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CME Group to close Chicago trading floor in precautionary move
The CME Group will close its Chicago trading floor after Friday's close to reduce large gatherings in an effort to combat the spread of the coronavirus.
The world’s largest futures exchange said no coronavirus cases have been reported on the trading floor or in the Chicago Board of Trade building.
It said it was closing the trading floor "as a precaution to reduce large gatherings that can contribute to the spread of coronavirus in line with the advice of medical professionals".
Those who use the floor will receive additional information on Thursday related to the execution of floor-related products and protocols. Products will continue to trade on Globex, the CME's principal electronic marketplace.
"The reopening of the trading floor will be evaluated as more medical guidance on the coronavirus becomes available," CME said.
The company's headquarters at 20 South Wacker Drive, Chicago, will remain open.
Juventus player Rugani tests positive
Italian football club Juventus said its defender Daniele Rugani had tested positive for coronavirus.
Mr Rugani, 25, was currently asymptomatic, the club said in a statement and added that it is "activating all the isolation procedures required by law, including those who have had contact with him."
The total number of coronavirus cases in Italy has climbed to 12,462 and the death toll has climbed to 827. The Italian government has ordered the closure of all retailers except food shops and pharmacies as it rolls out stringent measures to contain the country’s coronavirus outbreak.
US scales back participation in its biggest military exercise in Europe
Helen Warrell in London
A US army exercise involving the largest deployment of American troops to Europe for 25 years is being scaled back due to the coronavirus outbreak.
The exercise – “Defender 2020” – was intended as a demonstration of the US’ commitment to supporting European allies in the event of an attack. It was due to start in April and involve 20,000 American troops training in Germany, Poland and the Baltic states, testing infrastructure and logistics for the movement of troops and equipment across the continent. US soldiers began arriving in February.
However, the US army’s European command has announced that it is now decreasing the scope of its deployment. "After careful review of the ongoing Defender-Europe 20 exercise activities and in light of the current coronavirus outbreak, we will modify the exercise by reducing the number of US participants," military officials said in a press release.
"Activities associated with the exercise will be adjusted accordingly and we'll work closely with allies and partners to meet our highest priority training objectives,” the statement added.
Earlier today, Norway also confirmed that it was closing down Cold Response, an exercise in arctic warfare involving 15,000 troops from the US, UK, Netherlands, Germany, France, Belgium, Denmark and Sweden. Rune Jakobsen, chief of the Norwegian Joint Headquarters, said he had decided together with local health authorities to begin a “controlled closure of the exercise”.
One Norwegian soldier stationed on a military base in the far north of Norway, close to where the exercise is being held, tested positive for Covid-19 last week.
Mirage guest tests positive for coronavirus
A 40-year old woman from New York who stayed at MGM-owned Mirage in Las Vegas is confirmed to have contracted the coronavirus.
"We were informed that an individual from New York who was a guest at The Mirage and an attendee of the Women of Power Summit from March 5-8 has tested positive for coronavirus," MGM said in a statement. The guest was hospitalised on March 8 and is isolated and in a stable condition.
The individual's room is being deep cleaned and sanitised and access to the room remains restricted. The casino operator also said it is "coordinating with the Southern Nevada Health District to notify guests and employees who may have had close prolonged contact with the individual and are directing our employees to follow all self-quarantine requests".
The Southern Nevada health distrcit also reported two new cases, a male in his 60s and a female in her 70s both of whom are close contacts of previously reported cases. Both individuals are isolated at home.
Meanwhile, two previously reported cases, a male in his 50s and a female in her 70s, both remain in hospital in serious condition.
New Jersey officials monitoring health of party attendees
Health officials in Princeton, New Jersey, are monitoring the health of nine residents who were at a private party attended by as many as five people infected with coronavirus.
The town’s health department said three Pennsylvania residents who attended the party on February 29 “presumptively” tested positive. Two individuals from the Boston area, who tested positive for coronavirus after returning home, also attended the party. The results are considered presumptive until confirmed by the Centers for Disease Control and Prevention, according to officials.
The Boston-area residents had attended a Biogen conference that is tied to other cases of the virus, according to Bloomberg.
Princeton officials said there were 47 people at the party, including 14 people from Princeton. When contacted, nine Princeton residents complained of one or more symptoms and are being evaluated. “All fourteen have been advised to self-quarantine at the present time and the immediate future,” the Princeton health department said in a statement.
Biden campaign cancels two more events, plans 'virtual' rallies
Lauren Fedor in Washington
Joe Biden's presidential campaign has cancelled planned upcoming events in Illinois and Florida ahead of primaries there next week, and said the former vice-president will hold “virtual” rallies instead.
The former vice-president, who currently leads Vermont senator Bernie Sanders in the total delegate count after winning primary contests in four states last night, is expected to make a speech on coronavirus tomorrow. The Biden campaign said earlier today that it was forming a public health advisory committee of medical experts to advise the campaign on future events, amid growing concerns about the spread of Covid-19.
Both Mr Biden and Mr Sanders cancelled planned events in Columbus, Ohio, last night at the advice of public health officials. The Sanders campaign said it would evaluate all future events on a “case by case” basis.
The two men are vying to be the Democratic nominee to take on Donald Trump in November's general election. Mr Trump said last week that he did not intend to cancel any of his own campaign rallies, which regularly attract thousands of supporters. But the president has no major upcoming events listed on his campaign website.
Mr Biden and Mr Sanders -- both in their late 70s -- are set to face off in a head-to-head televised debate on Sunday in Arizona. But the Democratic National Committee said last night that Sunday’s debate will be held without a live audience.
“At the request of both campaigns and out of an abundance of caution, there will be no live audience at the Arizona debate,” said Xochitl Hinojosa, DNC communications director. “Our number one priority has and will continue to be the safety of our staff, campaigns, Arizonans and all those involved in the debate.”
Italy orders closure of all retailers except pharmacies and grocery stores
Miles Johnson in Rome
The Italian government has ordered the closure of all retailers except food shops and pharmacies in a further extension of stringent measures to contain the country’s coronavirus outbreak.
Giuseppe Conte, prime minster, said cafes, restaurants and all other retailers deemed non-essential would be closed during the outbreak, while other businesses including factories and agriculture, as well as the public sector and transport would remain open. He said banks and post offices would also remain open.
“This is a challenge that puts a strain on the national health system but also our economy,” he said. “In the choices that I have up to now made I have taken account of all interests, but I made a deal with my conscience, in first place we It will always be the health of Italians”.
Amazon establishes $25m relief fund for contract workers
Dave Lee in San Francisco
Amazon says it has established a $25m relief fund to support contract workers facing financial distress.
The company said independent delivery drivers and seasonal employees could apply for a grant equal to “up to two weeks of pay”.
However, workers only qualify if diagnosed with the virus or placed into quarantine by the government or Amazon. A common complaint among employment rights groups is that this criteria means low-income workers are still compelled to go to work, even if they are starting to feel unwell.
“This additional pay while away from work is to ensure employees have the time they need to return to good health without the worry of lost pay,” said Beth Galetti, head of human resources. “This is in addition to unlimited unpaid time off for all hourly employees through the end of March, which we shared with employees last week.”
Regular full- and part-time employees will automatically receive two weeks' pay if diagnosed or quarantined. Amazon has so far instructed staff at its offices in Seattle, New York City and the San Francisco Bay Area to work from home.
Denmark closes all schools and universities to fight pandemic
Richard Milne in Oslo
Denmark is closing all schools, universities and kindergartens as well as sending most civil servants home as the Scandinavian country ups its measures against coronavirus.
Mette Frederiksen, the centre-left prime minister, told a late-night press conference the moves would have "huge consequences but the alternative would be far, far worse".
All civil servants who do not deal with urgent matters will be sent home for two weeks while education centres will close for the same period. All private sector employees should work from home if possible, added the prime minister.
"We will not get through this as a country without a cost. Businesses will suffer losses and people will lose their jobs. The government will do what it can to help," Ms Frederiksen added.
More than 500 Danes are now infected with coronavirus with two in critical condition. Gatherings of more than 100 people are banned, meaning most bars and nightclubs will close.
"Everyone who is healthy, we have a great responsibility towards the vulnerable," the prime minister added.
Ms Frederiksen said other tougher measures were possible including banning cruise passengers. But she told Danes that there was adequate food and drink and no reason to hoard.
Madrid expects 'significant rise' in cases this weekend
Daniel Dombey in Madrid
The head of the Madrid region, where the biggest coronavirus outbreak in Spain has occurred, said medical professionals expected a big uptick in cases this weekend and that the spread of the virus will peak over the next three weeks.
Isabel Díaz Ayuso, the head of the regional government, said she would present an action plan for hospitals on Thursday and that her administration had already increased medical staff and laboratories testing for the virus.
"The population should know that health professionals forecast that this weekend we will have a significant rise in the number of infected people,” she added. “They calculate that the worst of the spread of the virus will take place in the next three weeks.”
Madrid accounts for just under half of Spain’s roughly 2,200 cases of coronavirus, and over 30 people in the region have died from the virus. The regional administration has this week shut schools, universities, kindergartens, museums, theatres and galleries to combat its spread.
But, in contrast with the travel controls instituted in Italy, Ms Díaz Ayuso said her administration had no intention of closing off the city.
NCAA ‘March Madness’ tournament to bar most fans
‘March Madness’ will transpire in front of mostly empty stands.
Mark Emmert, president of the National Collegiate Athletic Association, said on Wednesday attendance at upcoming championship events will be limited to essential staff and family, following a recommendation in favour of the move by its coronavirus advisory panel. The list of events affected by the decision includes the Division I men’s and women’s basketball championships.
“While I understand how disappointing this is for all fans of our sports, my decision is based on the current understanding of how Covid-19 is progressing in the United States,” Mr Emmert said in a statement.
This decision is in the best interest of public health, including that of coaches, administrators, fans and, most importantly, our student-athletes. We recognize the opportunity to compete in an NCAA national championship is an experience of a lifetime for the students and their families. Today, we will move forward and conduct championships consistent with the current information and will continue to monitor and make adjustments as needed.
G7 meeting of foreign ministers to be held 'virtually'
Katrina Manson in Washington
The G7 meeting of foreign ministers will now be held “virtually” on March 24-25.
At the start of the week, US secretary of state Mike Pompeo was still expecting to welcome foreign ministers from Canada, France, Germany, Italy, Japan and the UK to Pittsburgh for the two-day meeting.
But now, “out of an abundance of caution” US state department spokesperson Morgan Ortagus said the US had decided to host the meeting “virtually by video teleconference”.
Cases in France rise to 2,281 with 48 deaths
David Keohane in Paris
France has now recorded 2,281 cases of the coronavirus with 48 people having died since the start of the epidemic.
That is a jump of almost 500 cases and 15 deaths from Tuesday, according to figures from the French ministry of health. There are 105 people in intensive care.
The new figures come ahead of a scheduled address on the health crisis by president Emmanuel Macron on Thursday evening.
The French government has so far adopted a gradual approach to closing down public events, large gatherings, nurseries and schools in areas which are particularly hit by the infection. Visits to retirement homes have now also been banned.
Earlier this week the government lowered a threshold to ban gatherings from 5,000 to 1,000 people that were “not indispensable to the continuity of the life of the nation”.
Trump to address nation tonight on coronavirus response
Donald Trump will make a statement later on Wednesday discussing the US federal government’s response to the coronavirus outbreak.
The president confirmed his address to the nation is scheduled for 9pm ET tonight. He will make remarks on the economy and public health.
“If we get rid of the problem quickly, everything solved itself,” Mr Trump told reporters. “We are talking about various forms of stimulus.”
Stocks hit 13-month low as WHO labels Covid-19 a pandemic
US stocks tumbled to their lowest in more than a year, in another volatile day of trading that saw equities drop more than 6 per cent at one point and the Dow Jones Industrial Average fall into a bear market.
The benchmark S&P 500 closed 4.9 per cent lower, erasing the previous session's gain. At its worst, with a drop of 6.1 per cent, the index found itself down more than 20 per cent from its February 19 peak, the typical classification of a bear market, and threatened to end an 11-year bull run.
At the closing bell, the S&P 500 sat 19 per cent from its peak.The Dow Jones Industrial Average shed 5.9 per cent, leaving it just over 20 per cent from its record high a month ago and putting it in a bear market.
