Closed Coronavirus: Daily US death toll hits new high of 2,492 — as it happened

U.S. President Trump leads daily coronavirus response briefing at the White House in Washington

Global cases of Covid-19 surpassed 2m on Wednesday, with fatalities rising above 120,000

Physical distancing may be needed beyond 2022 without treatments, Harvard research suggests

Clive Cookson in London

The world is likely to need rolling, on-off programmes of social distancing until at least 2022, unless effective Covid-19 treatments or vaccines become available on a large scale, according to new modelling published in the journal Science by epidemiologists at Harvard University.

The study, led by Marc Lipsitch, combined data for seasonality, immunity and other characteristics of related coronaviruses (which cause nothing worse than common colds) with assumptions about Sars-CoV-2, the virus responsible for Covid-19.

Though many uncertainties remain about how strongly the human immune system will respond to infection by the new virus – and how long any protection will last – the study “projected that recurrent wintertime outbreaks of Sars-CoV-2 will probably occur after the initial, most severe pandemic wave.”

If so, social distancing might need to be imposed repeatedly to prevent health systems being overwhelmed by Covid-19 patients.

Mark Woolhouse, professor of infectious disease epidemiology at the University of Edinburgh, said: “This is an excellent study [but] it should be regarded as suggesting possible scenarios rather than making firm predictions.”

South Korea polls open under strict coronavirus measures

Edward White in Wellington

The polls have opened in South Korea’s legislative elections on Wednesday morning with strict anti-coronavirus protections in place across the country.

South Korea, which has been praised for its use of mass testing, high-tech contact tracing and widespread self-isolation measures, on Tuesday reported 27 new cases, down from a peak of more than 900 in late February. But the voting for the country’s 300-seat National Assembly comes as Seoul’s health officials continue to urge caution over the risk of further outbreaks.

Mask-wearing voters entering more than 14,000 polling stations must stand at least one metre apart from their fellow citizens, have their temperature checked and wear plastic gloves.

To further minimise the risk of infections, special locations have been set up for anyone with a body temperature above 37.5 degrees or respiratory problems — symptoms of Covid-19 — as well as for those already in medical facilities and quarantine to cast their ballot away from the general public. An extensive early voting system was held over recent weeks to maximise voter participation among those worst-affected by the virus.

The elections are viewed by many experts as a referendum on the handling of the coronavirus outbreak by Moon Jae-in, the president, his government, and the Democratic party which currently holds the biggest share of seats in the National Assembly with 120.

Recent polling has suggested that the government’s containment of what was one of the worst outbreaks outside of China, and subsequent international praise, will buoy the leftwing and progressive candidates affiliated with Mr Moon and the Democratic party.

Asia-Pacific stocks lose steam

Asia-Pacific stocks lost momentum on Wednesday, retreating from the previous day’s gains that were driven by a focus on the potential easing of lockdowns in countries worst hit by the coronavirus pandemic.

The Topix in Japan was down 0.4 per cent in early trading and the S&P/ASX 200 in Australia nudged up 0.1 per cent.

The S&P 500 closed 3.1 per cent higher overnight as attention turned to the prospects for a gradual reopening of virus-hit economies even as the IMF forecast the coronavirus outbreak would leave lasting scars on global growth.

JPMorgan Chase and Wells Fargo shares both slipped after the two banks reported a sharp fall in first-quarter profits as the lenders readied for the effects of the coronavirus outbreak.

Futures point to a 0.5 per cent fall for the S&P 500 when it reopens.

News you might have missed

Donald Trump said he would “authorise” governors to reopen US states, one day after insisting he had “total” authority as US president to lift coronavirus restrictions, even though the US constitution leaves such rights and responsibilities to state governors.

The US recorded its highest number of coronavirus deaths in a single day, with nearly 2,300 new fatalities pushing the cumulative total above 25,000. Over the past 24 hours, a further 2,299 people died, according to the latest data from the Covid Tracking Project, taking the total to 25,668.

An Amazon worker has died from coronavirus, the company has confirmed. The employee was a manager at the company’s delivery station in Hawthorne, Los Angeles. He died on March 31, the first known case of an Amazon worker succumbing to the virus, though a timeline of his movements suggests he did not contract Covid-19 at the facility.

The IMF has granted a request from El Salvador for $389m in emergency aid to combat the pandemic, its first disbursement under a lending arrangement to the Central American country in more than three decades. The fund said it stood ready to provide “further support as needed”.

The US Treasury department has reached an agreement with US airlines that paves the way for the sector to receive billions of dollars of aid to cover payroll costs during the pandemic, according to a person familiar with the matter.

South Africa cut off state funding for the beleaguered national flag carrier, South African Airways, effectively sealing the airline’s fate after the pandemic grounded its flights.

France summoned Lu Shaye, China’s ambassador in Paris, for a meeting on Tuesday to protest against the embassy’s recent hostile comments and propaganda over the coronavirus pandemic.

China reports 8 new local coronavirus cases in province bordering Russia

Health authorities in China reported 46 new coronavirus cases to the end of Tuesday, roughly half the previous day’s tally, including eight locally transmitted cases in the northern province of Heilongjiang.

Heilongjiang, which borders Russia, has reported a spike in imported cases in recent weeks as Chinese citizens return to the country over the now-closed Suifenhe city land border in the province, highlighting the challenge of preventing a second wave of infections.

Almost 250 confirmed coronavirus infections were found in people who had flown from Moscow to Vladivostok and then entered Suifenhe over land, according to a state television interview with the city’s acting mayor. He said that around 15 per cent of those who used the land border since centralised quarantine was implemented on March 21 carried the virus, a figure that includes people who tested positive for coronavirus but showed no symptoms.

The southern province of Guangdong reported two locally transmitted infections and the remaining new cases were imported.

The number of coronavirus cases recorded in China now totals 82,295. There was one new death from Covid-19 on Tuesday, taking the number of fatalities to 3,342.

Coronavirus shortages prompt Australia to bring manufacturing home

Jamie Smyth in Sydney

Australia has been forced to rethink its industrial policy after an acute shortage of ventilators and protective equipment exposed what critics labelled its “dependence” on China.

As part of the country’s effort to tackle its coronavirus outbreak, Canberra has promised to nurture local manufacturing to ensure it is less reliant on global supply chains.

“Open trading has been a core part of our prosperity over centuries,” Scott Morrison, Australia’s prime minister, told parliament. “But equally, we need to look carefully at our domestic economic sovereignty as well.”

Canberra has tightened restrictions on foreign takeovers and is now trying to ensure it can source critical raw materials, make vital components and manufacture the medical products required to boost self-sufficiency during crises.

Read the full report here.

Singapore makes it mandatory to wear masks in public

Mercedes Ruehl in Singapore

Singapore has made it mandatory for people to wear masks at all times outside their homes as the city state battles a surge in locally-transmitted cases of coronavirus.

The government late on Tuesday introduced new penalties, including a first warning fine of S$300 ($212) for those who do not wear masks outside unless they are under the age of two or if they are engaged in strenuous exercise such as running.

The Asian city state now has 3,252 confirmed cases of the virus and reported its 10th fatality linked to Covid-19 on Tuesday. More than 500 people have been fined and 6,200 have received warnings for flouting safe distancing measures since stricter isolation rules were introduced on April 7.

The Singapore government initially urged only those who were ill to wear masks with government leaders saying in January that the general public would be better protected by washing their hands with soap and water regularly.

The shift also follows a leaked audio recording of Singapore’s trade minister mocking Hong Kong leader Carrie Lam for wearing a surgical mask at a press conference in February.

Singapore had already started recommending the use of masks and making it mandatory on public transport and crowded areas such as supermarkets earlier in April after the World Health Organisation also reversed course and encouraged government initiatives that require or encourage the public wearing of masks.

China cuts key lending rate to record low

Hudson Lockett in Hong Kong

China’s central bank cut its key lending rate to a record low, with policymakers in Beijing seeking to boost liquidity in the country’s financial system as they attempt to mount an economic recovery from coronavirus-induced lockdown.

The People’s Bank of China cut its one-year medium-term lending facility rate by 0.2 percentage points to 2.95 per cent, the lowest level since its introduction in 2014.

The MLF rate is important because it not only injects liquidity into China’s interbank market, it also serves as a floor for the new lending benchmark introduced last year — the loan prime rate.

The LPR, which is based on the average lending rate provided to the best customers of commercial banks, has typically followed the MLF rate lower after a cut. It is published on the 20th of every month, with the next release slated for Monday.

Foreign visitors to Japan drop by 90% in March amid travel restrictions

Robin Harding in Tokyo

The number of foreigners entering Japan fell by more than 90 per cent in March compared with a year earlier as coronavirus brought international travel to a standstill, according to preliminary figures from the Immigration Services Agency.

Entries at Japanese ports and airports fell to 217,671 compared with almost 2.8m in March 2019, highlighting the scale of the drop in travel and tourism. The number of Chinese arrivals fell to 12,272, compared with 649,137 a year earlier.

Japan began to impose travel restrictions on parts of China in early February, but during March it also closed its borders to parts of Korea, Iran and the Schengen travel area of the European Union. It now refuses entry to travellers from 73 countries, including the US.

Almost all of the remaining traffic went via Tokyo’s Haneda and Narita airports, with regional hubs popular with Asian tourists, such as Kansai and Fukuoka airports, seeing almost no international traffic.

Toilet paper maker expects 65% rise in first quarter net profit

Primrose Riordan in Hong Kong

Vinda International Holdings, the maker of one of China’s biggest toilet paper brands, expects its net profit to increase by 65 per cent in the first quarter compared to the same period last year.

In a statement to the Hong Kong stock exchange on Wednesday, the company said the improved forecast was mainly due to the lower cost of pulp as well as an improvement in its product range. It said it expected a net profit of HK$377m ($48.6m) for the period.

Hong Kong was among the first locations to report a run on toilet paper, which started after people spread rumours on social media that factories making the product were being converted into face-mask plants, sparking fears of shortages.

Thailand extends closure of airspace for incoming passenger flights

John Reed in Bangkok

Thailand has extended its shutdown of airspace to incoming commercial passengers until April 30, the third such extension of a restriction first imposed on April 3.

The Civil Aviation Authority of Thailand announced the move on Wednesday morning, and the current ban on flights had been due to end on April 18.

Repatriation flights for returning Thais, state or military aircraft, humanitarian and medical flights, and cargo flights will still be allowed to land, the CAAT said.

Bangkok is normally one of the world’s most visited cities, but coronavirus-related shutdowns around the world have devastated its tourism industry and brought Thai Airways, the lossmaking national carrier, to the brink of collapse.

The International Monetary Fund forecasts Thailand’s economy will shrink by 6.7 per cent this year, its worst performance since 1998.

Healthcare product provider shares fall 25% on Hong Kong debut

Primrose Riordan in Hong Kong

Shares in a company touting itself as a pandemic-proof healthcare product provider fell more than 25 per cent on Wednesday on the company’s Hong Kong debut.

Tycoon Group Holdings, which sells hand sanitiser, surgical masks and probiotics that the company claims will enhance immunity, touched a low of HK$1.11 at 10am Hong Kong time, 25.5 per cent lower than its HK$1.49 offer price. They had recovered slightly to trade at HK$1.14 before midday.

“Our Directors believe that the . . . [coronavirus-related] additions to our product portfolio demonstrate our ability to provide products that answer the prevailing market needs, and attest to the elasticity in our business operations and the resilience of our business model,” the company said in documents supporting its initial public offering.

Chinese airlines report $4.8bn loss in first quarter

Nicolle Liu in Hong Kong

Chinese airlines reported a combined loss of Rmb33.62bn ($4.8bn) in the first quarter as national and global lockdowns hit demand, according to the Civil Aviation Administration of China.

The total number of passengers fell 53.9 per cent in the first quarter from the same period a year earlier to 74m, said Xiong Jie, an official with the CAAC. Passenger volumes in March were particularly badly affected, dropping by 71.7 per cent from the same month last year, he added.

A large part of China was in lockdown during the quarter and many countries and regions have imposed travel restrictions on the country to curb the spread of coronavirus.

Authorities also placed restrictions on international flights in late March to curb a growing number of imported cases from overseas. There are now less than 20 international flights and only 2,000-3,000 people landing each day, said Sun Shaohua, another official from CAAC.

China to study extent of coronavirus infections in 9 regions

Yuan Yang in Beijing

China has launched a major epidemiological survey of the novel coronavirus across nine different parts of the country, state media reported on Wednesday. The survey will be the first globally to cover such a large geographical region, although the total number of people to be tested is unclear.

