 new coronavirus cases, down from 89 a day earlier and taking the total number of infections to 10,062.
A further five deaths in the country took the total death toll to 174.
Seoul has won international praise for containing what was the worst outbreak outside China, but health officials have over recent weeks been frustrated by new clusters emerging.
The new cases are linked mostly to church groups, hospitals and nursing homes, as well as rising infections from people arriving from the US and Europe.
N Korea reports drop in quarantined people as US disputes claims
Edward White in Wellington
North Korea on Friday reported a sharp reduction in the number of people quarantined in the isolated country, as Pyongyang’s claims of having no coronavirus cases continued to draw international scepticism.
KCNA, the state news agency, reported that about 500 people were in quarantine, a sharp reduction from more than 2,000 reported last week.
As many as 10,000 people have been quarantined in North Korea since the country closed its borders with China and cut off most trade with the outside world after reports of the virus emerged from Wuhan in January, according to Pyongyang’s propagandists.
General Robert Abrams, pictured, who leads the 28,500 US troops in South Korea, on Thursday reiterated his doubts that North Korea was free of the deadly virus.
“That is an impossible claim based on all of the [intelligence] that we have seen,” Gen Abrams told Voice of America and CNN.
The Financial Times reported last month that despite the fact that Pyongyang has yet to confirm a single coronavirus case in the country, the country’s officials have secretly asked for international help to increase coronavirus testing as the pandemic threatens to cripple its fragile healthcare system.
In South Korea, 16 people linked to the US military have been confirmed to have coronavirus. Gen Abrams in February introduced sweeping measures to restrict access and boost health monitoring on its massive military bases in a bid to protect troops.
Hong Kong business activity slumps in March
Business conditions in Hong Kong weakened in March as the city’s economy felt the effects of global measures to limit the spread of coronavirus.
The Hong Kong Markit purchasing managers’ index improved slightly to 34.9 in March from 33.1 in February, but still marked the second-largest deterioration since the survey began in 1998. A reading below 50 signals contraction.
Hong Kong’s economy fell into recession in the third quarter following months of anti-government protests that scared away tourists and pushed down retail sales. The coronavirus outbreak has put mass protests on pause, but measures to limit the spread of the virus saw retail sales drop 44 per cent year on year in February.
Survey respondents said new orders shrank and supply chains were disrupted by the virus, leading to longer delivery times.
“Key sectors of the economy such as retail, travel and tourism were decimated by the global coronavirus outbreak,” said Bernard Aw, principal economist at IHS Markit. “Business activity across Hong Kong continued to contract at a severe pace in March, as new sales plummeted further.”
Mr Aw warned that the average PMI, 38.3, for the first quarter suggested the territory “had fallen deeper into recession” and that the downturn could worsen as drastic measures were taken around the world to control the outbreak.
Bolsonaro furious over health minister’s contradictions
Andres Schipani in São Paulo
Brazil’s hard-right president Jair Bolsonaro on Thursday night excoriated his independent-minded health minister, who publicly opposed his leader’s calls to loosen quarantine restrictions.
Mr Bolsonaro said Luiz Henrique Mandetta, a medical doctor and congressman, “wants to do what he wants a lot. It may be that he is right. It may be. But he is lacking a little humility to lead Brazil in this difficult time”.
The two men have been at loggerheads since Mr Bolsonaro shrugged off social distancing recommendations and rubbed elbows with supporters two weeks ago. The president has repeatedly played down Covid-19 as “sniffles” and keeps calling for the re-opening of shuttered businesses to keep the fragile economy afloat.
This has undermined Mr Mandetta who has turned into Brazil’s equivalent of what the widely respected head of the US National Institute of Allergy and Infectious Diseases, Anthony Fauci is to US President Donald Trump.
“This is no threat to Mandetta,” said Mr Bolsonaro. “If he does well, no problem. But no minister of mine is inexcusable. Everyone can be fired, as five have already left. I think Mandetta should listen to the president of the republic a little more.”
However, a survey published last week by Datafolha showed that 55 per cent of Brazilians polled rated Mr Mandetta’s performance in the face of coronavirus as “great” or “good”, overshadowing Mr Bolsonaro, who scored only 35 per cent.
The number of confirmed cases in Brazil has more than quadrupled in less than a week to almost 8,000.
White House set to urge wearing of cloth masks in public
Lauren Fedor in Washington
The White House coronavirus task force is debating issuing new guidance encouraging all Americans to wear cloth face masks when they leave their homes.
After US media reported that new rules could come as soon as this week, president Donald Trump told reporters at the White House on Thursday evening that a “recommendation is coming out” but individuals “can pretty much decide for themselves right now”.
At one point, the president suggested that wearing scarves in public may be “better” than fabric face masks because they are “thicker”.