The Nasdaq Composite was down 4.7 per cent, and 19 per cent from its peak.
Declines accelerated during the afternoon in the wake of the World Health Organization's decision to characterise the coronavirus as a pandemic.
Government bonds, typically a haven asset in times of market stress, sold off, though. The yield on the benchmark 10-year US Treasury was up 11 basis points to 0.858 per cent.
Canada's S&P/TSX composite index also fell into a bear market, down 20.4 per cent from its February 20 closing high, dragged down by healthcare and material stocks.
Spain to close Prado museum and other attractions
Daniel Dombey in Madrid
Spain is closing the Prado museum and many other of the best known museums of the Madrid region because of the spread of coronavirus, which has infected around 2,200 people in the country, just under half of them in the capital city or nearby.
Other closed musuems include the Reina Sofia, the Thyssen-Bornemisza, and the Royal Palace.
The Madrid area has already closed all schools, universities and kindergartens for at least two weeks. Theatres have already been closed - due to a ban on public gatherings of more than 1,000 people- and the number of tourists to the city has slumped.
Apple closing all stores in Italy until further notice
Patrick McGee in San Francisco
Apple is indefinitely closing all of its stores in Italy as the coronavirus continues to spread.
"Our stores in Italy will be closed until further notice,” the iPhone maker said in a statement.
“We understand customers may need support from Apple during this challenging time and we’ll ensure our online and phone support, as well as online store, remain open for customers. We will closely monitor the situation and look forward to reopening our stores as soon as possible.”
Italy is the second country where Apple has been forced to shutter all of its retail operations. The tech giant announced February 1 that all 42 of its retail stores in China would be closed for at least eight days. Most of the closures lasted well beyond that and today, five weeks later, most but not all stores have been reopened following drastic measures in contain the virus.
In California, where Apple is headquartered, chief executive Tim Cook sent a memo to employees over the weekend urging them to work from home “if your job allows.”
Ireland reports nine new cases of coronavirus
Arthur Beesley in Dublin
Dublin reported the discovery of nine new Covid-19 infections, taking the total in the Irish republic to 43.
Another two infections in Northern Ireland brought the total there to 18, meaning there are now 61 cases on the island of Ireland.
The discoveries on Wednesday came as health officials reported the first coronavirus death in the republic, saying the deceased was a woman in the east of the country with an underlying health condition.
“We continue our efforts to interrupt the transmission of this virus,” said Dr Tony Holohan, chief medical officer.
All healthcare workers have been asked to raise “their index of suspicion” for Covid-19 and health authorities will be “substantially increasing” contact tracing with people connected to patients and surveillance capacity.
UK's LV suspends sales of travel insurance to new customers
Katharine Gemmell in London
LV, one of the UK’s biggest mutual insurers, has temporarily stopped the sale of travel insurance to new customers due to the “exceptional circumstances” of coronavirus.
The insurer has seen the number of policies over the past few weeks double and this “difficult decision” was made after considering “a number of different options”, including excluding cover or significantly increasing prices.
“Whilst LV is a major motor and home insurer, we are a small travel insurance provider and it's important for the long-term benefit of all our customers that our exposure to this market remains at a sustainable level for the overall business,” a spokesperson for the insurer said.
There will be no change for existing customers who already have a policy and the insurer will still be offering renewals to them.
Aviva Travel Insurance has also introduced changes for new customers. It is cutting back on what can be offered and is not currently offering the optional Travel Disruption and Airspace Closure covers.
A statement on its website said: “Our travel policy only covers you for unexpected events. You can't claim if you knew, at the time of buying your policy, that you may be unable to travel or you may need to come home early.”
It continues: “Our travel insurance will not cover you if you need to cancel or abandon your travel plans if The Foreign & Commonwealth Office (FCO) advises you not to travel, for example where the FCO advise against all but essential travel to an area affected by Coronavirus.”
Yesterday, the Financial Times reported that much of the UK’s wedding insurance market, including John Lewis and Debenhams, had suspended all new policies while they assessed the impact of the virus.
Washington DC recommends that large gatherings be postponed or cancelled
Lauren Fedor in Washington
Local officials in Washington, DC, are now recommending that all "mass gatherings" with 1,000 or more people be postponed or cancelled.
Muriel Bowser, the city's Democratic mayor, said on Wednesday that DC Health, the capital's department of health, recommended "non-essential mass gatherings", such as conferences or conventions, be postponed or cancelled.
"We also recommend that any social, cultural or entertainment events where large crowds are anticipated be reconsidered by the organiser," Ms Bowser added, saying the recommendations would remain in place until the end of the month.
The mayor is expected to provide further updates at a press conference Wednesday afternoon.
There are four confirmed cases of coronavirus in Washington DC, according to Johns Hopkins University, although that number is expected to rise. Hundreds of churchgoers in Georgetown were asked to self-quarantine after an Episcopalian rector tested positive for Covid-19. Georgetown University said on Wednesday that classes would move to "virtual learning" from next week. Similar measures were announced earlier in the week at George Washington University and American University.
On Capitol Hill, no changes have been made to the legislative calendar, though lawmakers are expected to return to their districts next week for a previously scheduled recess.
Nancy Pelosi, the Democratic speaker of the House, has reportedly rejected calls for lawmakers to stay home, or vote remotely, telling members of Congress yesterday: “We are the captains of the ship. We are the last to leave."
Dow Jones touches bear market as stocks fall more than 5%
The Dow Jones Industrial Average briefly fell into bear market territory as US stocks fell more than 5 per cent.
The blue-chip gauge was down 5.6 per cent at about 23,626, bringing it just over 20 per cent lower from its February 12 intraday high. A drop of 20 per cent from a peak is the standard definition of a bear market.
The S&P 500 was down 5.1 per cent and the Nasdaq Composite shed 4.9 per cent.
Volatility continued to rise, with Cboe's Vix trading above 54. Markets had been unnerved by the World Health Organization's decision this afternoon to characterise the coronavirus as a pandemic.
Government debt was weaker though, with yields continuing to sit higher for the day. The yield on the benchmark 10-year US Treasury was up 3.2 basis points to 0.782 per cent.
India bans most incoming foreign travellers
Amy Kazmin in in Delhi
India has suspended all existing visas for travellers from anywhere in the world until April 15 as it seeks to prevent the further spread of coronavirus among its vast population.
New Delhi has also urged Indian citizens to "avoid all non-essential travel abroad," and warned that any individual returning from an overseas trip could be subjected to two weeks of quarantine.
New Delhi's move to cancel all business and tourist visas regardless of where the traveller is coming from is amongst the most draconian travel restrictions enforced by any country since the global coronavirus outbreak began.
However, New Delhi said that diplomats, UN passport holders, and those holding employment of officials visas, would still be permitted to enter India, while visas for those already in the country would remain valid.
The Indian government believes that coronavirus is largely an imported problem, stemming from foreign visitors, and Indians returning from abroad, all of whom are seen as potential carriers of the virus into India. So far, India has just about 60 confirmed cases among its 1.3bn people, of whom 16 were Italian tourists.
The Indian government has also suspended the visa-free travel privileges for its so-called Overseas Citizens of India - people who are ethnically Indian, or the children of Indians, who are citizens of other countries..
While India does not permit dual citizenship, the OCI card is supposed to grant certain rights and privileges for the large Indian diaspora, including visa free access to the country. But is said that OCI visa-free travel privileges would also stand suspended until April 15.
However, the government said that foreign nationals with "compelling reason" to visit India could still approach Indian embassies around the world, and apply for fresh visas.
Greece to hire 2,000 additional nurses and paramedics
Kerin Hope in Athens
Greek prime minister Kyriakos Mitsotakis has announced the country's state hospitals will hire 2,000 additional nurses and paramedics to handle coronavirus cases, warning: "Let's not deceive ourselves, the most difficult period still lies ahead."
The number of Covid-19 cases in Greece has risen to 99, with 10 more cases recorded on Wednesday. Two patients are in a critical condition.
Speaking on state television, the premier said intensive care units would be expanded at state hospitals while private clinics would be mobilised to assist: "We're doing whatever is necessary to safeguard public health ... The first new hospital staff will start work next week.".
Greece has already closed schools and universities until March 25 and cancelled scores of parades by schoolchilden held annually to celebrate a national holiday on that date. The education ministry was preparing a distance-learning programme for high school students, Mr Mitsotakis said.
Nigeria plans to ban imports of hand sanitiser
Neil Munshi in Lagos
Nigeria's central bank governor is planning to ban access to foreign exchange for importers of hand sanitiser in an effort to boost local production of a commodity that has disappeared from store shelves since the country became sub-Saharan Africa's first to report a coronavirus case.
“It is naira that we will pay to buy sanitisers, rather than using dollars to import sanitizers from China,” Godwin Emefiele told a conference in the capital Abuja, according to Bloomberg. "And I’m sure, as you all expect, that very soon, sanitiser will get into the list of items that are banned."
Mr Emefiele has banned access to foreign exchange from official channels for dozens of items - from rice to cement to wheelbarrows to toothpicks - as Nigeria seeks to bolster local production and achieve food security. The policy has been criticised by economists and had mixed results in boosting local manufacturing and agriculture.
Washington state and San Francisco ban large events
Matthew Rocco in New York and Hannah Murphy in London
Washington state and San Francisco have announced bans on public gatherings amid an outbreak of the coronavirus on the US west coast.
Washington state will ban public gatherings of more than 250 people in some counties, governor Jay Inslee declared. The ban, which will apply to sports, concerts, religious services and other events, will last until the end of March and is likely to be extended.
San Francisco’s ban will apply to gatherings of at least 1,000 people.
Washington is the first state to prohibit large events in an effort to slow the spread of coronavirus. In Washington, the hardest-hit state in the US, there are around 267 confirmed cases. California had 157 cases as of Tuesday.
Mr Inslee said schools should make contingency plans for possible closures.
The bans will impact high-profile events including the Golden State Warriors’ home games and the start of the baseball season in Seattle, where the Mariners were scheduled to play the Texas Rangers on March 26. The Mariners said in a statement the team is working with the commissioner’s office on “alternative plans”.
Meanwhile, three employees at San Jose airport have tested positive for coronavirus, according to the San Jose mayor's office. The employees worked for the Transportation Security Administration, the statement said. The airport remains open for business.
US stocks extend fall after WHO calls outbreak a pandemic
US stocks dropped to session lows as the World Health Organization declared the coronavirus outbreak a pandemic.
The S&P 500 fell as much as 4.6 per cent in afternoon trading in New York, extending Wall Street’s bout of volatility amid lingering concerns over the virus.
The benchmark index was recently down 4.5 per cent, with real estate and utilities – considered the two most defensive sectors – leading the sell-off. The Dow Jones Industrial Average tumbled 4.8 per cent, and the Nasdaq Composite was down 4.2 per cent.
The yield on the 10-year Treasury note rose 2.1 basis points to 0.773 per cent.
Brent crude gave back some of its Tuesday gains, falling 3.3 per cent to $36.01 per barrel.
Hungary declares national state of emergency
Valerie Hopkins in Budapest
Hungary declared a national state of emergency on Wednesday, banning flight arrivals from Italy, China, South Korea and Iran, closing universities and restricting indoor events to fewer than 100 attendees and outdoor events to fewer than 500.
Minister Gergely Gulyas, who leads premier Viktor Orban’s office, said the measures would be in effect until further notice.
"The decisions taken by the government are, in some respects, unprecedented in the thirty years since the regime change," he said during a press conference.
Hungarian citizens returning from the countries in question will be put into home quarantine or face sanctions. The government will also impose checks on its borders with Slovenia and Austria. Mr Gulyas said the government has decided not to close schools for the time being.
Hungary currently has 13 cases of Coronavirus registered, with no fatalities yet, though one septuagenarian is in critical condition. Almost 70 people are in quarantine.
The nationalist government opposes migration, and has sought to connect the outbreak of coronavirus with migration in view of the fact that the first two people to be known to be infected are university students from Iran. However, both reside in Hungary legally.
Italy's coronavirus case tally tops 12,000
Miles Johnson in Italy
The total number of coronavirus cases in Italy has increased to 12,462, up from 10,149 on Tuesday, Italian authorities said on Wednesday evening.