Epidemiologists worldwide have been calling for random surveys in order to get a more representative view of the spread of the virus than different countries’ treatment programs currently offer, given that only a fraction of the total infected population may ever visit a hospital for testing.

China Daily reported that Wuhan, the city where the global outbreak began, will test residents randomly. The nationwide survey is to “evaluate the scale of asymptomatic infections and immunity levels across the population”, China Daily said.

The survey will include taking throat swabs to test for the presence of the virus, as well as antibody tests to ascertain whether residents have had immune responses to the virus.

Wuhan will enroll 11,000 of its 11 million residents in the survey, and is due to finish collecting samples on Thursday. The majority of participants will be ordinary residents, with a small number of “virus control workers” such as security guards and taxi drivers, China Daily reported.

The nine regions involved in the cross-country survey are the cities of Wuhan, Beijing, Shanghai and Chongqing, as well as the provinces of Liaoning in the northeast, Jiangsu and Zhejiang on the eastern coast, Guangdong in the south, and Sichuan in the west.

Coffee climbs as locked-down consumers seek caffeine fix

Emiko Terazono in London and Andres Schipani in São Paulo

The coronavirus pandemic set off a scramble for coffee beans last month as roasters worked flat out to meet demand from stockpiling consumers while shutdowns disrupted supply.

José Marcos Magalhães, head of Brazil’s second-largest coffee co-operative Minasul, watched shipments to Europe and North America surge. Minasul had been expecting to ship 400,000 bags (each containing 60kg of beans) for the whole of 2020, but its orders rose past that level in March.

Mr Magalhães now expects international sales for the year to top 800,000 bags — more than double last year’s 360,000. “We are having very high demand, mainly from Europe . . . consumption has increased a lot in supermarkets in the USA, and they want to replenish stocks,” he said.

Having fallen at the start of the crisis as China’s cafés shut their doors, coffee prices have rebounded as large coffee roasters such as Nestlé, JAB and Lavazza rushed to secure beans.

Read the full story here.

Fujifilm to boost manufacture of flu drug used for Covid-19 patients

By Kana Inagaki in Tokyo

Fujifilm said it plans a 2.5-fold increase in manufacturing capacity for its anti-flu drug Avigan, which has been used for treating patients with Covid-19, by July.

Avigan, which has the generic name favipiravir, has gained global attention after recent clinical trials in China suggested it could be an effective treatment for coronavirus. Similar clinical trials are now underway in Japan and the US.

In a statement on Wednesday, the company said it expected to increase monthly production of Avigan treatment courses to 100,000 by July, about 2.5 times more than the production rate achieved at the beginning March, and to 300,000 by September.

The Japanese group said its pharmaceutical unit, Fujifilm Toyama Chemical, had already started expanding production and that it would allocate additional capacity at a facility of its chemicals unit to make pharmaceutical intermediates used to manufacture Avigan.

Japanese regulators approved Avigan in 2014, but its manufacture and distribution continues to come under the control of Japanese authorities due to potential side effects.

“Fujifilm continues to respond to requests from the Japanese government, and will also engage with other countries after consultation with Japanese government,” it said in the statement.

In an interview with the Financial Times in March, Junji Okada, president of Fujifilm Toyama Chemical, had said the company had made emergency preparations so that it could boost production if requested.

UK’s Labour calls for lockdown exit strategy

George Parker, Political Editor

Labour leader Keir Starmer has urged the government to publish its exit strategy this week, warning that the “silent pressures on families and communities across the country cannot be underestimated”.

In a letter to the foreign secretary Dominic Raab, who is deputising for the prime minister, Sir Keir said Labour would support the government’s decision to extend the lockdown, but called for the release of a strategy to ease restrictions when possible.

His call comes ahead of a meeting of ministers on Thursday at which the current lockdown will be extended into next month, with another review expected around the time of the VE Day bank holiday weekend starting on May 8.

But one government official said: “Talk of an exit strategy before we have reached the peak [of virus related deaths] risks confusing the critical message that people need to stay at home in order to protect our NHS and save lives.”

Ministers say they need more data to decide how and when to ease restrictions and have yet to agree a policy over which economic sectors and parts of society – such as schools – should be released first from the lockdown.

European shares set for muted open

The rally in global stocks wavered ahead of the European trading session, with the region’s main bourses all set for moderate losses at the open.

Futures trade pointed to a fall of 0.3 per cent for London’s FTSE 100, while markets in France and Germany were set to record similar declines.

The European composite Stoxx 600 index has risen in each of the past five trading sessions, as investors have welcomed signs that the spread of Covid-19 infections could be peaking, despite evidence the virus has wrought significant economic damage.

The IMF said on Tuesday that the world was facing its sharpest economic contraction since the 1930s, while overnight US president Donald Trump said the US would pull funding from the World Health Organization.

Asia shares were mixed, with Hong Kong’s Hang Seng falling 0.8 per cent, Japan’s Topix flat and South Korea’s Kospi up 1.7 per cent. Futures trade pointed to a decline of 0.8 per cent for the S&P 500 on Wall Street later in the session.

Bill Gates: World needs WHO ‘now more than ever’

Microsoft founder Bill Gates has criticised president Trump’s decision to suspend funding for the World Health Organization.

“Halting funding for the World Health Organization during a world health crisis is as dangerous as it sounds,” the prominent healthcare philanthropist and co-chair of the Bill & Melinda Gates Foundation said in a message posted to Twitter.

The US president has accused the global health body of “severely mismanaging” the coronavirus pandemic and said hundreds of millions of dollars in US funding would be suspended while a review was conducted into the WHO’s work.

The FT interviewed Mr Gates recently on the coronavirus outbreak, and the global response to it. Here is the full video:

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Indian stocks rise as government plans to ease lockdown

Amy Kazmin, South Asia Bureau Chief

Indian stocks rose after prime minister Narendra Modi’s government outlined a plan for the gradual reopening of the country’s economy, which has been at a near standstill since the abrupt imposition of a nationwide curfew on March 24.

The benchmark Nifty index on the Bombay Stock Exchange gained as much as 2.7 per cent, even as other indices in Asia-Pacific were largely muted.

Mr Modi’s government has been wrestling with the challenge of how to balance the need for controls on public movement to slow the spread of the deadly pathogen with the urgent need to begin to revive an economy that was has been at a near total halt for the last three weeks, leaving millions of people with no income at all.

Under the plan released by the ministry of home affairs on Wednesday, some industries, agricultural work and other economic activities will be allowed to resume on a limited basis after April 20, as long as they are in areas that have not been designated as coronavirus “hot spots.”

All public transportation services will remain suspended, and schools, and other public gathering spots will remain closed until the current national lockdown ends on May 3.

Shiseido and Suntory to begin making disinfectant products in Japan

Kana Inagak in Tokyo

Shiseido and Suntory said they plan to dedicate part of their production facilities in Japan to make hand sanitisers and alcohol for disinfectants to address the severe shortage caused by the coronavirus outbreak.

Governments worldwide are calling on various industries to help fill gaps of key medical supplies caused by the rapid spread of Covid-19.

In a statement on Wednesday, Shiseido said it plans to produce 200,000 bottles of hand sanitisers per month at four of its factories in Japan from May to distribute to medical institutions on the front lines of battling the pandemic.

Japan’s largest cosmetics group said it has newly developed a sanitiser that helps to prevent hands from drying, and will begin domestic production from this Friday.

The company is already producing hand sanitisers at its manufacturing facilities in France and in the US.

Separately, Suntory, the world’s third-largest spirits maker, also said it will start providing alcohol that can be used for disinfectants to hospitals and other healthcare facilities from late April.

The move came after the Japanese authorities eased regulations as part of an emergency measure to allow liquids with high alcohol content to be used as disinfectants in hospitals nationwide.

Suntory, which owns US spirits maker Beam, is already producing hand sanitisers at its Jim Beam distillery in Kentucky.

UK corporate news this morning

Jupiter Fund Management suffered net outflows of £2.3bn and a £5.5bn hit from market movements in the first quarter, reducing its assets under management to £35bn due to “challenging market conditions” caused by the coronavirus outbreak. Assets under management by Merian, which Jupiter agreed to acquire in February, decreased to £15.7bn after £2.6bn of net outflows and a £4.2bn reduction in asset values due to market movements in the first three months of the year.

The Financial Conduct Authority sent a letter to insurers underlining that they should assess and “quickly” settle the claims of SMEs to ensure that “financial pressures on policyholders are not exacerbated by slow payment.” It has set up a small business unit to coordinate the financial regulator’s support for smaller firms during the coronavirus pandemic.

Smurfit Kappa Group, a paper and packaging company, has withdrawn its recommendation for a proposed final dividend of 80.9 cent per share. In the first three months of the year, the group achieved €380m ebitda with a group margin of 17.3 per cent.

The board of plumbing group Ferguson has withdrawn the interim dividend due for payment on 30 April 2020 and it suspended its $500m share buyback programme, $100m of which had been completed by the end of March. The company with 85 per cent of revenues from the US said that “within the last ten days the impact of Covid-19 has significantly increased.”

UK regulators pressure insurers to pay up to small businesses

Oliver Ralph in London

UK regulators have waded into the increasingly bitter dispute over business interruption insurance, warning insurers to pay up quickly to small businesses.

Since the crisis started, insurers have said that most companies’ business interruption policies will not cover them for losses caused by the coronavirus crisis. But lawyers who work for policyholders have insisted there are strong grounds to claim and there are growing fears that the dispute could result in lengthy legal battles.

On Wednesday the Financial Conduct Authority said that, where small businesses are covered, the insurers must avoid any delays in payment.

“It is important that claims are assessed and settled quickly,” said Christopher Woolard, the FCA’s interim director, in a letter to industry chief executives.

He also said that the insurers should consider making interim payments to customers. “If you disagree with doing so, we would like you to send to us the grounds for reaching that decision…Your firm’s decision is likely to help inform our assessment of its culture,” he warned.

But Mr Woolard stopped short of ordering insurers to pay out on business interruption policies where coronavirus is not covered. Legislators in the US are considering forcing insurers to pay out on all business interruption policies, regardless of the terms and conditions. Insurers say that such a move would cripple the industry.

Tourism to Hong Kong falls 99% during quarantine

Primrose Riordan in Hong Kong

Hong Kong visitor arrivals dropped by 99 per cent in March compared to the same month last year, as government measures came into effect to stem the flow of the virus into the territory.

The statistics are significant since regulators have warned the economic impact of the coronavirus outbreak could be more serious for Hong Kong than previous epidemics as the city is more reliant on tourism than it has been in the past.

The Hong Kong Tourism Board said that a total 82,000 people arrived in March, mostly during the start of the month when around 3,000 to 4,000 people landed daily. But then in mid-March the government introduced a compulsory two week quarantine on all arrivals from abroad, a move which saw arrivals fall to about 1,000 a day, and then lower to 300 a day from March 25 when non-Hong Kong residents were barred from entry to the territory altogether.

In early April, the board said fewer than 100 people were arriving a day.

Video: how a leading tech designer turned to making rag masks

Loren Brichter invented the Twitter app for iOS and pull-to-refresh. He speaks to the FT about why he’s turned his attentions to finding the most simple and effective rag mask design.

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Russia’s Covid-19 outbreak worsens with total infections nearing 25,000

Henry Foy in Moscow

Russia recorded a new record 3,388 additional coronavirus cases on Wednesday, in a surge that took its total infections to almost 25,000.

The 16 per cent jump marks a fourth consecutive record daily increase as the country struggles to stem the spread of the outbreak.

Twenty-eight people died of the virus overnight, taking Russia’s death toll to 198.
Senior officials have warned that the country is still far from experiencing the peak of the pandemic, which appears to be growing in Russia later than other European countries.

Keir Starmer accuses government of moving ‘too slow’ on coronavirus

Laura Hughes

Labour leader Keir Starmer has accused the government of moving “too slow” and not learning “quickly enough” from other countries’ approach to slowing the spread of coronavirus.

Sir Keir, who is urging the government to publish its lockdown exit strategy this week, said there needs to be “transparency and openness.”

He told BBC Radio 4′s Today programme: “I think that some of the decisions made in the last few weeks were too slow and didn’t learn quickly enough from other countries, let’s not repeat that.”

Speaking earlier on ITV’s Good Morning Britain, he said: “It’s obvious that the lockdown is going to continue and we are going to support the government in that.

“But I do think the question therefore is what comes next? People are trusting the government … but they do need to see light at the end of the tunnel.