However, Deborah Birx, the medical doctor who leads the White House coronavirus task force, cautioned that any mask recommendations would be in addition to current guidance for Americans to practice “social distancing” and wash their hands frequently.
“The most important thing is the social distancing and washing your hands, and we don’t want people to get an artificial sense of protection, because they’re behind a mask,” Dr Birx said.
“Remember, your eyes are not in the mask,” she added. “So if you’re touching things and then touching your eyes, you’re exposing yourself in the same way. So we don’t want people to feel like, oh, I’m wearing a mask, I’m protected and I’m protecting others.”
Asia-Pacific stocks track Wall Street gains
Stock markets in Asia-Pacific rose on Friday following gains on Wall Street amid hopes that Russia and Saudi Arabia could resolve an oil price war.
In Japan, the Topix was up 0.9 per cent in early trading, South Korea’s Kospi added 0.8 per cent and Australia’s S&P/ASX 200 also gained 0.8 per cent.
The US benchmark S&P 500 ended 2.3 per cent higher on Thursday following a choppy day with energy stocks leading the way as oil prices surged. Oil prices jumped by nearly 50 per cent after US President Donald Trump said he expected Russia and Saudi Arabia to announce production cuts.
There were also new figures showing the impact of the pandemic on the US economy, as the country’s unemployment data showed a record 6.6m jump in claimant numbers.
Non-farm payrolls set to be released later on Friday will give more pointers, although the period covered fell before the US outbreak intensified.
S&P 500 futures were down 0.6 per cent on Friday morning.
News you might have missed
The global total of confirmed cases with coronavirus surpassed 1m, as 66,874 cases were diagnosed so far on Thursday. The virus, which started in China and quickly spread around the globe, has claimed more than 50,000 lives. Some countries are seeing signs of the cases slowing down. However, the US is seeing daily increases in excess of 20,000.
The US navy dismissed the captain of an aircraft carrier after he appealed for help to combat an accelerating coronavirus outbreak aboard his nuclear-armed ship. Acting Navy secretary Thomas Modly said Captain Brett Crozier of the USS Theodore Roosevelt was suspended from duty after it was determined he made public a letter warning of the risks to his crew from coronavirus. “He did not take care to ensure that it couldn’t be leaked and that’s part of his responsibility,” said Mr Modly.
The forced closure of Tesla’s US assembly plant last month didn’t make as big a dent in new vehicle deliveries in the first quarter as Wall Street had feared. The news sent the electric carmaker’s highly volatile shares up nearly 18 per cent in after-market trading on Thursday, though they are still 45 per cent below the peak hit earlier this year. Tesla said it managed to get 88,400 cars to customers in the first three months of the year — about 9,000 fewer than investors had been expecting before the crisis hit.
US stocks snapped a two-day losing streak, recovering from mid-afternoon losses, as oil prices recorded their largest single-day rise on record. The S&P 500 closed 2.3 per cent higher in a rally fuelled by the energy sector, which jumped more than 9 per cent. The Nasdaq Composite was up 1.7 per cent, and the Dow Jones Industrial Average advanced 2.2 per cent. Shares in energy companies rallied in tandem with oil prices. Brent crude settled 21 per cent higher at $29.94 per barrel after Donald Trump raised the market’s hopes for an agreement between Saudi Arabia and Russia on supply curbs.
New Yorkers have been urged by mayor Bill de Blasio to wear face masks or similar coverings when they venture outside into what has become a global coronavirus hotspot. “We’re advising New Yorkers to wear a face covering when you go outside and will be near other people,” Mr de Blasio said at a press conference on Thursday. “Let’s be clear: this is a face covering. It could be a scarf, it could be a bandana, something you create yourself: It does not need to be a professional surgical mask.”
Peru has joined Panama in allowing men and women out on alternate days in a bid to combat the coronavirus, Peruvian president Martín Vizcarra said on Thursday. Men will be allowed to leave their homes on Mondays, Wednesdays and Fridays to shop for essential items while women can go out on Tuesdays, Thursdays and Saturdays. On Sundays, everyone has to stay at home. Panama, in Central America, brought in a similar rule earlier this week.
The first World Bank emergency funds have been approved to help developing countries fight the pandemic, with $1.9bn to support projects in 25 countries and projects in another 40 countries close to approval. David Malpass, the bank’s president, said the board on Thursday approved projects in 25 countries to address the immediate healthcare consequences of the Covid-19 pandemic. Of the 76 poor countries that qualify for assistance under the Bank’s International Development Association, another 40 had also applied for assistance.
Hong Kong is to shut bars and pubs from Friday for 14 days. Authorities said 69 confirmed Covid-19 cases were related to bars, leading to secondary, tertiary and quaternary infections. People who violate the order, which comes into effect at 6pm local time on Friday, are subject to a maximum fine of HK$50,000 (US$6,400) and imprisonment for six months.