Out of these 10,590 are currently sick, up by 2,076 from yesterday. The number of total deaths rose to 827, up from 631 on Tuesday, while 1,028 are now in intensive care, and 1,045 have recovered from the virus.
Moody's outlook for Mexico and Pemex darkens
Jude Webber in Mexico City
Moody’s Investors Service warned that its outlook for struggling state oil company Pemex and Mexico is darkening. Pemex already had a downgrade hanging over it before this week’s oil price shock and the recent coronavirus emergency.
Moody’s cut its growth forecast for Mexico to 0.9 per cent for this year, from 1 per cent, as it mulls whether to cut the Pemex’s rating.
“Moody’s is evaluating the impact these conditions can have on Pemex’s credit profile, analysing the company’s liquidity and financing needs under different oil price scenarios,” said analyst Ariane Ortiz-Bollin in a statement.
Moody’s has Pemex on a Baa rating – one notch above junk - with a negative outlook. Investors expect a downgrade in the coming months.
A cut to Pemex’s rating, which could prompt a sovereign downgrade as well, would come after Fitch Ratings last year slashed Pemex to junk. A second junk status would trigger some $10bn or more in forced sales by bondholders at institutions required to hold investment grade paper. Mexico’s investment grade sovereign rating is not seen immediately at risk, even if there are downgrades.
“In the case of the sovereign, the negative outlook of the A3 rating already incorporated the risk that Pemex could require recurrent and substantial aid from the government, given the negative cash flow the company has reported and its capital investment needs. The fall in oil prices and the risk that they could remain low increase this risk,” Ms Ortiz-Bollin added.
She said Moody’s was cutting its growth forecast to 0.9 per cent “with additional downside risks” because of the Covid-19 impact on economic activity in the first half of this year. Mexico has seven confirmed cases so farbut its economy is closely tied to the US.
Even before the oil price falls, economists had been slashing their forecasts for growth this year to around 0.5 per cent, compared with initial expectations of at least 1 per cent. The government is expected to revise its own 2020 growth forecast – still at 2 per cent – next month when it publishes preliminary budget numbers.
Russia to limit new visas to Italian citizens and suspend some flights
Max Seddon in Moscow
Russia is to limit issuing new visas to Italian citizens, suspend some flights to Italy, France, Spain and Germany, and cut down officials' travel under new measures to fight the spread of the coronavirus.
The move came after Russia said on Wednesday it had diagnosed eight new cases among Russians who had visited Italy in the last two weeks – taking the total number of confirmed cases to 28, all but two of whom were diagnosed after returning from Italy.
Moscow city authorities said they had identified all people the infected patients had interacted with in Russia and would place them under medical supervision.
Russia's coronavirus crisis center said it would limit flights to the worst-hit countries to Sheremetyevo airport's terminal F, which already handles the few remaining flights to and from China, South Korea and Iran. Exceptions will be made for flights to Rome, Berlin, Munich, Frankfurt, Madrid, Barcelona and Paris, as well as charter flights evacuating Russian citizens from those countries.
The crisis center also recommended that Russia limit all public events when possible and cancel all foreign trips not ordered by president Vladimir Putin or made "in the interests of the security of the country".
Sweden reports first death linked to coronavirus
Richard Milne in Oslo
Sweden has recorded its first death from coronavirus with authorities unable to say how the elderly person had been contaminated.
Authorities gave few details about the deceased other than to say they were over 70 years old, died in a hospital in Stockholm, and had not been abroad or had contact with somebody who had been abroad.
Sweden now has 486 cases of coronavirus and its centre-left government on Wednesday announced measures to ease the economic effects of the pandemic, including by paying sick people for their first day off, which was previously unpaid.
White House asks Silicon Valley to contain misinformation on virus
Tim Bradshaw in London
The White House, often a critic of Silicon Valley, is now looking to the technology industry for help in tackling the coronavirus outbreak.
Representatives from a dozen tech companies and industry groups including Amazon, Apple, Facebook and Google spoke to US chief technology officer Michael Kratsios and officials from across the US government via teleconference on Wednesday.
Twitter, Microsoft, IBM and Cisco were also among the attendees. They discussed a range of issues, from ways to contain misinformation to the application of artificial intelligence to help medical researchers.
“Cutting edge technology companies and major online platforms will play a critical role in this all-hands-on-deck effort,” said Mr Kratsios, who is planning to release a new database of “coronavirus-related scholarly literature” which it hopes tech companies will be able to analyse using AI.
The White House said that it was also looking for increased co-ordination from tech companies on remote working and education, and on ways for doctors to assess patients using video or other online tools.
Silicon Valley firms were among the earliest in the US to urge their staff to work from home, with Google earlier this week asking all employees in North America to work remotely.
The Bill Gates Foundation and the Chan Zuckerberg Initiative, the non-profit organisations funded by the founders of Microsoft and Facebook, are also developing their own testing efforts.
Coronavirus characterised as a pandemic by WHO
Coronavirus has officially been characterised as a pandemic by the World Health Organization.
"Pandemic is not a word to use lightly or carelessly. It is a word that, if misused, can cause unreasonable fear, or unjustified acceptance that the fight is over, leading to unnecessary suffering and death," Tedros Adhanom Ghebreyesus, said on Wednesday during the organisation's regular teleconference on Covid-19.
The WHO has gone 50 days before issuing the characterisation of the disease, which has resulted in more than 113,000 confirmed cases, and 4,012 deaths, globally. The organisation's first daily situation report was issued on January 21, when the vast majority of cases were confined to mainland China and the province of Hubei, where it was first detected.
Michael Ryan, who directs WHO action on health emergencies, said calling Covid-19 a pandemic was “a characterisation or description rather than a formal declaration. It does not change what we do.”
Lombardy president calls for stricter lockdown measures
Miles Johnson in Rome
The president of Italy’s Lombardy region has urged Italy’s central government to impose even stricter lockdown measures to halt the rapid spread of coronavirus as he reported a surge in the number of infections there today.
“We have asked for everything to be shut down, we cannot go ahead with these increases in contagion, we cannot afford it,” Attilio Fontana, Lombardy regional president, told Italian television.
Mr Fontana said “there have been about 1,300 new infections” today in the region, a number that if confirmed would indicate the continuing rapid spread in Lombardy at a time when its health service is struggling to cope with the rising numbers of patients needing intensive care.
As of Wednesday evening -- not counting the new cases reported by Mr Fontana -- there were 4,427 active cases in Lombardy out of 5,791 cases in total. Of the total cases 468 are dead and 896 recovered. Out of active cases 466 are in intensive care.
Earlier today Giuseppe Conte said no further lockdown measures would be introduced at this time while announcing a stimulus package of up to €25bn to help the Italian economy.
Qatar reports 238 new cases
Simeon Kerr in Dubai
Qatar has reported 238 new coronavirus cases among people quarantined in a compound where three residents had been diagnosed earlier, the state news agency said on Wednesday.
The outbreak brings the tally in the gas-rich Gulf state up from 24 to 262.
The health ministry said those affected had been placed in isolation after their neighbours had been diagnosed and have not interacted with anyone outside the compound since then.
Lebanon gives nationals in virus-affected countries four days to return home
Chloe Cornish in Beirut
Lebanon has told its nationals in a host of countries with coronavirus outbreaks - from Germany to Saudi Arabia - that they have a four day window to return home.
It comes as the prime minister orders a complete stop to flights to and from Italy, China, Iran and South Korea.
Beirut, which is famed across the region for its lively nightlife but is tackling the country's worst economic crisis in decades, has put restrictions on public gatherings, and closed bars and restaurants indefinitely.
Ireland records its first coronavirus death
Arthur Beesley in Dublin
Ireland has recorded its first coronavirus death among the 34 patients being treated for Covid-19 infection.
Health officials on Wednesday said they had been informed of the death after calling for an “unprecedented national effort” to respond to the emergency.
The government has warned that more restrictions may be needed, including the potential widespread closure of schools.
Paul Reid, chief of the health service executive, said Dublin was entering “a new phase” in the effort to confront the disease. “Please do as we urge and our ask will increase as we progress,” he said on Twitter.
Senate Democrats announce measures to help combat coronavirus
Courtney Weaver in Washington
Senate Democrats revealed a series of measures on Wednesday that they said would help Americans suffering from the coronavirus crisis.
Those measures included expanding paid sick leave, increasing small business disaster loans, rental and mortgage assistance and expanding the food stamps programme. However, many of the proposals are likely to face sharp resistance from Senate Republicans who have proposed different solutions to combating the crisis.
Revealing Democrats' proposals, Senate Minority Leader Chuck Schumer cast blame on the Trump administration for not doing enough to combat the crisis early enough, and portrayed the White House's proposed relief measures as corporate bailouts designed to help the president's friends.
"We believe the help should be aimed at people not at corporations ... We don't think [the administration] should just throw money out of an airplane and hope it lands on some of the people who have been affected."
He added: "The president seems to be more worried about the health of the big banks than the health of Americans." Mr Schumer added that the "bailouts" and "tax cuts" that the administration was proposing were "out of touch".
E3 gaming expo cancelled due to virus concerns
Dave Lee in San Francisco
The E3 gaming expo, the largest event in the video games industry calendar, has been cancelled due to coronavirus concerns.
The event, held in Los Angeles, was not due to take place until June, but the Entertainment Software Association, which hosts the event, said it had made the “difficult” decision after consultation with its members.
“We felt this was the best way to proceed during such an unprecedented global situation,” a spokesperson said.
“We are very disappointed that we are unable to hold this event for our fans and supporters. But we know it’s the right decision based on the information we have today."
The cancellation will be a blow to games publishers and developers who use the event as a launching pad for new titles. At this year’s event, Microsoft was expected to showcase its upcoming Xbox Series X console.
“E3 has always been an important moment for Team Xbox,” wrote Phil Spencer, Microsoft’s head of Xbox, on Twitter. “Given this decision, this year we'll celebrate the next generation of gaming with the Xbox community and all who love to play via an Xbox digital event.”
Sony, which produces the rival PlayStation platform, pulled out of the conference in January, for the second year in a row, saying it did not “feel the vision of E3 2020 is the right venue for what we are focused on this year”.
Running since 1995, the 2019 event attracted more than 60,000 attendees.
Barclays reports coronavirus case in London office
Stephen Morris in London
Barclays has become the latest international bank to confirm a case of coronavirus in one of its London offices.
The employee, based at the investment bank's headquarters at 5 North Colonnade on Canary Wharf, has been sent home, but the bank has stopped short of evacuating the entire ninth floor where the person was based.
"The colleague has been in self-quarantine since March 9, following notification of their potential exposure to the virus," a spokeswoman said. "We are undertaking the recommended deep clean and disinfection of their workspace and the surrounding area."
"We have also identified colleagues and clients who had close contact... and are advising those colleagues to self-quarantine," she added. "At this stage, we are operating business as usual; we continue to monitor the situation closely and will take further action as appropriate."
As part of its virus contingency planning, Barclays has been testing a scheme to split its trading floor staff into three groups divided between its headquarters, their homes and a back-up site at Northolt, a suburb of London, the Financial Times has reported.
Most major investment banks in London, New York and in Asian financial centres are pursuing the same strategy to ensure trading is interrupted as little as possible.
Last week HSBC evacuated roughly 100 staff from its Canary Wharf skyscraper after a staff member caught coronavirus.
Companies join with WHO, Wellcome Foundation to coordinate business response
Andrew Edgecliffe-Johnson in New York
More than 200 companies are joining forces with the World Health Organization and the Wellcome Foundation to try to coordinate businesses’ disparate responses to a coronavirus oubreak which is playing havoc with their workforces, supply chains and financial outlooks.
A new global platform, launched by the World Economic Forum on Wednesday, will serve as a “matchmaker” between governments in need of assistance and companies able to offer everything from equipment and capacity on ships to research teams and modelling expertise.
AstraZeneca, KPMG, Nasdaq, Saudi Aramco and Volkswagen are among the companies to have signed on to the initiative so far.
“COVID-19 is causing health emergencies and economic disruptions that no single stakeholder can address,” Klaus Schwab, the WEF’s founder and executive chairman, said.