“I’m not asking the government for timings, of course, I understand why they can’t give us timings. But we do need the trust of the public as we go forward.”

What you may have missed

The US will suspend funding to the World Health Organization after Donald Trump accused the global health body of “severely mismanaging” the coronavirus pandemic. Bill Gates described the move as “dangerous”.

Ministers are to extend Britain’s lockdown into May on Thursday, with Boris Johnson’s allies warning that the country will have to get used to a “new normal” for months to come as it gradually edges out of the coronavirus crisis.

Rishi Sunak, the UK’s chancellor of the exchequer, said on Tuesday evening that he will keep the government’s much-criticised emergency loan scheme for small businesses “under review” as MPs and businesses call for extensions to state-backed guarantees.

China’s central bank cut its key lending rate to a record low, with policymakers in Beijing seeking to boost liquidity in the country’s financial system to help the economic bounceback from the coronavirus-induced lockdown.

The US Treasury department has reached an agreement with US airlines that paves the way for the sector to receive $25bn in funding to cover payroll costs during the coronavirus pandemic and opens up the possibility of the government emerging as a shareholder in several public companies.

Merkel to discuss lockdown with state leaders

Tobias Buck in Berlin

German chancellor Angela Merkel is due to meet the prime ministers of Germany’s federal states later on Wednesday to discuss when and how to ease the country’s lockdown measures.

Germany reported 2,486 new coronavirus cases on Wednesday, taking the total to 127,584 since the pandemic started.

According to official data from the Robert Koch Institute in Berlin, the number of Covid-19 dead rose by 285 to 3,254. In absolute terms, it was the highest increase in fatalities since the start of the outbreak, though the daily number may have been inflated due to reporting delays over the Easter weekend.

The increase in detected coronavirus infections was again just 2 per cent, in line with recent days and a notable reduction compared to recent weeks.

Sajid Javid urges government to phase out the lockdown

Laura Hughes in London

Sajid Javid, who resigned as chancellor in February, said the government should be trying to “phase out this lockdown as soon as we possibly can”.

Referring to the lockdown, he told BBC Radio 4′s Today programme: “I think it is the right policy because it is based on scientific and medical advice.

“That said, we should be trying to phase out this lockdown as soon as we possibly can, based on that scientific and medical advice.

“Because that will make the biggest immediate difference to the economic pain the country is going through.”

French retail sales tumble by nearly a quarter in March

David Keohane in Paris

French retail sales plummeted 24 per cent in March with shops shut and people told to stay at home to slow the spread of coronavirus.

Sales of industrial goods almost halved, falling by 43 per cent compared to February said the Banque de France on Wednesday, while food sales were down just 0.9 per cent. Supermarkets and other food retailers have largely remained open and busy during the lockdown.

The sharp fall in March drove retail sales for the first quarter down 7.2 per cent compared to the previous three months, with industrial sales down 14.6 per cent, in part due to sales of new cars dropping by 20.7 per cent.

Small businesses saw sales fall 9.6 per cent in the quarter while that of large retailers rose by 1.7 per cent. There was a wide gap between the fortunes of supermarkets, which saw sales up 7.4 per cent, and department stores, which lost 19.3 per cent of their trade.

The retail sales data add weight to the central bank’s estimate from earlier this month that French economic output may have fallen in the first quarter by the sharpest rate since the Second World War.

Oil demand to fall by 9.3m barrels a day in 2020

Anjli Raval in London

Oil demand will fall by 9.3m barrels a day this year versus 2019 even if lockdowns and travel bans to reduce the spread of coronavirus are lifted, slashing a decade of growth as the global economy suffers in a way not seen since the Great Depression.

The forecast from the International Energy Agency comes after top officials at the energy body were involved in negotiations with Opec and G20 nations in recent days over supply curbs and other measures to help alleviate an unprecedented oil crisis.

Opec and Russia agreed to curb production by 9.7m b/d with other more market-driven contributions expected from rival producers outside the so-called Opec+ group, such as the US. Big consumers of oil are also anticipated to make large-scale purchases of oil for strategic storage that could amount to 200m barrels, the IEA said.

Demand in April alone could drop by as much as 29m b/d – nearly a third of pre-crisis demand of around 100m b/d – with a “gradual recovery” expected thereafter.

“There is no feasible agreement that could cut supply by enough to offset such near-term demand losses. However, the past week’s achievements are a solid start and have the potential to start to reverse the build-up in stocks as we move into the second half of the year,” the IEA said.

Although the measures announced by Opec+ and the G20 nations “won’t rebalance the market immediately” they will help to shrink a supply overhang to “help a complex system absorb the worst of this crisis,” the IEA said.

Although oil prices at under $30 a barrel are attractive for consumers, many are unable to benefit while under lockdown, the IEA said. A price crash is detrimental not only for those working in the oil sector but economies dependent on revenues from crude sales.

Free to Read

Analysis: The battle at the heart of British science over coronavirus

In spring of 2001, Britain was wracked by its first large scale epidemic of foot-and-mouth disease since the late 1960s.

Farmers faced the risk of curbs on animal sales, and the possible mass culling of their herds. Much depended on whether the government got on top of the outbreak fast.

The independent modellers quickly exploded the government’s optimistic assumptions, showing the outbreak was on course to be far larger, and to spread faster, than officials expected. But the extent to which modelling helped remains disputed, with some scientists claiming the intervention led to unnecessary culling.

By Jonathan Ford in London

Read the full story here


EU forbids bailed out companies from paying dividends and bonuses

Javier Espinoza in Brussels

Bailed out companies in receipt of equity injections from member states will not be allowed to pay out dividends, buy back shares or pay out bonuses, according to an official document seen by the Financial Times.

The terms and conditions emerged after the FT reported last week that the Commission was exploring a further relaxation of the bloc’s state aid rules to help ailing companies as a result of the pandemic.

Bailed out companies are also forbidden from taking “excessive risks” or even engaging in “aggressive commercial expansion”, a document that sets out amendments to the recent relaxation of the state aid rules said.

Firms will not be able to buy up rivals or other operators in the same sector as long as they have outstanding payments to the state, the document added.

The constraints are aimed at preventing “undue distortions of competition” and mirror similar restraints imposed on the banking sector at the height of the global financial crisis more than a decade ago.

European businesses that receive more than a 20 per cent equity injection from a member state will also be under obligation to set up a clear exit strategy to reduce that stake in the aftermath of the pandemic.

The document added: “If by [31 December 2024] the State’s stake under the Temporary Framework has not been reduced below [15] percent, a restructuring plan shall be notified to the Commission for approval.”

“This is more flexible/lenient than the financial crisis principles where the requirement was generally to submit a restructuring plan within 6 months of the recapitalisation.”

Corporate earnings will be a ‘reality check’ to market rally, says Barclays

There will be “dire” corporate results coming out in the coming weeks and, though these should not be a shock to investors, they are likely to be a reality check after the latest rally, warned analysts at Barclays.

“We advise using potential dips to add exposure selectively and hold a neutral cyclical/defensive stance,” wrote Emmanuel Cau, head of European equity strategy at Barclays. “Rather than worrying about the uncertain guidance, investors should focus on the actions taken by companies to mitigate the collapse in their top lines,” he added.

With central banks ‘all in’, unprecedented government bailouts and signs of a slowing outbreak, a recovery in the second half of the year seems more likely than not, he said. But it will be “bumpy” and business activity and earnings will not return to normal overnight, he warned, adding that a second wave of infections is likely to add further headwinds.

Germany calls for unity as Trump halts US funding to WHO

Guy Chazan in Berlin

Heiko Maas, the German foreign minister, has reacted with dismay to US President Donald Trump’s decision to stop payments to the World Health Organization.

“It doesn’t help to apportion blame,” he said on Twitter. “The virus knows no borders.”

He said all countries must work together closely to stem the Covid-19 pandemic. “One of the best investments is to strengthen the UN, and above all the underfunded WHO, for example in the development and distribution of tests and vaccines,” he said.

Steffen Seibert, spokesperson for Chancellor Angela Merkel, said: “The WHO is doing an incredibly important job at the moment and so the German government is convinced that it is important to support the organisation in its work and to provide adequate financing.”

He added that during a global pandemic it was particularly important to maintain multilateral organisations.

Stock sell-off accelerates

European markets deepened their losses through the morning session, with energy shares falling sharply as the global demand for oil was forecast to plunge.

The FTSE 100 was recently 1.4 per cent lower, while the regional Stoxx 600 index was down 1.2 per cent.

Oil major including Total, BP and Shell each fell more than 5 per cent, while Brent crude was down more than 5 per cent to $28 per barrel.

Within the last hour the International Energy Agency has forecast oil demand will fall by 9.3m barrels a day this year versus 2019 even if lockdowns and travel bans to reduce the spread of coronavirus are lifted.

Global Covid-19 case count surpasses 2m

Steve Bernard in London

Global cases of Covid-19 surpassed 2m on Wednesday, the latest figures from Worldometers show.

Johns Hopkins University has the figure at 1.98m. Newly confirmed cases stayed below 75,000 for the third consecutive day with 73,969 cases being added on Tuesday.

The daily death toll spiked on Tuesday to 6,983, likely due to late reporting over the long Easter weekend. The total loss of life of patients diagnosed with Covid-19 now stands at 121,186.

The UK was again the hardest-hit country outside of the US on Tuesday, with the death toll rising by 778 to 12,107. Turkey is struggling to contain the virus with 4,062 new cases confirmed on Tuesday, the seventh consecutive day with more than 4,000 cases.

Russia is in the acceleration phase of the virus with each day bringing significantly more cases than the previous one. Tuesday’s record of 2,774 newly confirmed cases was eclipsed this morning as a further 3,388 people were diagnosed on Wednesday.

The number of global recovered cases rose by a record 33,883 yesterday, leaving a total of 478,594 free from the virus.

*This post has been amended after an editing error to clarify that it is the total number of cases that has reached 2m.

US military declares a public health emergency in Japan

Robin Harding in Tokyo

The US military has declared a public health emergency across the whole of Japan in response to the growing number of coronavirus cases in the country.

Declaring an emergency gives military commanders the power to enforce public health measures on US bases. Having already declared an emergency in Tokyo last week, the new proclamation extends its reach to large facilities such as the Marine and Air Force bases on Okinawa.

The declaration highlights the unilateral authority of US forces on Japanese soil. Last week’s move in Tokyo pre-empted prime minister Shinzo Abe’s declaration of a state of emergency in seven prefectures including the capital. Most of Japan is still not covered by the state of emergency.

Among developed countries, Japan has had one of the fastest growing Covid-19 outbreaks in recent weeks, with the number of cases rising to 7,964. That prompted Mr Abe to declare the state of emergency, which allowed for a partial lockdown in some cities.

US holds off on IMF plan to boost emerging economies’ finances

James Politi in Washington

The US Trump administration is resisting urgent appeals from European and African leaders for the International Monetary Fund to create additional reserve assets to help low-income emerging economies cope with the coronavirus pandemic, creating a fresh division in the global response to the crisis.

The expansion of the IMF’s “special drawing rights” has arisen as a point of friction in multilateral discussions ahead of the IMF and World Bank spring meetings, which are being held online this week.

A new allocation of SDRs would offer a liquidity boost to many countries facing a sudden depletion of foreign exchange reserves. The move is seen by many governments as a key complement to a debt relief package to support struggling emerging economies that the G20 — including the US — is expected to endorse as early as Wednesday.

Read the full story here.

Scotland makes £120m available in extra support for small businesses

Mure Dickie in Edinburgh

The Scottish government has announced £120m in extra support for small and medium-sized businesses affected by the coronavirus crisis, bowing to pressure from some companies that had complained its emergency grants were less generous than those offered in other parts of the UK.

The UK government offers emergency grants of up to £25,000 for each property a small or medium-sized business operates in the hospitality, retail and leisure sectors. However, Scotland had restricted the grants to one per company, an approach critics said risked the collapse of some small chains.

Kate Forbes, Scotland’s finance secretary, said on Wednesday morning that “having listened carefully” she had made £120m available to pay up to 75 per cent of the grant on second and subsequent properties.

Ms Forbes also announced the creation of a new £100m fund to help newly self-employed people and viable small businesses that were ineligible for other previously announced Scottish or UK government schemes.

More than £1.1bn lent to 6,000 small UK businesses

Daniel Thomas in London

More than £1.1bn has been lent to about 6,000 small firms under the UK’s emergency loans scheme as the government has sought to accelerate lending to businesses to help them survive the coronavirus crisis.

