Governments And Central Banks Continue Measures To Combat Impact From Virus

Notes/Observations

• Govt and central banks continue measures to combat impact from virus
• Awaiting US House 2 hour debate/vote on the $2.0T coronavirus package (set to begin around 09:00 ET/13:00 GMT)

Asia:

• RBI became the latest monetary authority to ease policy, cutting its benchmark rate by 75bps to 4.40% at an emergency meeting
• Australia PM Morrison stated that was planning a 3rd round of economic stimulus; Tightens enforcement on self-isolation for citizens returning from overseas and noted that all new arrivals to be quarantined for 2 weeks
• Japan PM Abe stated that sought to take bold steps to reach V-shaped recovery; a 2-year delay to Olympics would put Japan at risk for losing momentum
• China authorities lifted transport restrictions in Hubei province, except Wuhan (as expected)

Coronavirus:

• Global cumulative cases at 532.7K (+12.9% d/d); cumulative deaths 24.1K (+13.0% d/d)
• China cumulative cases at 82.1K (+0.1% d/d); cumulative deaths 3,298 (+0.2%)
• US cumulative cases at 86.0K
• Italy cumulative cases at 80.6K

Europe:

• EU leaders ended after Italy and Spain rejected the initial draft . EU leaders said to give Finance Ministers two weeks to work out the technical details for bailout fund credit lines as part of response to coronavirus pandemic
• Italy PM Conte said to seek more coronavirus solutions from EU leaders and was unwilling to sign off on EU summit draft on economic response. Conte wanted ‘innovative’ financial instruments that were truly adequate to counter the pandemic impact; not the tools of the past
• Germany Chancellor Merkel: impact of coronavirus is likely to be bigger than the 2008 financial crisis; the ESM was created to address this kind of crisis
• Chancellor of the Exchequer (Fin Min) Sunak announced his support measure for self employed and would pay self-employed taxable grant of 80% of avg monthly profits of last 3 years, would be open to those with trading profits up to £50K. Aim for self-employed support to be ready start of June, scheme to cover 95% of those who make their money by self-employment; cost of plan to be tens of billions of pounds (Note: officials estimated that support for the self employed will cost £3B/month)

Americas:

• G20 Statement from teleconference: G20 will do whatever it takes to overcome the coronavirus pandemic
• White House adviser Conway stated that President Trump had raised possibility of fourth coronavirus bill
• Some Lawmakers said to have asked President Trump to delay all tariffs for 90-days (Reminder: reports circulated that President Trump was considering a 90-day deferral of tariffs on all imported goods from “around the world”)
• US House expected to debate stimulus bill for 2 hours starting at 09:00ET (13:00GMT) on Friday (March 27th), unclear if the bill would be able to pass through a voice vote as some Democrats might request a recorded vote; there were talks about a possible roll-call (recorded) vote if a voice vote was blocked
• President Trump: G20 leaders expressed ‘tremendous spirit’ to get coronavirus ‘over with’; to have more information next week on relaxing social distancing

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

• Indices [Stoxx600 -2.4% at 313.5, FTSE -3.8% at 5594, DAX -2.1% at 9790, CAC-40 -3.1% at 4405, IBEX-35 -2.80% at 6836, FTSE MIB -1.9% at 17046, SMI -1.8% at 9034, S&P 500 Futures -2.0%]
• Market Focal Points/Key Themes: European stocks open lower across the board and remained lower during the session; Financials and materials among worst performers; UK largest online clothing retailers suspends operations; French FinMin to pressure companies to not pay dividends, companies with government holdings will not declare dividend; Reportedly Italy considering additional €30B second stimulus package; upcoming earnings expected in the US session include Omnova

Equities

• Consumer discretionary: City Pub CPC.UK +17.0% (placing), Essilor Luxottica EL.FR -6.7% (withdraws guidance), Flutter Enetertainment FLTR.UK -6.0% (merger update), Gattaca GATC.UK -18.2% (results), Prosieben PSM.DE +8.5% (reoganization), Restaurant Group RTN.UK -4.3% (analyst action)
• Energy: Nostrum Oil & Gas NOG.UK +1.2% (CFO resigns)
• Financials: Mattioli Woods MTW.UK +13.3% (coronavirus update), Provident Financial PFG.UK -14.2% (coronavirus update)
• Industrials: Royal Mail RMG.UK -7.9% (coronavirus update)
• Telecom: Deutsche Telekom DTE.DE -1.7% (analyst action)

Speakers

• EU’s Dombrovskis: Europe’s response to coronavirus had been comparable to US measures. EU to work on exit strategy for crisis
• Greece Fin Min Staikouras stated that issuance of coronabonds would be an important tool to combat the crisis. Saw Greek 2020 GDP contracting by around 3%
• Malaysia PM Yassin unveiled a MYR250B stimulus package to combat coronavirus impact
• India PM Modi: RBI had taken steps to safeguard the economy (**Note: refered to recent emergency rate cut)
• Japan Fin Min Aso stated that would need to take measures against coronavirus. Economic response should be in two stages but size not yet determined
• China President Xi stated after a phone call with President Trump that China was willing to support the US on virus control. Told President Trump that China had been open and transparent regarding the epidemic. China was willing to enhance its macro-economic policy coordination to stabilize the market and secure growth . He noted that the relationships between two countries were at critical juncture, hoped US took steps to improve the relationship
• Russia Dep Energy Min Sorokin: OPEC+ oil production cut proposal might have kept oil $5-7/barrel higher. Oil demand decline might reach up to 20M bpd in coming weeks. OPEC+ charter remained in place but cautioned that OPEC+ measures alone could not help oil market to re balance (**Reminder: Oil prices have plummeted in the aftermath of the global coronavirus outbreak and numerous global lock downs that have ensued)
• Algeria Oil Min said to propose that OPEC hold a teleconference call no later than Apr 10th