“The private sector has an essential role to play in combating this public health crisis through their expertise, innovation and resources,” added Tedros Adhanom Ghebreyesus, the WHO’s director-general.
The new COVID Action Platform sprang from a call the WHO convened with chief executives last week. It is planning another such call today.
“This is a global challenge… we have to mobilise every sector of society to dampen out the growth [in cases] and be in a position to recover in the long run,” said Jeremy Jurgens, a WEF managing director in charge of its response to the virus.
“Nobody planned for this,” he added, noting that CEOs were also keen to share best practices as they assess how to balance their responsibilities to employees, communities and governments: “Where does stakeholder capitalism stand in a crisis? We’re going to put this to the test here.”
'Toilet roll' searches may shine light on coronavirus economic effects
Alan Smith, head of visual and data journalism, writes:
Today's UK budget was set against a backdrop of economic forecasts from the OBR which are dominated by the anticipated impact of the UK leaving the EU — but a lack of official data on the impact of Coronavirus to the UK economy means there is a huge degree of uncertainty.
Alternative data sources might provide an early hint of disruption ahead: Google data reveal that public search interest in the term "toilet roll", which has been the subject of widely-reported panic buying in UK supermarkets, is higher than a "no deal" Brexit has been at any point in the past six months.
US stocks drop more than 4 per cent
Declines for US stocks accelerated in late morning trade, topping 4 per cent for the broader market alongside a jump in volatility.
The S&P 500 was down 4.2 per cent, while the Dow Jones Industrial Average shed 4.5 per cent, with drops for energy stocks and financials doing the damage. The tech-heavy Nasdaq Composite was faring relatively better, down 3.6 per cent.
Government debt was trimming its declines from earlier in the session, as an advance in yields stalled. The yield on the benchmark 10-year US Treasury was up 2.4 basis points to 0.776 per cent.Volatility jumped.
The Cboe's Vix rose to about 53, which although lower than levels seen on Monday, remains in elevated territory not seen since the financial crisis.
US health officials weigh calling for empty stadiums at NBA games
Kiran Stacey in Washington reports:
A senior US health official has come close to recommending that NBA basketball games in the US should be played behind closed doors.
Speaking to Congress, Anthony Fauci, the head of the National Institute of Allergy and Infectious Diseases, said:
We would recommend that there not be large crowds. If that means not having any people in the audience when the NBA plays, so be it.
US corporate earnings to tumble in second quarter, warns Credit Suisse
Richard Henderson, US capital markets correspondent, reports:
Credit Suisse has predicted profits US corporate profits will drop 8 per cent in the second quarter and will end the year flat as businesses absorb the impact of the coronavirus and lower oil prices.
The Swiss bank has reduced its estimate for earnings per share for 2020 to $165 for companies in the S&P 500, down from its previous prediction of $175. This marks a drop in anticipated growth from 6.2 per cent to just 0.2 per cent for the year.
Jonathan Golub, an analyst for Credit Suisse, said in a note to clients on Wednesday:
Given the timing of the outbreak in the US, 1Q profits should weaken but remain positive. By contrast, EPS growth should trough in 2Q at -8 per cent, and expand by +10 per cent in 4Q.
Goldman Sachs calls time on 11-year Wall Street bull market
Goldman Sachs has called time on the 11-year bull market on Wall Street, warning that the coronavirus outbreak and oil price crash will send the market tumbling by almost 30 per cent from the record highs set last month before furiously rebounding.
The Wall Street bank said the S&P 500 will fall to 2,450 over the next three months, a 15 per cent drop from Tuesday's closing level and a 28 per cent tumble from the record peak recorded in February. Goldman's forecast suggests the US will enter a bear market, typically defined as a fall of at least 20 per cent from a recent high.
"Both the real economy and the financial economy are exhibiting acute signs of stress," said David Kostin, Goldman's chief US equity strategist. "We believe the S&P 500 bull market will soon end."
He said the "proximate causes include the global spread of the novel coronavirus and the 43 per cent collapse in crude oil prices."
Global financial markets have been shaken in recent weeks as investors attempt to determine the extent to which the Covid-19 outbreak will disrupt the economy. Equities have dropped sharply, corporate debt has taken a heavy blow and gauges of volatility have surged. Investors have sought shelter in havens - sending US bond yields to historic lows.
Mr Kostin said in a note to the bank's clients on Wednesday that earnings per share of the large US companies listed on the S&P 500 index will drop 5 per cent this year. This marks the second downward revision in as many months, as Goldman in February had projected no earnings growth for the S&P 500 this year. Strategists at the bank expect earnings to fall by 15 per cent in the second quarter.
Goldman expects the situation to improve markedly by the end of 2020, with a "fast rebound" in the S&P 500 back to 3,200 -- close to where it started the year. "A new bull market will likely be born later this year," said Mr Kostin.
"By year-end, economic and earnings growth will be accelerating, the fed funds rate will be at the zero lower bound, and the impact of any fiscal stimulus will be flowing through to consumers," Mr Kostin said, pointing to Goldman's expectation that the Federal Reserve will cut rates to historic lows over the next two months.
Colombia clamps down on travel as cases rise to nine
Gideon Long in Bogotá reports:
Colombia confirmed another six cases on Wednesday taking the national total to nine.
It also announced that everyone arriving from China, Italy, Spain and France will be ordered to self-isolate at home for two weeks under threat of fines for non-compliance.
Elsewhere in the Andean region, there have been 15 confirmed cases in Ecuador and 11 in Peru.
So far, no cases have been announced in Venezuela, which is suffering from an acute political and humanitarian crisis and is ill-equipped to cope with a further medical shock.
UK cases rise to 456
The number of cases of the virus in the UK has increased by 83 to 456 people, the Department of Health and Social Care said.
As of 9am on Wednesday, a total of 27,476 people have been tested, with the vast majority confirmed as free of the disease. The total number of deaths in the country remains at six people.
UK, France and Germany on same virus trajectory as Italy
John Burn-Murdoch, senior data-visualisation journalist, reports
FT data analysis shows that many countries grappling with rising coronavirus cases are on a similar trajectory -- and potentially facing the same challenge --
In most western countries case numbers have been increasing by around 33 per cent a day. This is as true of the UK, France and Germany as it is of Italy. The latter is simply further down the path.
In the city-states of Hong Kong and Singapore the rates of increase appear to have been been relatively well contained through the quick introduction of strict control measures.
Japan has also reported a flatter case trajectory than western countries, though views differ over whether this is the result of measures such as school closures or simply due to the low numbers of tests carried out.
Korea has been the worst-affected Asian country outside China, but case numbers had begun to flatten off in early March. On Tuesday, however, a new outbreak emerged in Seoul.
Epidemic to peak in Switzerland mid-May
Sam Jones in Zurich reports:
Swiss authorities said they do not expect the coronavirus epidemic to peak until at least mid-May, as the country confirmed its 645th case of the disease and said it would no longer be able to keep track of all the infections.
Bern announced on Wednesday that it was fully closing nine of its border crossings into northern Italy, the region in Europe worst hit by the epidemic.
Only major crossings, such as that at Chiasso, north of Como, will remain open, and even then only partially: those wishing to cross must have proof of a place of employment they must reach.
The Federal Office of Public Health warned that Switzerland was in the earliest stages of the epidemic. The government said it was no longer possible to count the number of infections accurately and only the most severe cases would be tackled.
The government will in short order rely on a projected number of cases only for its planning, Patrick Mathys, the health authority's head of crisis management, said in a news conference on Wednesday.
Anyone showing symptoms were advised to self-isolate at home and not attend pharmacies or doctor surgeries. Authorities stopped short of closing the school system. Mr Mathys said children were the least affected group, and sending them home to be cared for by grandparents and higher risk segments of the population would be counterproductive.
"The peak of the epidemic in Switzerland could be in mid-May,” he said.
Swiss airlines meanwhile said that alongside its parent organisation Lufthansa it will be cancelling all flights to Italy - 90 each week - and significantly reducing capacity across the rest of its network.
Routes to Shanghai, Beijing and Tel Aviv have been suspended.
Swiss railways said it was also starkly reducing traffic into Italy. Its regular intercity services from Zurich and Geneva to Milan have been diverted.
US stocks fall nearly 3% at the open
US stocks tumbled at the opening bell on Wednesday, even as policymakers in Europe ramped up their response to the growing coronavirus outbreak.
The S&P 500 was down 2.9 per cent shortly after the start of trading on Wall Street, continuing a volatile week of trading that saw blue chips rise 4.9 per cent on Tuesday and tumble 7.6 per cent in the previous session.
Strategists at Goldman Sachs this morning cut their S&P 500 forecast to 2,450 by the middle of the year, which is a drop of about 13 per cent from current trading levels and a drop of 28 per cent from the index's February 19 peak.
"After 11 years, 13 per cent annualised earnings growth and 16 per cent annualised trough-to-peak appreciation, we believe the S&P 500 bull market will soon end," David Kostin and his team wrote in a note.
Goldman expects the impact of the coronavirus to wane in the back half of the year, and they forecast the S&P 500 will be at 3,200 by year end, implying a flat 2020.
The Nasdaq Composite was down 2.6 per cent, while the Dow Jones Industrial Average was off 3 per cent.
The yield on the benchmark 10-year US Treasury was down 5.2 basis points at 0.7 per cent. On Monday it traded below 0.4 per cent for the first time as investors sought safety in debt following the biggest plunge for oil prices since 1991.
Spanish authorities block AS Roma flight from landing
Miles Johnson in Rome reports:
AS Roma’s Europa League match tomorrow evening against Sevilla in Spain has been cancelled after the Spanish authorities blocked the Italian football team’s plane from landing.
OBR revises down growth forecasts
Without the impact of coronavirus, the UK's Office for Budget Responsibility has revised down its growth forecasts. In 2020, growth was projected at 1.1 per cent, down from 1.4 per cent in last year’s forecast.
In 2021, the OBR states growth would be 1.8 per cent, up from 1.6 per cent. In the medium term, growth would be 1.5 per cent in 2022, down from 1.6 per cent, and in 2023, 1.3 per cent down from 1.6 per cent.
The chancellor, Rishi Sunak, said still he has the financial flexibility for the package of measures announced at the Budget.
"The House will also note that the target year for our current budget fiscal rule is not until 2022-23," he said. "So even within our current framework, I have the flexibility to act as required over the next two years."
Spain says it may take up to four months to bring outbreak under control
Daniel Dombey in Madrid reports:
It is likely to take between one and a half months to as many as four months before Spain can be sure that the spread of coronavirus is under control, the doctor coordinating the country’s efforts said on Wednesday.
Fernando Simón was speaking as the number of Spanish cases rose to 2,100, up from 1,673 the previous evening.
Around half the cases are in the Madrid region, where 31 people have died after contracting the virus -- out of a national total of 49 mortalities -- and which accounts for more than 80 per cent of the 126 people in intensive care with coronavirus.
Regional authorities have closed schools, universities and theatres, banned events of more than 1,000 people and encouraged remote working.
Dr Simón said such measures were already reducing the number of people on public transport -- diminishing the risk of contagion -- but that it would take nine to ten days to see the impact on the disease’s spread, because of the lag in terms of the appearance of symptoms and testing results. Madrid authorities also advised older or ill people against using public transport.
The restrictive measures are initially intended to last for two weeks. But Dr Simón said in the best possible scenario the authorities would have to wait for two incubation periods of the disease -- typically about five days apiece -- after a last case of infection before they could be sure that transmission was under control.
In practical terms, he said, that meant that Spain was unlikely to be certain that the disease’s spread was under control before one and half to two months in the best case scenario, and possibly three to four months.
Lufthansa cancels another 23,000 flights
Joe Miller in Frankfurt reports:
Lufthansa has cancelled a further 23,000 flights between the end of March and April 24, and warned that many more could be axed in the coming weeks, due to the “exceptional circumstances caused by the spread of the coronavirus”.
The cancellations, which amount to roughly a quarter of the average number of flights operated by the group during those weeks, will mainly affect routes in Europe, Asia and the Middle East, the airline said.
Lufthansa Group -- which includes the Eurowings, Swiss and Austrian brands as well as the German flag carrier -- had already cancelled more than 7,000 European flights in March and suspended all its routes to Israel, mainland China and Iran.