On Wednesday, UK Finance, the trade group for the banking sector, said state-backed lending to SMEs had risen by about £700m in the last week, and loan approvals had doubled in that time.

Lenders have received 28,460 applications from businesses. UK Finance said these are still being processed and many are expected to be approved over the coming days. The average value of a loan is about £185,000.

However, the overall slow takeup of the loans by struggling companies desperate for funds since it launched in March continues to raise questions over how the government designed the scheme.

The chancellor has guaranteed 80 per cent of loans of up to £5m to small businesses to encourage banks to keep lending to firms struggling to keep afloat during the pandemic.

The scheme has been dogged with problems since it was launched a month ago by Rishi Sunak. Companies have needed to meet strict criteria judged on pre-crisis commercial lending terms to access the bank loans, and with many companies also complaining that their applications were taking weeks to process at a time when they were burning through cash.

The government relaunched the scheme last week, removing the need for personal guarantees to access the loans and streamlining the process.

Live Q&A: Coronavirus, Opec and shale — what is the future outlook?

As people stay indoors and businesses close in response to the coronavirus, the global drop in energy consumption has led to crashing oil prices and a sector bracing for a wave of bankruptcies.

In response, Opec and its partners, backed by US President Donald Trump, just a few days ago announced the biggest supply cuts in history — and yet the price of oil continues to fall.

Derek Brower, US energy editor, and Anjli Raval, senior energy correspondent, will today answer your questions relating to the global energy business, what the oil price collapse means and the Opec deal.

For more details click here.

China releases retrospective count of asymptomatic cases

Christian Shepherd in Beijing

China has for the first time released a cumulative count of asymptomatic coronavirus cases, after the government was criticised for not making the figures public.

From the start of the Covid-19 outbreak until April 14, a total of 6,764 infections that do not display clear clinical symptoms have been reported in China, the national health commission said on Wednesday.

That tally included 1,297 cases where patients later developed symptoms and 1,023 individuals under medical observation, while 4,444 people had been allowed to leave observation.

China began releasing a daily count of newly discovered asymptomatic cases on April 1, as fears mounted that infected individuals who did not display symptoms could spread coronavirus after travel restrictions on Hubei province, where the outbreak began, were lifted.

The health commission previously only reported asymptomatic cases currently held in observation, but did not include a retrospective count.

UK approves construction of contentious high-speed railway line HS2

Gill Plimmer in London

The Department for Transport has given the final go-ahead for contractors to start building the first part of Britain’s controversial HS2 high-speed railway line despite the coronavirus lockdown.

In an attempt to shore up the construction industry, the government issued a formal “notice to proceed” on Wednesday that allows contractors to start putting spades in the ground on the first phase of the railway line between London and Birmingham.

Companies will need to follow Public Health England’s guidance on social distancing at construction sites during the coronavirus outbreak, the Department for Transport said in its statement. Around half of construction sites have been closed amid confusion over whether work can continue safely within coronavirus guidelines.

Andrew Stephenson, the HS2 minister, said: ‘While the government’s top priority is rightly to combat the spread of coronavirus, protect the NHS and save lives, we cannot delay work on our long-term plan to level up the country.”

Preparatory and design work for HS2 started 11 years ago but today’s announcement will allow the contractors including Costain, Robert McAlpine and Kier to press ahead with design and construction.

EU to host digital ‘pledging conference’ to raise Covid-19 research funds

Mehreen Khan in Brussels

The EU will host an online “pledging conference” to raise funds for research into Covid-19 on May 4.

Ursula von der Leyen, commission president, said on Wednesday that Brussels would host the donation drive in coordination with non-governmental organizations such as the Gates Trust, the Welcome Foundation and the World Health Organization.

“[The conference] will help address the immediate funding gaps to come up with innovative and equitable solutions,” said Ms von der Leyen.

She was speaking as the commission laid out an exit plan “roadmap” for its members states to coordinate the lifting of containment measures across the EU’s 27 economies. The spread of the virus and its severity mean any easing should remain “gradual”, despite tentative plans to ease restrictions, Ms von der Leyen said.

“Public authorities have to assess very carefully the best time to lift the restrictive measures,” she said.

This is an extremely difficult task. We must resist a one-size-fits-all, but it must be a tailor-made approach. This is not a signal that confinement can be lifted as of now.

The commission president promised “trillions” of euros in investment to fund the post-pandemic recovery from the EU’s next long-term budget.

“We are working on the European budget…which with all its might is able to leverage the necessary money for a huge investment initiative that will be necessary to restart the economic process and rekindle the single market,” said Ms von der Leyen. “The next budget has to be completely different than normal Europeans budgets have been.”

EU leaders will convene a teleconference on April 23 to discuss how to design the budget which has been called a “Marshall Plan” for the EU.

Greece issues seven-year bond to soften pandemic blow

Kerin Hope in Athens

Greece has launched a seven-year bond issue aimed at reducing the impact of the coronavirus outbreak on the country’s finances.

A successful issue would also help cement Greece’s credibility with international financial markets after it was included in the European Central Bank’s €750bn pandemic emergency borrowing programme, even though its debt is still rated several notches below investment grade.

Greek borrowing costs have risen in recent days — the country’s 10-year yield was 1.6 per cent two weeks ago.

“We believe success in issuing a bond at a time that might be considered ‘difficult’ shows uninterrupted market access. And current yields are an attractive entry point for investors,” said Alex Patelis, chief economic adviser to the Greek prime minister.

The new bond would be priced to yield around 2.2 per cent, a market analyst said.

Greece raised €2.5bn in January with a 15-year bond, its most recent issue.

Hitachi to restart railway manufacturing in Italy

Kana Inagaki in Tokyo

Hitachi will resume manufacturing at its rail factories in Italy following a one-month shutdown caused by the coronavirus outbreak.

In a statement on Wednesday, Hitachi Rail said: “Having carried out in-depth assessments, we have put in place multiple safety measures in accordance with the latest government guidance. This allows us to start a phased and gradual return to production activity at our Italian sites from 15th April.”

The Japanese group, which has owned a controlling stake in Ansaldo STS since 2015, was forced to close its factories in Italy which make signalling equipment as the country entered a lockdown to tame the spread of Covid-19.

On Tuesday, the company also resumed manufacturing at its train assembly plant in north-east England, which had been on standby since March.

Hitachi, which makes everything from nuclear power plants to bullet trains, has been forced to delay the release of its earnings until May due to disruptions caused by the outbreak.

But in a recent interview, Alistair Dormer, head of the group’s rail and mobility businesses, said Hitachi’s sprawling set of businesses had helped cushion the blow from the pandemic. Last week, the company also sought to reassure investors that it has a $12.9bn financial buffer.

Spain’s People’s party lambasts prime minister

Daniel Dombey in Madrid

Spain’s opposition attacked the government over its management of the coronavirus crisis, even as Pedro Sánchez, prime minister, hailed the latest figures as an indication that its approach was working.

In a bad tempered parliamentary exchange on Wednesday, the centre-right opposition People’s party said Spain had the largest number of coronavirus deaths per capita in the world and alleged that official statistics concealed the true death toll.

“No-one trusts you any more,” Pablo Casado, PP leader, told Mr Sánchez. “You are only interested in power.”

Like many countries, Spain only includes proven, rather than probable cases, of coronavirus, in the death toll, although international pressure to change methodology may be building following decisions by New York state and Belgium to add presumed coronavirus cases to their own tallies.

Spain’s official figures on Wednesday were in line with recent days: 523 people died in the last 24 hours after contracting coronavirus, taking the accumulated death toll to 18,579. This represented a slight reduction on the previous day’s death toll and was far below the daily peak of 950 deaths at the start of the month.

The number of confirmed coronavirus cases rose 3 per cent from the previous day to 177,633 — a slight uptick on Tuesday’s rate of increase but much below previous rates of growth.

“The [month-long] lockdown is working: previously we had 35 per cent daily growth in infections and today we are at 3 per cent,” said Mr Sánchez. “The Spanish people are going to return to normality very soon, but the new normality is not going to be the same until we have a vaccine. If only it could be accompanied by a new form of politics.”

Mr Sánchez has convened cross-party talks this week on Spain’s future path after the crisis.

Zambia threatens to strip Glencore of copper mining licence

Neil Hume in London

Zambia has escalated its conflict with Glencore, threatening to strip the miner and commodity trader of its license to operate in the southern Africa country.

Glencore said last week it was closing its Mopani copper business in Zambia for three months because of the coronavirus pandemic and low commodity prices.

The announcement drew a furious response from the government led by Edgar Lungu, which slammed the move as unjustified and illegal.

In a letter addressed to Mopani’s chief executive officer Nathan Bullock, Zambia’s Mining Licensing Committee said it planned to revoke the company’s licence in seven days unless it could show why the move should not be cancelled.

Iran reports ‘declining trend’ in coronavirus cases

Najmeh Bozorgmehr in Tehran

Iran says the number of fatalities from the coronavirus outbreak shows a “slow declining trend” while warning that it could reverse if social distancing is relaxed.

Ali Rabiei, a government spokesman, said that the number of deaths in Tehran, the capital city, was falling and that no deaths were reported in the province of Isfahan on Monday.

But deputy health minister, Iraj Harirchi, warned that people started commuting in cities “unnecessarily” this week which could lead to a rise in casualties over the next two weeks.

Iran’s death toll reached 4,777 on Wednesday from 4,683 a day before out of 76,389 individuals who tested positive.

Live Q&A: What is the outlook for the UK housing market?

The traditional “spring selling season” in the UK housing market has turned into a period of extended hibernation as the government’s measures to limit the spread of coronavirus put the market into lockdown.

FT Money deputy editor, James Pickford, will be online between 12 and 1pm and 5pm and 6pm UK time to answer your questions about the UK property market.

We want to hear about your property worries, tips and conundrums. You can post comments and read James’s thoughts here.


Bank of America profits drop as it prepares for sharp jolt in loan losses

Laura Noonan in New York

Bank of America set aside almost $5bn for loan losses in the first quarter, close to five times the amount it set aside a year earlier, battening down the hatches for a recession and halving its quarterly profits.

America’s second biggest bank by assets reported net income of $4bn for the three months ended March, down 45 per cent year-on-year and missing analysts expectations. The biggest driver of the poorer results was higher provisions for loan losses, as seen in Tuesday’s results from JPMorgan Chase and Wells Fargo.

“Despite increasing our loan loss reserves, we earned $4bn this quarter, maintained a significant buffer against our most stringent capital requirement, and ended the quarter with more liquidity than when we began,” BofA chief executive Brian Moynihan said.

Provisions for credit losses jumped from $1bn in the first quarter of 2019 to $4.8bn in the most recent period. They rose the most in BofA’s consumer bank, which set aside almost $2.3bn to deal with losses from America’s soaring numbers of unemployed.

Read more here.

Coronavirus accounts for a third of deaths in Scotland

Mure Dickie in Edinburgh

Coronavirus was mentioned in the death certificate of 608 people in Scotland in the week to April 12, more than double the 282 recorded the previous week and accounting for nearly a third of all deaths registered.

A quarter of all deaths involving Covid-19 occurred in care homes, compared with 62 per cent in hospitals and 13 per cent at home or non-institutional settings, according to new weekly data on Wednesday from the National Records of Scotland.

The NRS death toll is considerably higher than the daily number released by the government which only included deaths of people who had a laboratory-confirmed coronavirus infection. By April 14, such deaths had reached a total of 615, while the NRS total had reached 962 by April 12.

Wednesday’s data also suggested higher deaths than normal even where coronavirus was not mentioned in the death certificate.The total number of deaths registered in Scotland in the week to April 12 reached 1,969 compared with an average for the week of 1,100 over the last five years, an increase only partially explained by the 608 deaths involving Covid-19.

Doctors have expressed concern that some patients may not be seeking treatment for other medical problems.

Emirates to step up virus screening for passengers

Tanya Powley in London

Emirates has stepped up its health screening measures as it looks to become one of the first airlines to conduct rapid coronavirus tests for passengers.

The Gulf carrier is working with Dubai Health Authority to do quick blood tests on passengers, with the results available within 10 minutes. The test was done on Wednesday on passengers flying from Dubai to Tunisia and took place at the check-in area of Dubai International Airport Terminal 3.

The carrier said it is working on plans to scale up testing capabilities in the future and extend it to other flights.

The move comes as airlines and airports around the world are looking at how to improve safety when travel restrictions imposed due to the coronavirus pandemic are lifted.

Emirates said its check-in and boarding procedures have also been adapted with social distancing in mind. Gloves, masks and hand sanitisers have been made mandatory for all employees at the airport. Meanwhile, passengers are required to wear their own masks when at the airport and on board the aircraft.