Currencies/ Fixed Income

• Dollar was heading for its worst week since 2009 as liquidity concerns were easing. Greenback softening over the week as steps taken on global monetary and fiscal fronts as well as the easing of the USD funding squeeze eased the demand for safe-haven flows for the time being.
• The Japanese Yen saw some strong demand from Japanese exporters ahead of the country’s the fiscal year end on March 31st. USD/JPY tested 108.25 before settling down

Economic Data

• (FI) Finland Mar Consumer Confidence: -7.1 v -4.5 prior; Business Confidence: -6 v -4 prior
• (NO) Norway Feb Retail Sales (includes auto/fuel) M/M: 2.0% v 0.5%e
• (TR) Turkey Mar Economic Confidence: 91.8 v 97.5 prior
• (VN) Vietnam Q1 GDP Y/Y: 3.8% v 5.1%e
• (VN) Vietnam Mar CPI Y/Y: 4.9% v 5.0% e
• (VN) Vietnam Mar Trade Balance: $1.0B v $0.1B prior; Exports Y/Y: -12.1% v +34.0% prior; Imports Y/Y: -10.1% v +26.0% prior
• (FR) France Mar Consumer Confidence: 103 v 91e (**Note: survey taken before lockdown)
• (RU) Russia Narrow Money Supply w/e Mar 20th (RUB): 11.28T v 11.12 T prior
• (HU) Hungary Feb Unemployment Rate: 3.5% v 3.4%e
• (SE) Sweden Feb Retail Sales M/M: 0.2% v 0.9% prior; Y/Y: 2.8% v 2.7% prior
• (IS) Iceland Mar CPI M/M: 0.2% v 0.9% prior; Y/Y: 2.1% v 2.4% prior
• (AT) Austria Mar Manufacturing PMI: 45.8 v 50.2 prior
• (IT) Italy Mar Consumer Confidence Index: 101.0 v 100.5e; Manufacturing Confidence: 89.5 v 88.0e; Economic Sentiment: 81.7 v 97.8 prior

Fixed Income Issuance

• None seen

Looking Ahead

• 06:00 Major central banks daily 3-month USD Liquidity Operation allotments
• 06:00 (EU) Daily Euribor Fixing
• 06:00 (FR) France Debt Agency (AFT) announcements on upcoming issuance (bills, Oats)
• 06:00 (IT) Italy Debt Agency (Tesoro) to sell €7.0B in 6-month Bills; Avg Yield: % v -0.287% prior; Bid-to-cover: x v 1.58x prior (Feb 26th 2020)
• 07:00 (UK) DMO to sell £6.5B in 1-month, 3-month and 6-month bills (£1.5B, £2.0B and £3.0B respectively)
• 07:00 (IE) Ireland Feb Retail Sales Volume M/M: No est v -3.4% prior; Y/Y: No est v 3.7% prior
• 07:45 (US) Daily Libor Fixing
• 07:30 (IN) India Weekly Forex Reserve w/e Mar 20th: No est v $481.9B prior
• 08:00 (MX) Mexico Feb Trade Balance: +$1.6Be v -$2.4B prior
• 08:00 (BR) Brazil Feb PPI Manufacturing M/M: No est v 0.1% prior; Y/Y: No est v 5.4% prior
• 08:00 (IN) India announces upcoming bill issuance (held on Wed)
• 08:30 (US) Feb Personal Income: 0.4%e v 0.6% prior; Personal Spending: 0.2%e v 0.2% prior; Real Personal Spending (PCE): 0.2%e v 0.1% prior
• 08:30 (US) Feb PCE Deflator M/M: 0.1%e v 0.1% prior; Y/Y: 1.7%e v 1.7% prior
• 08:30 (US) Feb PCE Core Deflator M/M: 0.2%e v 0.1% prior; Y/Y: 1.7%e v 1.6% prior
• 08:30 (BR) Brazil Feb Total Outstanding Loans (BRL): 3,462Te v 3.463T prior; M/M: +0.3%e v -0.4% prior; Personal Loan Default Rate: No est v 4.9% prior
• 09:00 (UK) Daily Baltic Dry Bulk Index
• 09:00 (ES) Spain Debt Agency (Tesoro) announces upcoming issuance
• 09:00 (US) House begins debate on $2.0T coronavirus package
• 10:00 (US) Mar Final University of Michigan Confidence: 90.0e v 95.9 prelim
• 12:00 (EU) Potential sovereign ratings after European close (Moody’s on South Africa, Sweden and Hungary Sovereign Debt; S&P on Saudi Arabia Sovereign Debt; Fitch on UK, Poland and Estonia
• 13:00 (US) Weekly Baker Hughes Rig Count data
• 15:00 (AR) Argentina Jan Supermarket Sales Y/Y: No est v -6.3% prior; Shop Center Sales Y/Y: No est v -6.8% prior
• (CO) Colombia Central Bank Interest Rate Decision: Expected to cut Overnight Lending Rate by 25bps to 4.00%