However the carrier said that despite the new cuts, “care will be taken to ensure that all destinations on all continents can be reached with a Lufthansa airline via the hubs of Frankfurt, Munich, Zurich, Vienna and Brussels.”
Last week, Lufthansa warned it may have to cancel up to half of its flights if coronavirus disruption worsened, and said it was considering grounding its fleet of 14 Airbus A380s, in response to the slump in demand.
The company has also implemented an immediate hiring freeze and offered employees voluntary unpaid leave.
Sterling slips as UK chancellor speaks
Eva Szalay, Currencies Correspondent, reports:
The pound gave back earlier gains against the dollar during UK Chancellor Rishi Sunak's Budget speech, he said the government expects a significant hit from the coronavirus and laid out a series of measures aimed at helping the British economy.
The pound was trading at $1.2916 against the dollar, down from the day's high of $1.2976 it hit during BoE governor Mark Carney's speech following the unscheduled 50bps rate cut at the start of the day.
Wall Street stocks poised to drop with futures down 3%
US stock-index futures were down sharply with less than 20 minutes before the opening bell, pointing to yet another tumultuous session on Wall Street.
S&P 500 futures were down 3 per cent in recent action, near the low of the day. The fall comes after the US equities barometer jumped almost 5 per cent during a volatile trading day on Tuesday as it rebounded from the biggest fall since the financial crisis.
Analysts warned that further tumult was probably on the horizon given the uncertain nature of the global coronavirus outbreak and effects of the oil price crash.
Chancellor abolishes business rates for some for this year
The chancellor said he will abolish business rates for this year for eligible retail and leisure businesses, which could be the hardest hit from the spread of the coronavirus.
Rishi Sunak said shops, museums, restaurants and music venues, with a rateable value of less than £51,000 "will pay no business rates whatsoever".
"That is a tax cut worth over £1bn, saving each business up to £25,000," he said.
Mr Sunak said he will take "the exceptional step, for this coming year, of abolishing their business rates altogether".
Head of retail and consumer at Pinsent Masons, Tom Leman, welcomes the abolition of rates for small to medium sized retailers and restaurants.
On the basis the corona virus is not a long term issue for these businesses it is crucial that they have the liquidity to see them through the worst. This will definitely help the cause and hopefully see many of them come out the other side ready to benefit from the increased spending power prompted by the money people are currently saving on their discretionary spend.
US weighs extension of April 15 tax filing deadline
Demetri Sevastopulo reports:
The US Treasury is considering pushing back the April 15 tax filing deadline to help companies and individuals deal with the economic stress from coronavirus.
A senior US official said the move was one of several measures that Treasury was considering as the Trump administration crafts a stimulus package to deal with the economic impact of the outbreak.
Postponing the deadline would help reduce any imminent cash flow and liquidity problems facing ordinary Americans and companies. The official cautioned, however, that no final decision had been made.
Ukraine closes schools and bans crowds
Roman Olearchyk in Kyiv reports:
The government of Ukraine, which so far has only one confirmed case of the coronavirus, announced that it would close schools for three weeks and impose a ban on crowds exceeding 200 people as part of nationwide measures to prevent an epidemic.
The decision comes hours after Poland imposed a nationwide quarantine and follows a decision by Ukraine’s capital city Kyiv to close schools and entertainment centres.
Measures which the government said aimed to address the coronavirus “threat" also prohibit through June 1 the export of medical products needed to combat a potential epidemic and calls for the purchase of infrared screening equipment.
The decision comes amid concern expressed by some experts that the infection rate in the country is higher but under reported due to a low level of tests conducted by authorities and shortage of testing kids. People familiar with the matter have told the Financial Times that Ukraine faces a shortage of testing kits and is currently in discussions with suppliers to obtain more.
UK plans £30bn virus response
Rishi Sunak said the UK’s emergency measures to deal with the coronavirus represents “one of the most comprehensive economic responses of any government anywhere in the world to date.”
All in, he said the measures represent a £30bn fiscal stimulus “to support British people, British jobs and British businesses.”
Despite the spending rush, he said the Budget package would remain within the government's fiscal rules.
That £30bn breaks down to:
• £7bn to support the self-employed, businesses and vulnerable people
• £5bn response fund to support the NHS
• £18bn in fiscal loosening to support the economy this year
This Budget responds at scale to the immediate threat of coronavirus.
Chancellor outlines three-pronged strategy
The chancellor said the government's fiscal response would be "“temporary, timely and targeted” and would be divided into three parts:
Mr Sunak said the National Health Service would get any extra resources it needs to cover the costs of items ranging from vaccine research to recruiting extra staff.
"Whatever extra resources our NHS needs to cope with coronavirus it will get," he said, adding this would be the case "whether its millions of pounds of billions of pounds" that are required.
2. Social Security
The chancellor said a range of measures worth up to £1bn would be implemented to support people's financial security.
Statutory sick pay will be made available for anyone asked to self isolate, even if they don't show symptoms, he said. People will also be able to get sick notes by calling 111, without going to the doctor and will not have to attend job centres in person if they are self isolating.
The chancellor also outlined plans for a removal of the floor on universal credit, said those on contributory Employment and Support Allowance would be able to claim from day 1 instead of day 8, and said the government would introduce a £500m hardship fund which would be distributed to local authorities.
3. Business Support
Mr Sunak said that a 20 per cent of the workforce could be unable to work at any one time, the cost of which will hit SMEs hard.
He said the government would, as a result, refund in full the cost of statutory sick pay for up to 14 days for businesses with less than 150 employees. He also said time to pay services would be scaled up allowing businesses and the self employed to defer tax payments.
The chancellor also outlined plans for a new Coronavirus Business Interruption Loan Scheme that would allow banks to offer loans of up to £1.2m to support SMEs. Small businesses would also be able to access a £3,000 cash grant, paid by local authorities, worth £2bn.
Finally, Mr Sunak vowed to abolish business rates for this year for thousand of small businesses, including in the retail, leisure and hospitality sectors.
UK chancellor expects 'significant' economic shock
UK chancellor Rishi Sunak began his Budget by outlining the “significant” economic disruption the government expects from the virus outbreak.
He said up to a fifth of the working age population could need to be off work at any one time, and business supply chains are being disrupted around the world.
“For a period, our productive capacity will shrink,” he said.
He also said he expects a reduction in demand from a fall in consumer spending.
"I know how worried people are," he said.
We are doing everything we can to keep this country and our people healthy and financially secure.
Norway calls off Nato-involved military exercise in north
Norway has called off a military exercise, which includes troops from its Nato allies and partners, due to fears over the spread of the coronavirus.
Cold Response, a Norwegian-led exercise that was due to finish on March 18, involves more than 15,000 soldiers joining their local counterparts from the US, UK, Netherlands, Germany, France, Belgium, Denmark and Sweden.
The Norwegian Joint Headquarters and the armed forces took the decision in cooperation with the local health authorities. Local critics have said the exercise, which began on March 2 and takes place in the north of Norway, should not have gone ahead in the first place. Norway has 429 Covid-19 cases with one recovered.
"The coronavirus is now out of control in the Norwegian society and that is a new situation to us," Rune Jakobsen, chief of the Norwegian Joint Headquarters, said on Wednesday. "Because of this, we have decided to start a controlled closure of the exercise."
Troops were training in an area that stretches from the town of Narvik to Finnmark district in northern Norway, with the main part in the district of Troms. Norwegian Joint Headquarters has led the exercise every two years since 2006, except for 2018.
Sunak to deliver UK Budget
Rishi Sunak is about to outline the UK government’s economic response to the coronavirus outbreak, in his first Budget as chancellor.
In office for less than a month, Mr Sunak is expected to announce short-term spending pledges to help the health service, businesses and individuals cope with the virus outbreak. He will also pour money into long-term investments in a break from the past decade of austerity.
Earlier, the Bank of England announced a half percentage point cut to interest rates and laid out steps to incentivise banks to lend more, in a package of measures designed to work in tandem with the government’s fiscal response.
Asked whether the economic fallout from the coronavirus outbreak could prove as damaging as the 2008 global financial crisis, BoE governor Mark Carney said: “There is no reason for this shock to turn into the equivalent of 2008 . . . if we handle it well.”
Up to 70 per cent of Germans at risk, Merkel says
Guy Chazan, Berlin bureau chief, reports:
Angela Merkel said that, without natural immunity, treatment options and a vaccine, some 60-70 per cent of the German population would become infected with coronavirus and stressed that the priority should be to slow down the spread of the disease to reduce the strain on the health system.
But the German chancellor rejected the idea of closing borders to halt the infection, describing it as an "inappropriate response" to the challenge posed by Covid-19.
"We should not be trying to isolate ourselves," Ms Merkel said. She was speaking shortly after Austria said it would bar people arriving from Italy, the European country worst affected by the outbreak.
Ms Merkel said the European Stability and Growth Pact had "enough flexibility for extraordinary situations".
Her comments come at a time when EU leaders are looking to see whether the bloc's fiscal rules can be loosened to help it fight the economic impact of coronavirus.
Putin says Russia ready to handle market turbulence
Max Seddon in Moscow reports:
Russian president Vladimir Putin says Russia is well equipped to ride out the market turbulence from the coronavirus and recent oil price shocks.
Speaking to a group of the country's top venture investors in his residence outside Moscow, Mr Putin said that "Russia will go through this turbulent period in a calm and dignified manner," according to state newswire Tass.
"Processes like this can cause some problems, but there could also be some additional possibilities" from the market crisis, Mr Putin said.
There is every chance that Russia's key production sectors will come out of this situation much stronger and better prepared for very serious competition in the future.
Russia's central bank and finance ministry said earlier this week they would sell foreign currency and spend from a $150bn budgetary war chest to cover for lost oil and gas revenue as long as crude stays below Moscow's break-even price of $42 per barrel.
Iran issues warning to citizens if they insist on travelling
Najmeh Bozorgmehr in Tehran reports:
Iran’s president Hassan Rouhani warned people that their lives could turn into “a critical unbearable situation” if they did not help his government contain the spread of coronavirus by refraining from travel.
Mr Rouhani, who has been under pressure by people and politicians to take control of the battle against Covid-19, said on Wednesday in the cabinet meeting that all sectors in his government were involved while some were in charge of daily lives of people.
Iran’s health ministry has been leading the campaign against the disease while armed forces including the Revolutionary Guards have joined in. But critics say the extent of the virus impact means the president had to be in charge himself to coordinate various sectors.
Suggestions such as quarantining cities could create more problems, Mr Rouhani said, but travel bans would be more forcefully carried out and travellers would be stopped if found suspicious of having symptoms.
The respiratory illness has claimed 354 lives in Iran, up from 291 on Tuesday, with 9,000 cases.
Unconfirmed reports suggest Iran’s first vice president Es’haq Jahangiri, is infected, local media says.
He was absent in the cabinet meeting on Wednesday when all ministers and deputy presidents wore masks. Industries minister Reza Rahmani is quarantined at home after testing positive and being hospitalised for days. About a dozen politicians and influential clerics have died of the virus.
Budget to leave UK economy well set to handle virus, says chancellor
George Parker, political editor, reports:
Rishi Sunak, UK chancellor, has told cabinet colleagues that his Budget will help make Britain "one of the best placed economies in the world" to handle the outbreak of coronavirus.
Mr Sunak's Budget will complement measures announced by the Bank of England on Wednesday morning and will aim to build a "bridge" for companies, individuals and public services struggling with the impact of the virus.
His comments to cabinet came as Boris Johnson, prime minister, and Matt Hancock, health secretary, provided an update on the outbreak. Mr Johnson wished Nadine Dorries, health minister, a "speedy recovery" after she contracted the virus.
Speaking ahead of his Budget statement at 12.30pm, Mr Sunak said his first financial statement would "ensure businesses, the public and those in public services working on the front line against the virus get the support they need".
The Budget is expected to include financial help for companies struggling with cashflow problems, individuals facing financial loss because of the need to self-isolate, and public services including the NHS.
Mr Sunak told colleagues that despite coronavirus being “front and centre in our minds”, the Budget would implement manifesto promises and put in place long-term investment plans to bolster Britain's economic potential.
Poland to close schools, universities, cinemas and other cultural centres
James Shotter in Warsaw writes:
Poland will close its schools, universities and cultural institutions from next week as part of its effort to thwart the spread of coronavirus.