New Zealand’s premier and cabinet to cut their pay by a fifth

New Zealand’s prime minister and her cabinet will take a 20 per cent pay cut for the next six months to show solidarity with citizens struggling financially due to the coronavirus pandemic.

“We acknowledge New Zealanders who are reliant on wage subsidies, taking pay cuts, and losing their jobs as a result of the Covid-19 global pandemic,” Jacinda Ardern said a few hours ago in her daily briefing.

Today, I can confirm that myself and government ministers and public service chief executives will take a 20 per cent pay cut for the next six months.

Ms Ardern added that the pay cut will not affect her government’s fiscal policies, but is intended to show leadership that her cabinet has taken.

We feel acutely the struggle that many New Zealanders are facing and so too do the people I work with on a daily basis. It is about leadership.

If there were ever a time to close the gap between different people in different positions in New Zealand, it is now.

New Zealand has diagnosed 1,386 cases as of April 14 and nine people have died with Covid-19.


Goldman Sachs lifts loan loss reserves as it braces for pain among clients

Laura Noonan in New York

Goldman Sachs first quarter results were dragged down by big provisions for loan losses to clients at its investment bank, underscoring how the Wall Street firm is not immune to the credit losses that are battering America’s main street lenders.

Goldman, which is in the early days of a historic reshaping under chief executive David Solomon, reported net earnings of $1.21bn for the quarter ended in March, down 46 per cent year on a year, a decline roughly in line with Bank of America, which reported a 45 per cent fall in first quarter net income earlier on Wednesday morning.

The biggest driver of Goldman’s reduced profits was $937m of provisions for loan losses, $622m of which fell in Goldman’s investment banking book. Total loan loss reserves were $224m in the first quarter of 2019.

“Our quarterly profitability was inevitably affected by the economic dislocation,” Mr Solomon said. “As public policy measures to stem the pandemic take root, I am firmly convinced that our firm will emerge well-positioned to help our clients and communities recover.”

Goldman’s large bond, currency and commodity trading unit generated quarterly net revenues of $2.97bn, its highest quarterly performance in five years, reflecting strong client activity in both intermediation and financing.

Read more here.

Guardian furloughs 100 staff and forecasts £20m hit from coronavirus

Mark Di Stefano in London

The Guardian predicts the coronavirus outbreak will cost the publication £20m over the next six months as it becomes the latest UK news outlet to use the government’s retention scheme to put staff on paid leave.

In an internal note on Wednesday, the Guardian said up to 100 non-editorial staff would be furloughed, while management and board members planned to take pay cuts of 20 and 30 per cent respectively over the next six months.

The furloughed staff will mostly come from the advertising department, with the outlet promising to top up their pay while they are on leave.

Despite huge spikes in traffic in recent weeks, The Guardian expects the total decline in revenue from advertising and newspaper sales to cost £20m – the equivalent of 15 per cent of revenue.

“While we are well placed to weather difficulties thanks to the strategy implemented over the last four years, it is clear that we will need to adapt as we always have, in order to serve Guardian readers and meet the challenges and opportunities ahead,” the Guardian said in a statement.

Citi lifts loan loss provisions while market volatility boosts revenues

Robert Armstrong in New York

The return of market volatility drove Citigroup’s first quarter revenue up 12 per cent from the year before, despite the global economic slowdown caused by the Covid-19 pandemic.

However, Citi followed other big banks in significantly increasing provisions for loan losses, preparing for the stress the outbreak will cause borrowers in months to come. Loan loss reserves increased by $4.9bn from the quarter before, pushing net income down by 46 per cent, to $2.5bn, or $1.05 per share. Wall Street analysts had expected $1.68 a share.

Revenue of $20.7bn, beat analysts’ expectations by $1.7bn, as frenetic markets drove both fixed income and equity trading revenue up by 39 per cent. Trading contributed $6bn in total revenue.

Like JPMorgan, Wells Fargo, and Bank of America, Citi also saw significant increases in both deposits and loans, which rose by 15 per cent and 6 per cent, respectively. The bank said corporate clients had drawn down their credit lines by $25bn in the quarter.

While provisions rose sharply, actual credit losses rose by just 8 per cent from the year before, to $2.1bn. The bank said it was “operating from position of strength from capital, liquidity and balance sheet perspective”.

Citigroup shares have fallen by over 40 per cent since fears about the coronavirus fist hit markets in late February. The shares fell 3.5 per cent in pre-market trading Wednesday morning.

Tour de France postponed to the end of August

Samuel Agini in London

The organisers of the Tour de France have rescheduled the men’s cycling race for the end of August, as the sporting world seeks to get back on track after a string of cancellations due to the coronavirus pandemic.

The elite cycling contest will start in Nice on August 29 and end in Paris on September 20, the Tour de France said.

“We all hope that the 2020 Tour de France will help to turn the page on the difficult period that we are currently experiencing,” the Tour said.

The event had been scheduled to run from June 27 to July 19, but French President Emmanuel Macron has extended the ban on public gatherings until the middle of July. The new date for the women’s version of the event, which had been scheduled for July 19, has yet to be confirmed.

Gupta’s Liberty Steel appoints new interim European boss

Michael Pooler in London

Sanjeev Gupta’s Liberty House has recruited the former chairman of British Steel to temporarily lead its European and UK steelmaking operations, as the conglomerate grapples with the impact of coronavirus on heavy industry.

The privately-owned company appointed Roland Junck, who was also once chief executive of ArcelorMittal, alongside a new board of directors that will include two independent non-executive appointees “to operate to international best practice of corporate governance”.

Liberty said the immediate focus would be to “weather the economic storm” brought about by the coronavirus pandemic and ensure its steel business, which employs 30,000 people, is prepared for when the recovery begins.

Manufacturers have been hard hit by the Covid-19 crisis, which has led to the shutdown of car factories and engineering plants.

US retail sales post record 8.7% drop in March

US consumer spending retrenched in March falling by the most on record as non-essential businesses across America shuttered as part of an effort to curb the spread of the coronavirus.

Retail sales fell 8.7 per cent in March, the Commerce Department said on Wednesday. That marked the biggest one-month decline since records began in 1992 and surpassed economists’ expectations for an 8 per cent decline.

So-called control sales, which strip out volatile items like food, energy and building materials, unexpectedly climbed 1.7 per cent, against expectations for a 2 per cent drop.

“Due to recent events surrounding Covid-19, many businesses are operating on a limited capacity or have ceased operations completely,” the Commerce Department said in a release.

Overall retail sales declined as social distancing measures took effect across the US by mid-March. Clothing stores were particularly hard hit with sales tumbling more than 50 per cent. Sales at furniture and home furnishing stores, as well as motor vehicle parts and dealers, fell by more than 25 per cent each.

However, stockpiling by consumers ahead of the lockdowns helped boost sales at food and beverage stores, where sales climbed 25.6 per cent.

New York manufacturing gauge tumbles to record low

A gauge of business activity in the New York state plunged to a record low in April, highlighting the blow from the coronavirus pandemic.

The general business conditions index of the Empire State manufacturing survey fell 57 points to minus 78.2 this month, according to the New York Federal Reserve, worse than economists’ expectations for a reading of minus 35, according to a Reuters survey.

That marked the lowest reading since records began in 2001 and broke below the previous low of minus 34.3 reached in February 2009 during the Great Recession.

The report showed new orders, shipments, employment levels and the average work week all contracted at a record pace.

“Severely depressed demand, supply disruptions and extremely high uncertainty will keep manufacturing on an extremely weak trajectory in the near term,” said Oren Klachkin, economist at Oxford Economics. “We believe the economy will gradually start to return to normal in Q3, we note that the risk of an extended lockdown could make for a very slow and uneven recovery.”

Dollar edges higher as dreary US data spook investors

Eva Szalay in London

The optimistic mood that saw the dollar trading lower on Wednesday morning has been reversed by dreary US data, propelling the haven currency higher in the afternoon.

Emerging markets currencies slumped after worse-than-expected manufacturing data, with the South African rand losing nearly 3 per cent of its value while the Turkish lira slipped 1.3 per cent.

Sterling and the Australian and New Zealand dollar also declined sharply against the dollar, with the pound weakening 1.3 per cent and the Antipodean currencies trading 2.3 per cent lower.

“The market mood has soured in the blink of an eye,” said Mark McCormick, global head of FX strategy at TD Securities.

Futures tied to the S&P 500 fell 2.7 per cent ahead of the opening bell, deepening their declines through the session on rising economic concerns. European stocks slipped following a downbeat session in Asia, leaving the Stoxx 600 index on course to end a five-session winning streak.

England records more than 600 coronavirus daily deaths

England has recorded another 651 Covid-19 patients have died, bringing the total confirmed reported deaths in hospitals in England to 11,656.

NHS England said the patients were aged between 20 and 101-years-old, while 20 had no known underlying health conditions. London, the worst affected region, recorded 153 deaths in the timeframe.

The deaths are registered against the date of death rather than when the deaths were reported, NHS England said. The total by date of death, particularly for most recent days, are likely to be updated in future releases. The figures include confirmed cases reported at 5pm on Tuesday.

US factory output falls by most since 1946

US industrial output fell by the most in more than 70 years, driven by manufacturing as the coronavirus pandemic prompted many factories to suspend operations.

Industrial production, the broadest gauge of industrial output from factories, mines and utilities, fell 5.4 per cent in March from the previous month, the Federal Reserve said on Wednesday.

That marked the biggest monthly decline since January 1946 and was worse than economists’ expectations for a 4 per cent decline, according to a Reuters survey of economists.

Manufacturing output tumbled 6.3 per cent, the biggest such drop since February 1946, with the largest decline registered by motor vehicles and parts makers.

Meanwhile, the indices for utilities and mining fell 3.9 per cent and 2 per cent respectively.

Governments face ‘massive’ rise in public debt, IMF warns

Chris Giles in London

The increase in borrowing by governments around the world as a result of the coronavirus pandemic will be “massive”, the IMF said on Wednesday, forecasting that population lockdowns and economic contractions would push budget deficits to well above peak levels during the financial crisis.

Globally, net public debt will rise from 69.4 per cent of national income last year to 85.3 per cent in 2020, the IMF said, raising concerns about the willingness of the private sector to finance governments with chequered records in servicing their borrowings.

In its first attempt to quantify the scale of the damage caused to public finances by coronavirus, the fund provisionally forecast that global public deficits will climb 6.2 percentage points this year to reach 9.9 per cent of national income, topping levels seen in 2008-09.

Read more here

Americas: here is what you might have missed

US retail sales fell 8.7 per cent in March, the biggest one-month decline since records began in 1992. The slump followed the closure of non-essential businesses, part of national efforts to curb the spread of coronavirus.

The return of market volatility drove Citigroup’s first quarter revenue up 12 per cent from last year, despite the global economic slowdown caused by the pandemic.

Goldman Sachs first quarter results were dragged down by big provisions for loan losses to clients at its investment bank, underscoring how Wall Street is not immune to the credit losses facing lenders.

New Zealand‘s prime minister and her cabinet will take a 20 per cent pay cut for the next six months to show solidarity with citizens struggling financially.

Coronavirus accounted for a third of 608 weekly deaths in Scotland, according to new figures. A quarter of all deaths involving Covid-19 occurred in care homes.

Bank of America set aside almost $5bn for loan losses in the first quarter, close to five times the amount it set aside a year earlier.

Global cases of Covid-19 surpassed 2m on Wednesday, the latest figures from Worldometers show.

European stocks slipped following a downbeat session in Asia, with US stocks set to follow them at open.

US shares slide in early trading

Global stocks fell sharply on Wednesday, as new figures showed US economic activity has plunged and there were signs of trouble in Wall Street earnings.

The S&P 500 and Dow Jones both fell 2.3 per cent at the opening bell in New York, while the tech-weighted Nasdaq was 1.9 per cent lower.

Futures had deepened their declines through the session after data illustrated the scale of the economic slump in the US.

Takeaway food chains to reopen partially in the UK

Alice Hancock in London

Burger King, KFC and Pret A Manger have all announced tentative reopening programmes in the UK as companies begin to look beyond the end of the coronavirus lockdown.

Pret, the coffee and sandwich chain, will reopen 10 sites near to hospitals or doctor’s practices from 8am on Thursday, while Burger King said it would reopen four sites: two in Bristol, one in Coventry and one in Swindon. KFC has steadily opened 11 restaurants over the past week. All are for delivery or takeaway only.