The measures, which come a day after Poland banned mass events, will remain in place for two weeks, the prime minister said on Wednesday. Schools, which from tomorrow will not be used for education, will remain open on Thursday and Friday to help those parents who may struggle to organise care quickly enough, Mateusz Morawiecki said.
Cinemas, museums, theatres and operas will also shut their doors.
Health minister Lukasz Szumowski urged people to take the measures seriously.
I have a big and urgent appeal to everyone who will not go to school during these two weeks. This is not holiday time, this is not free time. This mistake was made in Italy. The young people who didn't go to school went to clubs. This is a time of social quarantine.
Poland has recorded 25 Covid-19 cases, a figure officials have said is likely to rise rapidly.
The country has taken other measures to combat the disease, including introducing health checks on its borders with Germany and the Czech Republic. The government said on Tuesday the moves will expand to eastern borders.
Ukraine’s capital imposes quarantine measures
Roman Olearchyk in Kyiv:
Ukraine so far has only one confirmed case of the coronavirus, but the country’s capital city will on Thursday impose a quarantine as a precautionary measure.
“Friends! No panic!” Kyiv’s mayor Vitaliy Klitschko said as he announced the temporary closure of schools, movie theatres, entertainment areas at shopping malls and conferences.
“If you feel unwell, call your doctor right away … And look out for the elderly - they are most vulnerable to the coronavirus,” Mr Klitschko, a former heavyweight boxing champion, added.
Noting that Kyiv had no confirmed cases of the virus, Mr Klitschko said the measures which also ban large street gatherings were necessary to reduce risks “given how global the world is today and with the dynamics with which the coronavirus epidemic is spreading.”
On Tuesday, Mr Klitschko announced that the city had received 1,200 express test kits for diagnosing the virus and expects future deliveries to bring the stockpile up to 5,000 by the end of this week. People familiar with the matter have told the Financial Times that Ukraine faces a shortage of testing kits and is currently in discussions with suppliers to obtain more.
Italy increases virus spending package to €25bn
Miles Johnson in Rome reports:
Italy has ramped up the size its spending package to tackle the economic fallout from the coronavirus outbreak to as much €25bn, up from €7.5bn earmarked last week, as the country seeks to lessen the blow of a nationwide lockdown.
Prime Minister Giuseppe Conte said the government has received authorisation from the Italian parliament to spend €25bn to fund its emergency economic response, and the country could take on an additional €20bn of debt to do so.
Mr Conte also said that no new restrictions on public movement and gatherings would be imposed for now, but that they could be extended after a request to do so from the northern region of Lombardy, the hardest-hit area of Italy.
HSBC warns investors may be unable to attend AGM
David Crow in London reports:
HSBC has warned that investors could be prevented from attending its annual meeting if the UK government decides to ban large gatherings.
Europe's largest bank said it was still planning to hold the meeting on April 24 at the Queen Elizabeth Hall, a 916-seat concert venue in London's Southbank centre.
However, it called on shareholders to cast their proxy votes as soon as possible, "even if they intend to attend the meeting in person" because "shareholders may be restricted from travelling or there may be restrictions on how the meeting itself may be held or conducted".
The bank said in a stock market announcement:
In view of the evolving coronavirus situation and public health concerns, the board is monitoring closely how matters develop over the coming weeks. Some governments of countries where coronavirus has become widespread have taken action to prohibit the gathering of large groups of people or otherwise advised against large congregations of people in an attempt to minimise or delay the spread.
UK economy stagnates in January even before virus impact takes hold
Bethan Staton in London reports:
The UK economy stagnated at the beginning of 2020, disappointing hopes of a post-election bounce as aspirations for recovery were overshadowed by the prospect of a coronavirus pandemic.
Gross domestic product showed no growth in January compared with the previous month, according to data released by the Office for National Statistics on Wednesday, and remained flat for the three months to January.
The lack of growth follows a subdued year for the economy, which stagnated in the final quarter of last year as political uncertainty weighed on business activity, particularly in manufacturing.
It was despite a small uptick in GDP in December, when the UK economy expanded 0.3 per cent after a decisive general election result boosted business confidence ahead of the UK’s departure from the EU.
Economists had been expecting 0.2 per cent growth in the month of January, following signs from business and consumer surveys that the bounce could be sustained.
PwC chief economist John Hawkworth called the flat output "somewhat disappointing".
Confidence has been further dented by the coronavirus outbreak, which the OECD has said could halve global growth. In January, however, the outbreak was only in its early stages so the current figures will not reflect the impact of the virus on GDP.
Rob Kent-Smith, ONS head of GDP, said the economy “continued to show no growth overall” in the most recent two months.
Growth in construction, driven by housebuilding, offset yet another decline in manufacturing, particularly the drinks, cars and machinery industries.
The dominant services sector also showed no growth in the latest three months with falls in retail and telecoms balanced by strength in rentals, employment and education.
The subdued figures come after the Bank of England introduced a package of measures including an interest rate cut, and hours before Chancellor Rishi Sunak announces a Budget expected to be overshadowed by attempts to mitigate the effect of coronavirus.
Labour shadow minister told to self-isolate after meeting Nadine Dorries
Laura Hughes in London reports:
Rachel Maskell, Labour’s shadow employment minister, revealed on Wednesday that she has also been told to self-isolate after meeting with Nadine Dorries last Thursday.
Ms Dorries, a junior health minister in the UK government, revealed last night she had been diagnosed with coronavirus and instructed to self-isolate.
Ms Maskel tweeted this morning:
NHS111 have advised that I self-isolate as a result of a meeting I had with the Government's Mental Health Minister last Thursday who has subsequently tested positive for coronovirus.
“Thankfully I am asymptomatic. It is so important that we all follow all public health advice,” she added.
Sterling rises on Carney pledge to combat virus impact
Eva Szalay, currencies correspondent, writes:
The pound advanced after outgoing Bank of England governor Mark Carney said the central bank has more measures available to stimulate the economy.
Mr Carney, at a news conference on Wednesday, promised to do whatever is needed to combat the economic impact of the virus.
The pound bounced 0.4 per cent higher against the dollar to trade at $1.2959. Against the euro, sterling inched up 0.2 per cent to trade at €1.1469.
The emergency rate cut came hours ahead of the UK's spring Budget, in which the chancellor is expected to unveil measures to boost economic activity.
"We think this is a strong signal of a coordinated response between the bank and the government with more fiscal measures to assist households and businesses hit by the virus disruptions likely to be announced by the chancellor this afternoon," said Anna Titareva, a European economist at UBS.
Top German economists press Merkel to drop budget commitment
Guy Chazan, Berlin bureau chief, reports:
A group of prominent German economists have called on Angela Merkel's government to abandon its commitment to a balanced budget in the face of the coronavirus epidemic and consider an extensive package of measures to help companies affected.
The economists said the government should consider wide-ranging tax holidays and bring forward by six months the planned abolition of the "solidarity surcharge" for 90 per cent of taxpayers. The surcharge on income, capital gains and corporate tax was first introduced in 1991 to help pay for German reunification.
The economists warned that Germany faced a recession in the first half year of 2020, largely as a result of trade fairs, travel plans and large events being cancelled and of production stoppages in industry.
The measures go further than the more modest measures announced by the government on Sunday to help the economy as it grapples with a virus that has thrown supply chains into disarray.
The centrepiece of the package was a push to expand access to Kurzarbeit, a government-subsidised scheme used to great effect during the 2008-9 financial crisis that enables companies to reduce staff working hours during an economic slowdown without having to lay them off.
The government announced it would help companies in a liquidity crunch with export credit guarantees and loans from KfW, the country's state investment bank.
The experts welcomed these measures but said Berlin might have to go much further, stepping in to save firms threatened with insolvency.
"If we don't succeed in containing the spread of the economic shockwaves and we start seeing a big wave of insolvencies, the state should consider as a last resort taking equity in companies," they said, citing the example of the bank bailouts after the 2008-9 financial crisis.
The economists noted that the German state had the necessary fiscal scope to implement the measures they proposed. The country's debt-to-gross domestic product ratio has dropped below 60 per cent - much lower than most of its EU neighbours - and Germany's total budget surplus stood at €50bn last year.
The economists include Peter Bofinger, a former economic adviser to Ms Merkel's government: Gabriel Felbermayr, head of the Kiel Institute for the World Economy, Clemens Fuest, head of the ifo economic think tank, and Michael Hüther, director of the German Economic Institute.
France's BioMérieux to launch tests as part of effort to ease bottleneck
Clive Cookson, science editor, reports:
BioMérieux has joined the commercial race to produce diagnostic tests for the Covid-19 infection, which would help to address a testing bottleneck in public laboratories.
The French diagnostics company said on Wednesday it would launch three different tests.
The first, called SARS-COV-2 R-GENE, will be produced available at the end of March. It is similar to the standard PCR tests already used to test respiratory samples for the virus. Results are delivered in four to five hours, bioMérieux said, and a large number of patient samples may be processed simultaneously. Regulators are expected to give it rapid approval.
In parallel, bioMérieux is developing two automated tests with the support of the US Department of Defense.
One will specifically detect SARS-CoV-2, the virus responsible for the current epidemics, and the other will also diagnose 21 other common respiratory pathogens, delivering results in approximately 45 minutes. They will be submitted for regulatory approval in the second and third quarters of 2020.
“In the face of the urgency of the Covid-19 epidemic, bioMérieux is committed to provide a comprehensive diagnostic approach that meets the highest performance and quality standards to help physicians mount an effective response to the outbreak,” said Mark Miller, chief medical officer.
BoE: More stimulus available if needed
A Bank of England press conference outlining measures to support the economy through the coronavirus outbreak has been running for nearly one hour.
Delphine Strauss has more details:
“This is a big package,” Mark Carney, the outgoing governor, told reporters. He argued that while the focus was often on interest rates, the decision to let banks draw on the countercyclical buffer would allow them to lend an additional £200bn in corporate credit, “exactly the kind of drawdowns that would be required in this kind of situation.”
In addition, he said, the BoE had given the financial sector certainty over its funding, and “on top of it there are fiscal measures that are coming”.
Andrew Bailey, who is about to take over from Mr Carney at the BoE’s helm, said the measures announced had probably used up just over half the stimulus available to the central bank, adding: “That means more is available”.
Asked whether the economic fallout from the coronavirus outbreak could prove as damaging as the 2008 global financial crisis, Mr Carney said: “There is no reason for this shock to turn into the equivalent of 2008… if we handle it well.”
Muted response from bond markets to BoE rate cut
Tommy Stubbington in London reports:
The Bank of England's interest rate cut was met with a muted reaction in bond markets.
Two-year gilts have rallied slightly, while longer-dated bonds are weaker, pushing the 10-year yield up a touch to 0.28 per cent. Cuts had already been partly priced in by markets, and investors are not betting on further rate reductions from here.
“While the suddenness of the move is a surprise, the size of the rate cut itself isn’t, considering that markets had already fully priced UK base rates moving to 0.25 per cent in the next few months," said Mike Riddell, head of UK fixed income at Allianz Global Investors.
The BoE has told us that 0.1 per cent is as low as rates could go, so there’s only one more that they can do.
However, what the moves today mean is that if the economic downturn worsens in coming months, as we expect, then we will probably see quantitative easing in the UK again far sooner than markets had previously anticipated.
Investors may be reluctant to pile into gilts as they expect the BoE move to be accompanied by a big increase in borrowing later on Wednesday.
Mr Riddell said:
It’s surely no coincidence that the timing of the large emergency rate cut is the day of the Budget, which will be fiscally expansionary as has been well telegraphed.
ECB's Lagarde calls for more urgent co-ordinated EU action
Martin Arnold in Frankfurt reports:
Christine Lagarde, president of the European Central Bank, has called for more urgent action by EU leaders to avoid the spread of coronavirus causing a serious economic collapse in the region reminiscent of the 2008 financial crisis.
Speaking on a video call with EU leaders on Tuesday night, Ms Lagarde’s warning was designed to shake them out of their complacent attitude to the threat of the epidemic causing economic havoc across Europe, according to a person briefed on her comments.