The three are the first major restaurant chains to announce any reopenings since the government declared that all had to shut in late March to stop the spread of the disease.

They are all offering limited menus in order to ensure that social distancing rules can be followed within kitchens and employees are only required to work if they feel comfortable.

Opinion: A better society can emerge from the lockdowns

Amartya Sen, Nobel laureate, Thomas W Lamont University Professor at Harvard

“We will meet again,” Queen Elizabeth said recently, invoking a 1939 song. It was an inspiring thought and exactly what we needed. But what kind of a world can we expect after the pandemic? Will we gain something from the experience of jointly resisting the crisis?

The world was full of serious problems before coronavirus. Inequality was rampant, both between countries and within them. In the US, the world’s richest country, millions of people lacked medical coverage, contributing to unnecessary illness. Ill-calculated austerity had weakened the EU’s ability to provide public support to vulnerable people. Anti-democratic politics was on the rise, from Brazil and Bolivia to Poland and Hungary.

Is it possible that shared experience of the pandemic will help alleviate such pre-existing problems?

Read more here

UK coronavirus fatality count remains stable

Britain’s daily death count has risen by 761 cases, showing the tally of fatalities in hospitals has remained broadly stable from the previous day.

A total of 12,868 deaths from Covid-19 were reported by the Department of Health and Social Care on Wednesday, up from Tuesday’s count of 12,107.

The daily tally of deaths reported on Wednesday fell only slightly from the previous day’s of 778.

As of 5pm on Tuesday, 313,769 people in the UK had been tested for coronavirus, of whom 98,476 were found positive.

Russia announces stimulus as lifeline to businesses and unemployed

Max Seddon in New York

Vladimir Putin announced Russia would introduce new stimulus measures to stem unemployment and support businesses during the coronavirus pandemic.

In a televised cabinet meeting held via video conference on Wednesday, Mr Putin said that small and medium-sized enterprises from hard-hit sectors would receive up to Rbs12,100 ($162) per employee – equivalent to minimum wage – to cover salary payments on the condition that they retain at least 90 per cent of staff.

Other measures included a further Rbs200bn in subsidies for Russia’s regions, government-backed loans for essential businesses at near-zero interest rates, and Rbs23bn to support the airline industry.

“Obviously, we will need [more] solutions for the economy as a whole and for specific sectors. We need to prepare these solutions immediately,” Mr Putin said.

Funding Circle shares rise after it joins US business loan scheme

Nicholas Megaw in London

Shares in Funding Circle, the UK-listed business lender, jumped by a quarter on Wednesday after it was approved to join the US government’s rescue plan for small businesses.

The Paycheck Protection Program offers loans of up to $10m to small businesses, which will be forgiven after two months if the money is used for payroll, mortgage rent or utility payments.

The programme relies on banks and other lenders to disburse the loans, but its rollout suffered from operational difficulties and concerns about whether cash would reach affected businesses quickly enough. New lenders such as Funding Circle have been joining the scheme in recent days in an attempt to help deal with the logjam of applicants.

Funding Circle, which has long argued that it can approve loans more quickly and efficiently than traditional banks, is also applying to join a similar programme in the UK known as the Coronavirus Business Interruption Loan Scheme. Several people close to the programme said they expected several more non-bank lenders to join it later this week.

Shares in Funding Circle were up 25 per cent in mid-afternoon trading, at 69p a share, but were still down more than 20 per cent since the start of the year.

G20 agree to suspend government debt payments for poorest countries

Andrew England and Jonathan Wheatley in London and James Politi in Washington

G20 nations have agreed to offer a moratorium on bilateral government debt repayments for low-income countries until the end of the year, as part of a plan to combat the Covid-19 pandemic and prevent an emerging markets debt crisis.

The grouping also called on private creditors “to participate in the initiative on comparable terms” and requested multilateral development banks, such as the IMF and World Bank, “to further explore the options for the suspension of debt service payments over the suspension period”.

“We support a time-bound suspension of debt service payments for the poorest countries that request forbearance,” the G20 said in a statement after a finance ministers’ meeting on Wednesday.

We agreed on a coordinated approach with a common term sheet providing the key features for this debt service suspension initiative, which is also agreed by the Paris Club.

All bilateral official creditors “will participate in this initiative, consistent with their national laws and internal procedures,” the statement said. “We call on private creditors, working through the Institute of International Finance, to participate in the initiative on comparable terms.”

The debt deal will apply to the 76 countries eligible for assistance through the World Bank’s International Development Association that are “current” on any debt service to the IMF and the bank, as well as least developed countries as defined by the UN.

Singapore reports record daily rise in cases to bring total to almost 3,700

Stefania Palma in Singapore

Singapore reported a record jump in daily confirmed cases, with 447 new patients taking the country’s total to 3,699.

The city state is battling a new wave of locally transmitted infections driven by an outbreak among its migrant worker community.

Foreign workers accounted for 409 new cases, 404 of whom reside in dormitories where individuals often live in crowded quarters.

The number of new migrant worker cases has jumped to a daily average of 260 in the past week from 48 the week prior.

About one-third of Wednesday’s new cases have yet to be linked to known patients.

Global case count breaches 2m, says Johns Hopkins University

Steve Bernard in London

Three in 10 of the 2m cases confirmed from Johns Hopkins University on Wednesday are in the US, where the Covid-19 count has soared in recent weeks with the addition of at least 20,000 diagnosed over a 24-hour period for the past 17 days.

Signs, however, have emerged over the past few days that the number of new cases is starting to plateau. This is true in Italy and Spain, the former hotspots of Europe. Many countries, however, are still in the early acceleration phase.

The global case count has doubled in the past 13 days from the 1m that was recorded on April 2.

UK and EU plan further rounds of post-Brexit transition talks

Jim Brunsden in Brussels

Britain and the EU have announced plans for three negotiating rounds on their future relationship between now and the beginning of June, as they seek to reinvigorate talks that were disrupted by the coronavirus pandemic.

EU chief negotiator Michel Barnier and his UK counterpart David Frost took the decision during a video-call on Wednesday, their first official contact since Mr Barnier announced on March 19 that he had contracted Covid-19.

The coronavirus pandemic has threatened to derail the tight timetable for the future-relationship talks, which began in March. Mr Barnier warned even before the health crisis began that it will be extremely difficult to reach a comprehensive deal before Britain’s post-Brexit transition period expires at the end of this year.

Officials said that Mr Frost and Mr Barnier spoke for almost an hour. They agreed that the upcoming negotiating rounds would take place by videoconference — a format that officials had previously doubted would be viable for such a large negotiation.

The three negotiating rounds are planned for the weeks starting April 20, May 11, and June 1.

Best Buy furloughs 51,000 workers

Alistair Gray

Best Buy is furloughing 51,000 workers after the US electronics retailer’s sales dropped by almost a third.

While the early stages of the coronavirus lockdown boosted Best Buy’s sales as consumers rushed for equipment to allow them to work from home, revenues have since slumped 30 per cent as its stores have been restricted to pick-up only.

Best Buy, which has about 125,000 employees, said on Wednesday it was furloughing nearly all part-time workers from this weekend. Most full-time staff are being kept on.

Corie Barry, chief executive, is taking a 50 per cent cut to her base salary. The company is also suspending staff pension contributions.

Hit to US manufacturing is the biggest since 1946, says Jefferies

US monthly manufacturing production faced its biggest drop since the post-second world war slump, suggesting industry may be facing a similarly slow and volatile recovery, according to an analysis by Jefferies.

The consensus call was for production to fall 4 per cent in March, so the 5.4 per cent decline announced by the Federal Reserve on Wednesday was significantly weaker than expectations. The manufacturing component of production in particular fell 6.3 per cent, the biggest drop since February 1946.

“There isn’t any way to sugar coat the data this month. Simply put, the report is terribly discouraging,” the analysts noted.

The end of the war in 1945 and the end of wartime manufacturing efforts generated some of the worst economic data in modern history in the US, with industrial production falling 12.1 per cent in August 1945.

The Jefferies analysts noted:

After the war, manufacturers retooled their lines to meet the needs of the postwar consumer economy which produced extremely wide swings in industrial production.

A 6.4 per cent decline in production in February 1946 was followed by a 12.6 per cent increase in March, according to records.

“It looks as though 2020 is going to be just as volatile,” the analysts warned.

All options are on the table, says IMF chief

By James Politi in Washington

Kristalina Georgieva, IMF managing director, said no options had been ruled out in the global response to the economic downturn triggered by the coronavirus pandemic, suggesting the allocation of new reserve assets to help emerging markets remained on the table despite US scepticism.

Ms Georgieva said the “world under the pressure of necessity always comes together”, pointing to the experience of the global financial crisis, at the opening of the virtual IMF and World Bank spring meeting.

“What we are concentrating on is to act decisively with what we have and where there is full consensus among our members [but] we recognise that there are other options to be explored and we will continue to do so,” she said.

Ms Georgieva praised a standstill on debt payments for the poorest countries that was separately endorsed by the G20 on Wednesday, and had been pushed heavily by the IMF and the World Bank, saying that gave her “confidence that whatever is necessary we will collectively do in the face of this tremendous crisis”.

The US has so far failed to embrace calls from European and African leaders for the IMF to allocate new “special drawing rights”, a reserve asset created by the IMF based on a pool of currencies, to developing economies to help them maintain liquidity during the crisis. But it has boosted its emerging lending facilities to help countries cope with the pandemic, receiving interest from 102 members, Ms Georgieva said.

Northern Ireland’s lockdown extended until May 5

Arthur Beesley in Dublin

The coronavirus lockdown in Northern Ireland will be extended until May 5 in a move that aligns the duration of restrictions in the UK region with the Irish republic.

“We have decided restrictions will remain in place for another three weeks and we will review that coming up to that time,” said Arlene Foster, first minister in Northern Ireland’s powersharing executive.

The devolved executive at Stormont outside Belfast and the Irish government have pledged to deepen co-operation in the face of the pandemic. The move comes five days after Leo Varadkar, Ireland’s prime minister, prolonged the country’s lockdown until May 5.

Official figures show the virus has so far claimed 140 lives in Northern Ireland hospitals with 2,088 infections. However, new data to be released on Friday will update the number of fatalities to include cases where doctors completing death certificates diagnosed suspected Covid-19 cases but did not carry out a test.

Only essential travel will be permitted as the lockdown continues. Robin Swann, the region’s health minister, urged people to stay at home to curtail Covid-19 from spreading as the authorities try to build up supplies of protective gear for health workers.

UK womenswear group Oasis goes into administration

High street fashion chain Oasis has appointed administrators, joining the list of retailers hit by the coronavirus pandemic.

The womenswear group, which includes the Warehouse fashion chain, has appointed Rob Harding and Richard Hawes, restructuring partners at Deloitte, as administrators, Oasis said in a statement on Wednesday.

“Covid-19 has had a devastating effect on the entire retail industry and not least the Oasis Warehouse group,” said Mr Harding. “Despite management’s best efforts over recent weeks, and significant interest from potential buyers, it has not been possible to save the business in its current form.”

The move follows the recent appointment of administrators at Laura Ashley and department store group Debenhams.

The decision will mean 202 redundancies, while 41 head office roles will be retained to assist the administrators and 1,801 employees will be furloughed across head office, stores and concessions.

Oasis, Warehouse and Idle Man will trade online in the short term, the statement said.

“This is a situation that none of us could have predicted a month ago, and comes as shocking and difficult news for all of us,” chief executive Hash Ladha said.

Italy’s daily death count continues to fall

Davide Ghiglione in Rome

Italy recorded 578 deaths from coronavirus on Wednesday, a lower daily tally than the 602 seen the day before.

The total death toll in one of the countries hardest hit by the Covid-19 outbreak has risen to 21,645, the Civil Protection Agency reported, while confirmed cases increased by 2,667 to 165,155.

While Italy has been under strict social distancing measures since March 9, its measures are set to continue until May 3, despite the rate of new cases slowing.

The lockdown, which has shut non-essential Italian businesses and prevented people from leaving their homes except for emergencies or essential work, was originally due to end on April 13.

The total number of Covid-19 patients in Italy who have recovered increased by 962 to 38,092.

EU Commission backs WHO after Trump cuts funding

Michael Peel in Brussels

The World Health Organisation and the European Commission have both expressed regret at President Donald Trump’s decision to halt US funding to the global health body.

Tedros Adhanom Ghebreyesus, WHO director-general, said on Wednesday that his organisation was now assessing the impact and how to fill any funding gaps.