The call for action came as the ECB was preparing for the announcement on Thursday of its monetary policy response to the impact of coronavirus, as Italy imposed a quarantine on its entire population and forecasters warned the crisis could drive the bloc into a recession.
Financial markets are betting that the ECB will announce a further cut in its deposit rate to minus 0.6 per cent - following similar cuts by the US Federal Reserve and the Bank of England - as well as increased bond purchases and cheap loans to banks.
Ms Lagarde told EU leaders that without coordinated action Europe “will see a scenario that will remind many of us of the 2008 great financial crisis”, one person involved in the call told Bloomberg. The ECB declined to comment on Ms Lagarde’s contribution to the call.
The ECB president said that a further loosening of monetary policy would only be fully effective if combined with a sufficient fiscal stimulus from EU leaders, according to one person briefed on the call. In that scenario, she said the shock of coronavirus would be shortlived.
After the call, the European Commission vowed to help member states ramp up their response to the coronavirus outbreak by permitting aid for struggling businesses and deploying flexibility in its budget rules to allow a surge in public spending.
Ursula von der Leyen, the commission president, announced the creation of an investment fund worth up to €25bn to fight the crisis drawn from existing EU resources, as she declared “we will use all the tools at our disposal to make sure the European economy weathers this storm”.
However leaders did not unite behind a coordinated EU-wide fiscal stimulus package — despite calls from France and other states for a “massive” response.
Sterling hits session highs as Carney and Bailey hold press conference
The pound has rallied to the highs of the day as Mark Carney and Andrew Bailey promised the Bank of England was ready to take further action to bolster the UK economy.
Sterling was recently up nearly 0.5%, reaching a high of $1.2972. It has risen by more than one cent from the lows of Wednesday as investors assess the unscheduled BoE and brace for the Budget later on Wednesday.
Carney says 'powerful measures' will bolster government virus response
Chris Giles, economics editor, reports:
Mark Carney, Bank of England governor until the end of the week, said the "timely and powerful" measures were announced on Budget day to reinforce the measures chancellor Rishi Sunak would take later on Wednesday to have "maximum impact".
He vowed the central bank would "take all necessary further steps to support the UK economy and financial system." Mr Carney said that while some will recall comparisons to the 2008-09 financial crisis, “then the financial system was the core of the problem. Now it can be part of the solution”.
Andrew Bailey, the central bank governor from next week, was present at all the bank's meetings and engaged in a joint news conference with Mr Carney.
Mr Carney said the measures were designed to "keep firms in business and people in jobs" over a period Mr Bailey said would be "temporary" disruption. The incoming governor said that banks had sufficient funds and buffers to be able to lend through the crisis.
He said the BoE was seeing "anecdotal evidence where we have seen a sharp fall in trading conditions particularly in retail".
Mr Bailey said that "banks should not increase dividends or other distributions such as bonuses" as a result of looser rules on bank capital buffers.
Global case numbers push towards 120,000
Coronavirus infections rose overnight with more than 119,000 global cases and more than 4,000 deaths.
Italy, which is in lockdown, has more than 10,000 cases.
Steve Bernard, senior visual journalist, has mapped the numbers in Europe and globally.
Cathay Pacific seeks to preserve cash, chairman says
Primrose Riordan and Nicolle Liu:
The chairman of Cathay Pacific called the coronavirus outbreak an "unprecedented" time of "great anxiety" and added that the airline is focusing on preserving cash.
The airline is working with business partners to "demand more relief", Patrick Healy said on Wednesday. About 80 per cent of Cathay's staff has taken up three weeks of unpaid leave.
Mr Healy said reports that the company was seeking a new chief financial officer was “speculation” but said the company cannot rule out any further staff cuts.
Cathay Pacific has suffered a "severe" drop in the number of passengers in early March, the airline's customer and commercial officer Ronald Lam said.
"The average booking per day has dropped to around 15,000-16,000 compared to our normal passenger boardings of around 90,000 per day," Mr Lam said.
On some days I think the drop of bookings is more severe, it can be down to 11,000-12,000.
The airline, which was expecting new planes from Airbus for its Hong Kong Express business, said they are in discussions about delaying aircraft deliveries.
Mr Healy said their forecasts "assumed" a recovery in the second half of the year but there was “no way of knowing” with certainty that would come about.
Relief measures offered by Hong Kong airport authorities were not sufficient, the airline said, and did not “reflect the scale of challenge” the local aviation industry was facing.
Sterling recovers from fall in immediate wake of BoE decision
Eva Szalay reports:
Sterling has recovered the losses it had notched up in the immediate wake of the rate cut from the Bank of England and it was trading slightly up on the day.
The pound was up 0.22 per cent at $1.2934 as Mark Carney and Andrew Bailey, the outgoing and incoming BoE heads respectively, held a press conference. It had dropped as low as $1.2843 following the announcement of the rate cut.
Analysts expect the UK Chancellor to announce a package to boost the economy at 12:30, which has helped sterling recover its poise after the unscheduled move from the BoE.
Carney: BoE acted in concert with government
Mark Carney said the Bank of England acted in co-ordination with the government as it cut interest rates and announced plans to keep credit flowing through the economy to help support the UK economy through the virus outbreak.
“Maximising the effectiveness of our response requires working in concert with the Treasury, and that’s why we are acting on Budget day,” the outgoing governor of the Bank of England said in a London press conference.
Mr Carney said Rishi Sunak, the chancellor, will use the Budget to announce “a series of government initiatives” to support UK households and businesses.
Fiat Chrysler warns Italian car plants face possible closure
Peter Campbell, Motor Industry Correspondent, reports:
Fiat Chrysler warned it may shut some of its Italian car factories as it implements a set of extraordinary measures to try and prevent the spread of coronavirus in its home market.
The group will cut production levels so it can move factory staff further apart from one another, while all areas of the plants including rest areas and bathrooms will receive “intensive sanitisation”.
“As a result of taking these actions the company will, where necessary, make temporary closures of its plants across Italy,” the carmaker said on Wednesday.
“To enable greater spacing of employees at their workstations, daily production rates will be lowered to accommodate the adapted manufacturing processes.”
Last month the company started asking office staff to work from home, while also telling those in work to keep their distance from each other, as well as “controlling employee numbers at company cafeterias”.
Italy has been the worst affected Western nation, with around 10,000 reported cases and over 600 deaths.
The hardest hit northern part of the country includes several of FCA’s plants, as well as Ferrari’s Maranello facility. On Monday the supercar brand said it was working to keep the facility operational.
Short-term UK debt rallies after BoE cut
UK sovereign debt with shorter maturities climbed in price after the Bank of England announced its decision to cut rates, while Gilts at the longer end of the spectrum came under modest pressure.
The benchmark two-year yield, a tenor that is considered to be sensitive to fluctuations in monetary policy, was recently down 4.5 basis points (0.045 percentage points) at 0.10 per cent. The decline in yield points to an increase in the price of the debt.
On the longer end of the curve, the 10-year Gilt yield rose 3.2 bps to 0.274 per cent. Debt set to mature further in the future is typically considered to be more sensitive to medium-term expectations for the economy, with lower yields pointing to more modest inflation and growth, and the opposite for higher yields.
Sovereign debt has rallied sharply in particularly volatile action over the past few weeks as investors have dashed into the shelter of perceived havens, like Gilts, US Treasuries and German Bunds amid deepening concerns over the coronavirus outbreak and the crash in oil prices.
Quick stats on BoE rate cut
The Bank of England on Wednesday followed the US Federal Reserve by cutting its main interest rate by half a percentage point.
Here are some quick statistics about today's cut:
-It is the biggest since March 2009, which marked the end of a series of sharp rate reductions prompted by the global financial crisis.
-It brings the main rate to 0.25 per cent, the lowest level since August 2016. Rates were cut that month by a quarter of a percentage point to a record low in the wake of the Brexit referendum that took place in June of that year. They had then been raised first to 0.5 per cent in 2017, and then to 0.75 per cent the following year.
-Cuts of this scale are not all that uncommon in the BoE's long history. In late 2008, at the depths of the financial crisis, the BoE cut rates by 1.5 percentage points and 1 percentage point in the course of two months.
Euromoney calls off dozens of events up to July
Patricia Nilsson in London:
Euromoney has postponed or cancelled 80 events due to the coronavirus outbreak, estimating it will take a £6m hit on revenues this year.
The publisher, which in 2019 made £124m -- roughly a third of revenues -- from events, said affected trade shows included Capacity Middle East, Bauxite and Alumina Miami and the WAN Summit New York. It estimated that operating profit would be hit by £5m in 2020.
"In common with other events operators, Euromoney has experienced disruption across much of the world as a result of Covid-19 and the restrictions that organisations and governments have placed on travel or attending large gatherings," the company said.
Euromoney said no changes had been made to events scheduled to be held after July.
As well as its eponymous monthly magazine, Euromoney runs financial conferences and a range of specialist titles such as Global Capital and International Financial Law Review. Its data services cover markets including paper and metals.
DMGT, the parent company behind the Daily Mail newspaper, last year announced plans to hand over its entire £900m holding in Euromoney to some shareholders at a discount.
Adidas March sales show some recovery in China
Olaf Storbeck in Frankfurt writes:
Adidas's sales in China started to recover in March as the world's second-largest sportswear maker re-opens stores and warehouses after the outbreak of coronavirus brought activities close to a standstill in late January and February.
The German group, which published full-year results on Wednesday, expects first-quarter revenue in China to fall by up to €1bn euros to between €400m and €600m euros. China has become one of Adidas' fastest growing markets and in 2019 accounted for around 25 per cent of overall sales.
In the first quarter, Adidas expects that its operating profit in China will decline by up to €500m as it cancelled all shipments to Chinese wholesalers in February and expects to take back many unsold shoes and apparel from retailers.
While activities in China have started to improve in March, the Herzogenaurach-based group warned that sales in Japan and South Korea have started to slow.
“The further recovery in Greater China, the extent of spillover into other countries as well as the availability of raw materials remain largely uncertain,” the company said, adding that was too early to estimate the outbreak's overall fallout in 2020.
Adidas said that most of the factories in China have re-opened.
Former Osborne aide welcomes joined-up approach
Rupert Harrison, a portfolio manager at BlackRock and former chief of staff to ex-chancellor George Osborne, welcomed the Bank of England's decision to announce its rate cut on the same day as the UK Budget.
European markets open higher
Stock markets across Europe opened higher in the wake of decisive action from the Bank of England, which has cut its main interest rate by half a percentage point.
London's FTSE 100 rose 1.7 per cent at the open, and the Stoxx 600 index tracking the continent's largest companies rose 1.3 per cent.
Shares on Wall Street ripped higher on Tuesday as investors banked on a significant policy response to contain the worst impact of the virus outbreak, although futures trade pointed to opening losses when the S&P 500 begins trading later in the day in New York.
Saudi Arabia to boost maximum production capacity
Anjli Raval reports from London:
Saudi Arabia sought to put fresh pressure on the oil price by instructing the state oil company Saudi Aramco to increase its maximum production capacity to 13m barrels a day.
Saudi Aramco oversees 12m of the kingdom’s 12.5m total production capacity - the amount Opec’s largest producer is able to pump each day.
The statement to the Tadawul stock exchange comes a day after the kingdom said it would supply the market with 12.3m b/d escalating a price war.
Saudi Arabia on Saturday slashed its export prices after Russia said it would not agree to deepen and prolong joint supply curbs with Opec, believing the cuts only subsidised the US shale industry.
The failure to agree on a production deal in response to the demand sapping coronavirus outbreak has led to the effective collapse of an oil alliance that has been in place for the last three years.
Russia in response said on Tuesday it too could increase its production, with the new announcement from Saudi Arabia marking the latest salvo in a tit-for-tat battle.
Germany blocks medical shipments into Switzerland
Sam Jones in Zurich reports:
Germany has blocked the import of several shipments of urgent medical supplies into Switzerland, causing significant consternation in Bern, which imports almost its basic preventative medical supplies, such as face masks and gloves.
Swiss media reported on Wednesday that the issue has become the subject of a developing diplomatic row: on Monday, Switzerland’s governing cabinet, the Federal Council, raised the issue with Berlin. Guy Parmelin, the minister for the economy, did so with his counterpart in Berlin Peter Altmaier. Germany’s ambassador to Bern was formally summoned for a complaint on Friday.