“This is a time for all of us to be united in our common struggle against a common threat, a dangerous enemy,” he told reporters. “When we are divided, the virus exploits the cracks between us.”

The European Commission said the EU-backed WHO efforts to contain the pandemic had already provided additional funding and was looking into what it and its member states could do in response to the US move.

“This is the time for solidarity, not for finger-pointing or undermining multilateral co-operation,” the commission said. “Politicisation of the current crisis will only prolong it and distracts us from our main task: to save lives and contain this pandemic.”

Ursula von der Leyen, European Commission president, is due to host an online pledging conference on May 4 that will look at immediate funding gaps in combating the pandemic.

Belgium extends lockdown to at least May 3

Jim Brunsden in Brussels

Belgium’s prime minister has said the national lockdown will be extended until at least May 3.

“It is very clear that this crisis is not yet over,” Sophie Wilmès said at a news briefing following a meeting of the National Security Council on Wednesday.
“The number of people in intensive care unfortunately remains high.”

The government agreed last month that the lockdown could continue until May 3 if needed, while giving itself the option to end it on April 19.

Ms Wilmès announced the relaxation of some specific aspects of the lockdown. She said garden centres and DIY shops would be allowed to reopen.

People will be able to visit elderly and disabled relatives, subject to some conditions, she said.

Bank of Canada to start $43bn bond-buying programme

Canada’s central bank will launch a C$60bn (US$43bn) bond-buying programme while holding interest rates at 0.25 per cent as it braces itself for a significant economic hit from Covid-19.

The Bank of Canada, responding to strains in the market for provincial government debt, will buy up to C$50bn in provincial bonds, as well as C$10bn in investment grade corporate bonds. The programme will begin “in the coming weeks”, the bank said.

“The outlook is too uncertain at this point to provide a complete forecast,” the bank said, but its analysis suggests activity will slump 15-30 per cent in the second quarter, compared with the end of 2019.

The central bank will continue to buy at least C$5bn in Canadian federal government securities each week, and has extended its term repo facility for up to 24 months. The bank also said it would temporarily boost the amount of US Treasury bills it buys at auctions to up to 40 per cent.

The bank said it has already deployed C$200bn in asset purchases and lending to financial institutions in response to the pandemic, and cut rates over the past three weeks by 150 basis points to what it calls the “effective lower bound”.

Barrick Gold buys more than 800,000 antibody tests

Neil Hume in London

Barrick Gold has purchased more than 800,000 finger-prick antibody testing kits to screen workers and the communities living close to its mines.

Chief executive Mark Bristow said the company had invested a lot of money in the kits, which can be used to detect if a person’s immune system has Covid-19 or has recovered from it.

“We have had some very good successes,” Mr Bristow said in an interview with the FT. “It’s not a definitive test but it’s good enough for screening.”

“We’ve got 300,000 kits on on their way. We’ve got about 150,000 already and another 400,000 that we have just finalised,” he added. “We buy them from all over the place. South Korea, China. We’ve bought some from the UK.”

Canada-based Barrick is one of the biggest mining companies in the world with assets spread around the globe from Papua New Guinea to Nevada.

Mr Bristow said its operations had suffered minimal disruption because of the virus and production was in line with its full year guidance of 4.8m to 5.2m ounces.

UK to give families ‘right to say goodbye’ to dying relatives

Robert Shrimsley in London

The UK health secretary at the government’s daily briefing announced a “right to say goodbye” to a dying relative infected with Covid-19.

After weeks in which families of coronavirus patients have been unable to see their loved ones in their final hours, Matt Hancock said he was changing the regulations so that where possible and within the bounds of safety, people would be able to visit relatives before they died.

“Wanting to be with someone you love is one of the deepest human instincts,” Mr Hancock said at Wednesday’s briefing.

Reports of the solitary death of Ishmail Mohamed Abdulwahab, in hospital without his parents, “made me weep”, he added.

The hospital death toll may rise in the UK on Thursday after successive days in which the number of daily deaths seem to have stabilised below 800. Chris Whitty, the chief medical officer, said the number, which does lag behind, often rises after a weekend and that it might do so again after the Easter break.

Paris airport operator ADP reports traffic falling by half in March

David Keohane in Paris

French airport operator ADP saw overall traffic plunge by more than a half in March over the same month last year as flights around the world were grounded because of the coronavirus pandemic.

ADP, which has already temporarily shut Orly airport to the south of Paris and reduced capacity at Charles de Gaulle to the north, said traffic into the French capital fell 58.5 per cent in March compared with the same month last year. International flights from outside Europe fell 52.6 per cent, while European flights fell 64.4 per cent and those within France fell 58.3 per cent.

ADP said overall traffic around the world fell 28.2 per cent in March from the same period last year, if the group’s recent 49 per cent acquisition of India’s GMR Airports in February is included in the figures.

Global airport operators are suffering because of the impact of the virus, which has seen flight volumes plummeting by as much as 90 per cent across Europe following the lockdowns. ADP chief executive Augustin de Romanet, who contracted the virus in March, said this month it was costing the company €3m a day in lost sales.

The group, which reports first quarter revenues next week, has seen its shares fall 50 per cent so far this year. It is 50.6 per cent owned by the French state, which has shelved plans to sell its stake because of the violent moves in stock prices.

UK to test new care home residents for coronavirus

Robert Shrimsley in London

A sharp rise in coronavirus deaths in residential care homes has prompted the UK to set out a number of initiatives, such as testing for new residents before they are admitted into the home.

Tests will be available to symptomatic residents, social care staff and household members who showed symptoms, the health secretary said at a daily briefing on Wednesday.

Officials are working to create a supply network for protective equipment, with an online delivery system that will ship kit directly to the homes. However, for the next three weeks priority drops will continue until the regime is in place.

Matt Hancock announced steps to raise the status of care workers and rejected the suggestion that they are regarded as a lesser or cinderella service. This would include the creation of a single brand for social care to symbolise the profession.

Businesses and supermarkets will be asked to show the same support and preferential treatment for care workers displaying the brand badge. A national recruitment campaign will be launched, Mr Hancock said, with the government paying for the initial training.

Tyson Foods extends closure of pork processing plant

Emiko Terazono in London

Tyson Foods, a US meat packer that suspended one of its key pork processing plants in Columbus Junction, Iowa, this month, said it would extend the closure by another week.

The prolonged closure of the plant, which accounts for about 2 per cent of the country’s pork processing capacity, comes after meat processor Smithfield Foods announced an indefinite shutdown of its plant in Sioux Falls, South Dakota, after 238 workers contracted the virus. The Sioux Falls plant accounts for 4-5 per cent of US pork production in normal times and the stoppage has raised supply worries among food industry executives.

Tyson said it was continuing to pay its Columbus Junction staff during the closure and that it had implemented safety measures, including temperature scanning and social distancing, at its other plants.

The closure of the processing plants is a blow to US pig farmers. The National Pork Producers Council, representing pork producing farmers, has warned the industry faces a “dire situation that threatens the livelihoods of thousands of farm families”.

The closures, along with the loss of demand from restaurants as well as falling exports has led to a plunge in the price of pigs, said the NPPC. The council cited estimates from agricultural economists that pig farmers would lose an average $10 a pig, or a total of $5bn for pigs marketed for the rest of the year.

Recovery from pandemic will be big test for Ireland’s next government’

Arthur Beesley in Dublin

Dublin reported 38 further coronavirus deaths, taking the total to 444, as Ireland’s traditional ruling parties said recovering from the pandemic will be the primary challenge facing the country’s next government.

The long process of forming a new coalition after inconclusive February elections moved a step forward on Wednesday as Leo Varadkar’s ruling Fine Gael and the opposition Fianna Fáil published a joint 22-page plan to guide talks with smaller parties.

“The immediate challenge for us is to recover and rebuild in the aftermath of the Covid-19 emergency and the havoc that it has brought to the lives of people and to the social and economic security of families,” they said.

The two parties, historic rivals who have never ruled together, lack a parliamentary majority. They will therefore need a deal with smaller parties or independent MPs to form a stable government. Saying coronavirus has presented “the crisis of a lifetime”, the document called for a government with a “clear majority that is strong enough to develop and deliver a programme of national recovery across its lifetime”.

Health officials in Dublin reported an additional 1,068 Covid-19 cases on Wednesday, bringing the total number of infections in the Irish republic to 12,547.

With infections on the rise in nursing homes for vulnerable elderly people, the government struck a deal on Wednesday to redeploy nurses and healthcare staff to private nursing homes from hospitals.

Cuomo lays out plans to reopen New York economy in next 18 months

Joshua Chaffin in New York

New Yorkers will be required to wear masks when in crowded public areas, Governor Andrew Cuomo announced as he set out plans to begin to reopen the state’s economy over the next 18 months.

Mr Cuomo said New York had succeeded in stabilising its healthcare system and avoiding the worst outcomes forecast by public health experts. Even though about 2,000 people are still being diagnosed each day with coronavirus, the net number of hospitalisations has begun to decline steadily.

In one sign of the state’s improved fortunes, New York will send 100 ventilators to Michigan and 50 to Maryland.

Mr Cuomo set out an 18-month timeline to increase economic activity gradually while awaiting the arrival of a vaccine that would conclusively end the pandemic. Businesses will be evaluated based on how essential their products and services are, and the risks they pose of further spreading the virus.

The resumption of economic activity will be calibrated based on public health risks. A key part of the reopening, the governor argued, was to launch testing and tracing of the public on a mass scale, something that was still beyond the state’s capacity.

“We can’t do it yet. That is the unvarnished truth,” Mr Cuomo said, pointing to shortages of laboratories and supplies.

He appealed to the federal government for help, saying that the race for testing and testing equipment was now akin to what the race for ventilators had been a few weeks ago. He urged the states and the federal government not to repeat that experience, in which parties competed against one another for scarce supplies.

“The answer on testing is not to repeat the mistakes of ventilators, which is 50 states competing against each other to buy testing capacity from private companies. And the federal government … also competing,” Mr Cuomo said.

UK politicians call for better treatment of bank business customers

Matthew Vincent in London

UK politicians have demanded assurances that small businesses will not suffer at the hands of banks during coronavirus disruption as many did during the financial crisis.

At a meeting of the Treasury select committee on Wednesday, MPs asked the heads of banking body UK Finance and City regulator the Financial Conduct Authority how they could prevent lenders – and their staff – putting their own interests ahead of their customers.

Steve Baker, the prominent Tory Brexit supporter, expressed concerns over a repeat of the scandal surrounding Royal Bank of Scotland’s Global Restructuring Group, which was accused of pushing customers into emergency refinancing after the 2008 crisis and profiting from the process.

Fellow committee member Alison Thewliss also raised “the potential for a GRG type situation emerging and concerns that commercial lending remains outside the regulatory perimeter”.

FCA boss Chris Woolard admitted that almost all UK business lending was still unregulated, but said that since the financial crisis its senior managers regime now made bank executives responsible for all lending conduct.

He said the FCA had set up a new small business unit to gather intelligence about the treatment of small businesses by financial services firms during the crisis and ensure the regulator responds to any issues identified.

Coronavirus numbers in French hospitals fall for the first time

David Keohane in Paris

The number of people in hospital in France owing to coronavirus fell for the first time since the start of the epidemic, but the country has now had more than 17,000 people die of the infection.

France had 31,779 people in hospital with the virus, as of Wednesday evening, 513 fewer than the day before.

“This is the first drop,” French health official Jerome Salomon said. “We must salute it while remaining very careful and awaiting further developments.”

For the seventh day in a row the number of people in intensive care beds in France also fell, down by another 273 to 6,457. France had just 5,000 intensive care beds before the crisis but increased that number to 10,000 and has plans to raise it to 14,000.

A total of 17,167 people have now died of the virus in France, including 10,643 in hospitals, an increase of 514 over the past day.

6,524 have now died in other institutions, with the majority in nursing homes, an increase of 924. However, that jump in deaths in nursing homes recorded on Wednesday was, Mr Salomon said, in part owing to delays in reporting the data over the long weekend.

Fed Beige Book shows US activity contracted ‘sharply and abruptly’

Brendan Greeley in Washington

The US economy has contracted “sharply and abruptly” since March, with steep employment drops and flat or declining wages, according to a Federal Reserve report released on Wednesday, in a blunt description of the damage done to growth over the past month.

In the Fed’s Beige Book, a collection of conversations with local contacts, several Fed districts also reported high demand for loans, both from businesses and consumers.

“All districts reported highly uncertain outlooks among business contacts, with most expecting conditions to worsen in the next several months,” according to the report.

Reports from the Fed districts on employment showed “severe” cuts at restaurants, hotels and retail shops. But steep job losses weren’t limited to those sectors and had spread to manufacturing and energy as well. Businesses anticipated more cuts to come over the near term, though many had furloughed or laid off workers temporarily and hoped to bring them back.

One-third of French aircraft carrier’s crew test positive for Covid-19

David Keohane in Paris

One third of the crew on board the Charles de Gaulle aircraft carrier, the flagship of the French fleet, have tested positive for the coronavirus, the French defence ministry said on Wednesday evening.

Last week, the nuclear-powered Charles de Gaulle was recalled early to port in Toulon in the south of France owing to a suspected outbreak of the coronavirus.

Some 668 of the 1760 crew on board the ship have now tested positive for coronavirus and 31 have been hospitalised, with one in intensive care. The French defence ministry said testing was continuing.

The French navy has launched an investigation into how the outbreak has been handled.

The outbreak on the Charles de Gaulle follows controversy surrounding a coronavirus outbreak on board the US aircraft carrier Theordore Roosevelt, in which the commander was fired after he sent a letter to Navy officials pleading for help.

The letter was leaked to the media, causing the US navy’s top official to say he had lost confidence in the captain for not adhering to the chain of command in raising his concerns.

Democrats step up calls for cost transparency from drugmakers

Hannah Kuchler in New York

Progressive Democrats are lobbying for pharmaceutical companies to be stripped of exclusivity and forced to be transparent on the costs for drugs and vaccines to fight Covid-19 in Congress’ next response package.

Representative Jan Schakowsky said Congress must take action against “pandemic profiteering”, saying they had good reason to be sceptical about drugmakers because, before the crisis, many people in the US had died for lack of access to drugs.

The group, which also includes congressmen Doggett and DeFazio and Congresswoman DeLauro, set out three principles for the drugs:
- First, no single company should be granted exclusivity that would hamper access or control who manufactures the drug.
- Second, no drug should be sold at an “unreasonable” price.
- Third, companies should have to detail all the costs that went into the development and production of the drug.

Retailer JCPenney to miss an interest payment to bondholders

Alistair Gray

JCPenney warned it will miss an interest payment to bondholders by the due date as the heavily indebted US department store chain heads for a possible default.

In the latest sign that the coronavirus shutdown is threatening to push already distressed retailers over the edge, JCPenney said in a filing with the Securities and Exchange Commission that it will not pay $12m that had been due on Wednesday.

The New York-listed company has almost 850 department stores across the US and employed about 90,000 people as of February.

Under the terms of the bond the retailer has a 30-day grace period to make the payment before it is deemed to have defaulted. JCPenney said it would “evaluate certain strategic alternatives, none of which have been implemented at this time”.

S Korea’s ruling party set for election landslide after virus response

Edward White in Wellington and Song Jung-a in Seoul

South Korea’s ruling party is heading for a landslide victory in legislative elections, in a resounding endorsement of the government’s handling of the coronavirus crisis.

The polls for the 300-seat National Assembly, held with heightened safety measures in the midst of the global pandemic, were seen as a referendum on the response to the outbreak by the government of Moon Jae-in, the president.

With more than 90 per cent of the votes counted as of 3am in Seoul, Mr Moon’s ruling Democratic party was headed for an outright majority for the first time in 16 years, according to preliminary results reported by Yonhap, the state news agency.

The polls marked a sharp turnround in public sentiment from late last year when Mr Moon’s popularity was dented by slow economic growth and a series of protests and scandals linked to allegations of corruption involving officials.

The Democratic party was on track to increase its share of National Assembly seats to 161, up from 120. Combined with affiliated groups, the leftwing, progressive parties looked set to win 180 seats.

The United Future party, the main opposition, was tracking to hold 86 seats, down from 92, reflecting a failure to properly reform after the 2016 impeachment and later jailing of former president Park Geun-hye, experts said. The estimated turnout was 66.2 per cent. the highest in 28 years.

The election is set to hand Mr Moon and his Democratic party a stronger mandate for the second half of the five-year presidential tenure, potentially clearing some of the legislative bottlenecks that have marred progress since he took office in 2017.

However, with the country now facing an economic crisis, two of Mr Moon’s most important legacy ambitions — reforming the chaebol, the family-owned companies that have long-dominated South Korea’s economy and rapprochement with Kim Jong Un, the North Korean leader — will struggle to be realised, according to political insiders and analysts.

Ortega to deliver televised address after lengthy public absence

Jude Webber in Mexico City

After more than a month’s absence from view, Nicaraguan strongman Daniel Ortega will make a televised address to the nation this afternoon – his first since the start of the coronavirus pandemic.

The broadcast was due to take place at the end of a transmission that began at 2pm local time (3pm ET).

The 74-year-old former revolutionary, who has ruled the Central American country since 2007 and for 24 of the past 41 years, was last seen in public on February 21, although he took part in a video conference with regional leaders on March 12.

US stocks fall on grim economic data

Wall Street declined on Wednesday as investors digested a string of disappointing US economic data and bank earnings.

The S&P 500 retreated from a one-month high to end the day 2.2 per cent lower, with the energy, materials and financials sectors particularly hard hit. However, the benchmark index trimmed losses of as much as 3 per cent earlier in the day.
The Nasdaq Composite fell 1.4 per cent.

Meanwhile, Treasuries rallied with the yield on the US 10-year down 0.12 percentage points to 0.6332 per cent. Yields move inversely to price.

Investors digested a string of ugly data that underscored the extent of the blow to the US economy from the coronavirus pandemic.

Industrial production posted its biggest monthly drop since the end of the second world war, while retail sales dropped by the most since the data started being collected in 1992.

Weak earnings from Bank of America, Citigroup and Goldman Sachs also highlighted the hit from coronavirus lockdowns.

US death toll tops 28,000 after record daily increase

The US has reported its highest number of coronavirus deaths in a single day, frustrating hopes a peak in the outbreak had been reached last week and pushing the total since the pandemic began above 28,000.

Over the past 24 hours, a further 2,492 people died, according to the latest data from the Covid Tracking Project. About 30 per cent of those – or 752 – were in New York, the hardest-hit US state.

Wednesday’s tally was the first time fatalities have risen above 2,000 for two consecutive days, following the 2,299 reported on Tuesday.

Deborah Birx, the head of the White House’s coronavirus task force, said that despite the high fatality figures, the rate of death among Covid-19 patients remains comparatively low.

“Over the last five to six days, we’ve seen declines in cases across the country, and this has been very reassuring for us,” Dr Birx said at the daily White House news conference. “At the same time, we know that mortality and the fatalities that we’re facing across the US continue.”

The new fatalities took the total number of US coronavirus deaths since the first was recorded a month ago to 28,160, about 6,500 more than Italy, the second-most affected country. About 41 per cent of US deaths have been in New York.

On a day when the cumulative number of reported infections worldwide topped 2m for the first time, the tally for the US sat at 632,656.

“We do have nine states that have less than 1,000 cases and less than 30 new cases per day,” Dr Birx said.

Trump to reveal guidelines on Thursday for reopening US economy

Demetri Sevastopulo in Washington

President Donald Trump said the battle against coronavirus continued but stressed that recent data suggested the US was “past the peak,” as he signalled he would reveal new guidelines on reopening the economy on Thursday.

“The data suggests that nationwide we are past the peak … hopefully that will continue and we will continue to make great progress,” Mr Trump said at his daily news conference.

The US president added that the “encouraging developments have put us in a very strong position to finalize guidelines for states on reopening the country”. He said he would hold a press conference on Thursday afternoon to reveal the new guidelines, which he suggested would be targeted at some, but not all, states.

Mr Trump previously suggested he wanted to reopen the economy in May, but some of his advisers, including Anthony Fauci, one of the top scientists on the White House coronavirus task force, have suggested that timetable was not realistic, particularly given the inability to test enough people across the US.

“We think some of the states can actually open up before the deadline of May 1. And I think that that will be a very exciting time indeed,” Mr Trump said in the White House Rose Garden. “Governors are … chomping at the bit to get going.”

“We’ll have some openings that will exceed our expectations and they will be safe. They will be strong, but we want to get our country back. We want to get our country back. And we’re going to do it, and we’re going to do it soon,” he said.

Many governors have made clear, however, that the president does not have the constitutional authority to order them to ease lockdown orders, raising questions about whether Mr Trump can announce anything that is meaningful.

Mr Trump spoke as the US death toll passed 28,000, while the number of coronavirus cases topped 630,000.

A record 2,492 died from coronavirus over the past 24 hours, the first time new fatalities have risen above 2,000 for two consecutive days.

Mr Trump lashed out at Democrats, saying they were preventing him from appointing officials who require Senate confirmation. He said he would consider using his “constitutional authority to adjourn both chambers of Congress”, in a move he said would allow him to appoint nominees under a process knowing as “recess appointments”.

Fitch cuts Mexico’s credit rating on forecast for ‘severe recession’

Jude Webber in Mexico City

Fitch Ratings has cut Mexico’s sovereign debt to BBB-, one notch above junk, as coronavirus triggers a “severe recession” this year while “weak governance and ad hoc government policy interventions” as well as a deteriorating business climate will hamper recovery.

Fitch, which kept the outlook on Mexico’s long-term foreign-currency debt at stable as it downgraded from BBB, called the contingent liability represented by the debt of state oil company, Pemex, a “key factor”. Fitch last year cut Pemex to junk; the company has $105bn in debt, or 9 per cent of GDP.

Mexican President Andrés Manuel López Obrador has refused to line up a stimulus package funded by debt – which Fitch said could “delay the recovery”. It nonetheless saw debt to GDP levels increasing to their highest level since the 1980s and said “returning debt/GDP to a sustainable path will prove challenging.”

The agency forecasts GDP to contract 4 per cent this year but said that could change. It also pencilled in a widening of Mexico’s general government deficit by 2.5 percentage points of GDP to 4.4 per cent of GDP, higher than implied by the most recent budget review.

IMF approves new liquidity line for emerging markets

James Politi in Washington

The IMF board approved a short-term liquidity line to help some emerging economies grapple with the coronavirus outbreak, as the multilateral lender ramps up its efforts to help developing countries limit the fallout from the pandemic.

The move by the IMF came in the midst of the institution’s spring meetings, held virtually, which have been dominated by efforts to coordinate the global response to the crisis.

The IMF has boosted its emergency lending facilities to help struggling members and said it would offer grants for countries to temporarily cover debt payments to the multilateral lender. Together with the World Bank, it also pushed the G20 to offer broader debt relief to the poorest nations in the world.

The short-term liquidity line set up by the Fund on Wednesday night was developed to help countries cope with the depletion of foreign reserves unfolding amid high levels of capital flight from emerging markets. The IMF said the facility would “ further strengthen the global financial safety net as part of the Fund’s COVID-19 response” and would be “ a revolving and renewable backstop for member countries with very strong policies and fundamentals in need of short-term moderate balance of payments support”.

The liquidity support is particularly important because the countries failed to agree on an allocation of IMF special drawing rights – the Fund’s international reserve asset based on a basket of leading currencies – amid opposition from the US. The IMF said the facility would offer countries access worth 145 per cent of their quota at the Fund.

“Complementing other instruments during the current crisis, the facility will fill a critical gap in the Fund’s toolkit and help to facilitate a more efficient allocation of resources,” he said.

US manufacturing body calls for health equipment makers to be spared from Mexican restrictions

Jude Webber in Mexico City

The biggest association of US manufacturers appealed to the Mexican government to exempt manufacturers of medical equipment from a decree that has halted non-essential activity in a bid to halt the spread of coronavirus, saying the shutdown was “potentially weakening our response to the Covid-19 pandemic”.

“At a time when we need to ramp up the production of personal protective equipment, lifesaving equipment and medicines, we cannot afford to have any of these critical supply chains shut down if Mexico does not issue guidance that expands and clarifies the industries that are essential,” National Asscociation of Manufacturers President Jay Timmons said in a letter to Mexican President Andrés Manuel López Obrador.

“Across North America, our health care sectors depend on the many products that we make—from medicines, sanitation supplies and inputs used to produce respirators and masks to the grains used to make bread and critical parts that ensure trucks can deliver groceries,” he said.

He urged Mexico to harmonise its definition of “essential and critical” with guidelines from the US Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency (CISA).

Several companies have already successfully lobbied to be left out of the Mexican industrial shutdown. The government passed a decree earlier this month exempting steel, cement and glass producers with contracts for the government’s priority rail, refinery and airport infrastructure projects, or with the state oil or utilities companies, to be exempted.