Swiss newspaper NZZ reported on Sunday that a truckload of 240,000 hygiene masks had been impounded by German customs authorities at the border.
Germany has enforced a ban on the export of medical supplies including masks, body suits and safety glasses since March 4.
On Wednesday, Switzerland’s Tages Anzeiger newspaper reported on another case in which supplies bought by the Swiss government from a third country had been impounded by Germany authorities in Hamburg, as they tried to transit through the port on their way to Switzerland.
Switzerland’s department of economic affairs told the newspaper it was aware of “several” cases of shipments blocked by Germany and was working urgently to get them into the country.
The wealthy alpine state is one of the worst hit in Europe by the outbreak: 485 cases were confirmed as of Tuesday afternoon.
A 'highly unusual move' from the BoE
The Bank of England's emergency interest rate cut was a "highly unusual" move without parallel even during the financial crisis, said David Owen, chief European financial economist at investment bank Jefferies.
The Budget today should contain a relatively large and targeted fiscal response. Immediately after the financial crisis, the fiscal easing was equivalent to just over 2 per cent of GDP - hoping to see something similar today.
Karen Ward, chief European market strategist at JPMorgan Asset Management, said the key questions is whether rate cuts will work.
We wouldn’t dismiss entirely the role monetary policy can play. Rate cuts and new asset purchase schemes could provide some support to asset prices, as investors are forced to search for yield, and encourage governments to spend given they can finance larger deficits at cheap interest rates. Liquidity provisions might also help the banks and prevent a tightening in financial conditions.
The former economic adviser to Philip Hammond, ex-chancellor, added she thought “targeted fiscal measures would prove more effective” and said “all eyes are now on the Chancellor to see if he announces a big increase in spending in his Budget today”.
BoE moves to support UK economy through virus outbreak
The Bank of England announced extra measures to help credit flow through the UK economy as it detailed an unscheduled cut to interest rates.
• The Monetary Policy Committee outlined a new funding scheme to incentivise banks to lend to businesses and households. It said this would support lending to businesses “that typically bear the brunt of contractions in the supply of credit” during periods of risk aversion.
• The bank has also lowered capital requirements for banks, by slashing the size of the “countercyclical buffer” or rainy-day fund, to 0 per cent of risk-weighted assets. It said this should support up to £190bn of bank lending to businesses.
The bank’s actions come just hours before Rishi Sunak outlines the government’s economic response to the virus in the annual Budget statement. The chancellor is preparing to unleash a sharp rise in public borrowing and to increase short-term spending to help support the NHS, businesses and households through the outbreak.
Sterling slips and FTSE 100 futures push higher after BoE rate cut
The pound edged lower on Wednesday while FTSE 100 futures advanced after the Bank of England announced its biggest rate cut since 2009.
Sterling was recently down 0.1 per cent at $1.2892, having trimmed earlier losses of as much as 0.5 per cent. FTSE 100 futures were up 0.5 per cent, having pushed higher in the moments following Wednesday's decision.
The BoE on Wednesday reduced its main borrowing rate by half a percentage point to 0.25 per cent as it responded to the "economic shock" sparked by the coronavirus outbreak.
English Premier League match postponed on coronavirus fears
Murad Ahmed reports from London
A match between Arsenal and Manchester City due to be played at the Etihad Stadium in Manchester on Wednesday has become the first English Premier League match to be postponed due to concerns about coronovirus, with players forced into self-isolation after being in contact with a man who had contracted the virus.
In the early hours of Wednesday, the Premier League announced the match had been suspended as a “precautionary measure” as an unspecified number of Arsenal players met Evangelos Marinakis, the owner of Greece’s Olympiakos, during a recent European match between the teams. Mr Marianakis announced earlier this week that he has tested posted for Covid-19.
The Premier League said in a statement: “Thirteen days ago, Olympiakos played at the Emirates Stadium in the Europa League and Mr Marinakis, the Greek club’s owner, met with several Arsenal squad members and staff.
“Following medical advice, Arsenal FC and Manchester City FC consider it is necessary to postpone their fixture due to be played this evening to give time to fully assess the situation. The Premier League has therefore agreed that tonight’s game will be rearranged.”
Arsenal said a number of players and officials who came into contact with Mr Mariankis are in self-isolation at their homes for the recommended period of 14 days.
The match between Arsenal and Manchester City is the first sign of disruption to football fixtures in England. Sporting fixtures in the UK, such as the Cheltenham horse racing festival this week, are ongoing following official advice that there is “no reason” to stop the events to combat the spread of Coronavirus.
Across Europe and Asia, other countries have required tougher measures. All sporting fixtures have been postponed in Italy, while many other European matches includes tonight’s Champions League tie between Paris Saint-Germain and Borussia Dortmund, are due to be played without fans present. This Saturday’s Six Nations rugby match between France and Ireland has also been postponed.
Bank of England cuts interest rates
The Bank of England has announced an unexpected cut to interest rates in response to the "economic shock" of the coronavirus.
The Monetary Policy Committee unanimously agreed at a special meeting to reduce the main bank rate by half a percentage point to 0.25 per cent, its lowest level since the 2016 Brexit vote.
The central bank follows the US Federal Reserve in taking unscheduled action to combat the expected economic disruption from the virus. The bank said it has seen a "marked deterioration" in risk appetite and in the outlook for UK growth, and said indicators of financial market uncertainty have reached "extreme levels".
The reduction in Bank Rate will help to support business and consumer confidence at a difficult time, to bolster the cash flows of businesses and households, and to reduce the cost, and to improve the availability, of finance.
The bank said that while the "magnitude of the economic shock" is still highly uncertain, "activity is likely to weaken materially in the United Kingdom over the coming months".
Temporary, but significant, disruptions to supply chains and weaker activity could challenge cash flows and increase demand for short-term credit from households and for working capital from companies. Such issues are likely to be most acute for smaller businesses. This economic shock will affect both demand and supply in the economy.
Europe: what you might have missed
Thailand’s cabinet has approved $12.7bn of stimulus measures to protect its economy, which relies heavily on tourism and exports, in the face of the coronavirus outbreak.
Crude oil rose even as haven assets rallied on Wednesday, with US Treasuries and the Japanese yen gaining ground as investors remained on high alert in choppy markets.
Work is beginning to resume in Hubei, the Chinese province at the heart of the coronavirus outbreak, its government announced on Wednesday.
Australia’s economy will go into recession by June, according to S&P.
Cathay Pacific, which has grounded planes and placed staff on leave due to low traveler demand, has said it has started re-purposing passenger aircraft to carry freight to mainland China.
Province at centre of China outbreak begins gradual return to work
Christian Shepherd reports from Beijing
The central Chinese province of Hubei, where the coronavirus now spreading across the globe was first discovered, has begun a staggered return to work, its government announced on Wednesday.
Businesses in the provincial capital of Wuhan, ground zero of the outbreak, can only return to work if they are important to national or global supply chains and gain government approval, the Hubei government said on its website. Other businesses cannot begin work until March 21.
Official Chinese data has in recent days suggested the outbreak, which has infected over 80,000 people across the country, is under control in most areas of Hubei, even as new cases continue to be discovered in the Wuhan on a daily basis.
In other high-risk areas outside Wuhan, major infrastructure projects can restart. In medium-risk areas law, accounting and software companies as well as construction companies that “mostly work outside” can return to work.
Cities, towns and counties considered low-risk will draw up lists of approved companies, but cinemas, internet cafes, karaoke parlours and other consumer-facing businesses cannot open until the epidemic has been eliminated.
Worker at Norwegian oil field tests positive for virus
A worker at an oil field owned by Equinor, the Norwegian energy company, has tested positive for the coronavirus.
The company said on Wednesday that it is “in dialogue with the Norwegian health authorities about further measures”:
The infected person has been in isolation in his cabin since 9 March. Measures to prevent further contamination for offshore installations has been introduced. It has not been decided when the person will be brought ashore.
The person had recently visited Austria, the company added.
The Martin Linge oil field is currently under construction, and is expected to start production at the end of the year.
Oil and coronavirus jitters leave markets shaky
By Hudson Lockett in Hong Kong and Leo Lewis in Tokyo
Crude oil rose even as haven assets rallied on Wednesday, with US Treasuries and the Japanese yen gaining ground as investors remained on high alert in choppy markets.
Brent crude, the international benchmark, rose 4 per cent in Asia trading to $38.71 a barrel, while US marker West Texas Intermediate gained 3.2 per cent to $35.45. Brent is up about 12 per cent from its closing level on Monday, when prices crashed by more than a quarter after Saudi Arabia launched an oil price war.
Traders said doubts were rising over whether policymakers in the US and elsewhere could restore investor confidence with stimulus to offset the economic blow from the coronavirus.
Remaining unease was evident in futures markets, which were tipping a 2.5 per cent fall for the S&P 500 when Wall Street opens. Overnight, the S&P 500 climbed 4.8 per cent. The yield on 10-year US Treasuries dropped 12 basis points to 0.68 per cent, though was still comfortably above recent lows. Yields fall when prices rise.
In Asia, the Topix index was down 0.6 per cent in afternoon trading while Hong Kong’s Hang Seng was flat and the CSI 300 in China nudged down 0.1 per cent.
Cathay Pacific expects ‘substantial’ loss in first half
Alice Woodhouse, Primrose Riordan and Nicolle Liu report from Hong Kong
Cathay Pacific said it expects a “substantial” loss in the first half of 2020, citing a fall in travel demand as coronavirus hits the airline industry.
The Hong Kong-based airline, which had already been knocked by falling traffic to the city following months of anti-government protests, said it was difficult to predict when conditions would improve.
“Travel demand has dropped substantially and we have taken a series of short term measures in response,” said chairman Patrick Healy. “These have included a sharp reduction of capacity in our passenger network. Despite these measures we expect to incur a substantial loss for the first half of 2020.”
Cathay was forced to cut the number of flights to mainland China after the virus broke out in Hubei province.
Available seat kilometres, which measures passenger carrying capacity, was reduced by 30 per cent in February and 65 per cent in March and April. The airline expects capacity and the number of flights to be reduced in May.
The comments came as the airline released its results for 2019. Net profit fell 28 per cent in 2019 to HK$1.69bn ($217.7m), from HK$2.34bn a year earlier. That was above a Bloomberg forecast of a HK$1.59bn profit. Just HK$344 million of this was made in the second half of 2019, down from HK$2.6bn for the same period in 2018, as Hong Kong was hit with a serious political crisis and ongoing protests.
The airline reported revenue of HK$106.97bn, down 3.7 per cent on a year earlier, but coming in just above a Bloomberg estimate of HK$106bn.
Australian economy on verge of recession - S&P
Jamie Smyth reports from Sydney
Australia’s economy will go into recession by June and grow just 1.2 per cent in 2020 due to the coronavirus, according to S&P, in an economic shock that stands to surpass the fallout of the 2008 financial crisis in the country.
However, the rating agency said on Wednesday the nation’s coveted AAA rating was not under immediate threat due to its strong fiscal position, which meant Australia could weather a temporary economic shock and had the firepower to deliver a stimulus package to counter the virus.
“Rating stability is anchored in our expectation that the global outbreak will subside during the second quarter of 2020 and that the economy will bounce back shortly after. Further, the country's strong fiscal position has provided it with some room to manoeuvre at the current rating,” said S&P in a report.
S&P warned the AAA rating could come under pressure if weak economic conditions are more prolonged than it expects.
Canberra is due to unveil an economic stimulus package reportedly worth up to A$10bn on Thursday in a bid to prevent the economy falling into recession due to the coronavirus outbreak, which has led to travel bans, steep declines in tourism numbers and falls in consumer confidence.
Australia has not experienced a recession for 29 years but the dramatic impact of the virus on China, its largest trading partner, has promoted some economic forecasters to predict two consecutive quarters of contraction in the first half of 2020.
This week Westpac forecast Australia would go into recession in the first half of 2020 and on Wednesday Citi downgraded its forecasts, predicting the economy would contract by 0.25 per cent in the first quarter and flatline in the second quarter.
Chinese economy to return to normal by mid-April: ANZ
Economic activity in China will likely return to normal by the second week of April as strict measures to stem the spread of coronavirus are eased, according to economists with ANZ.
Raymond Yeung, chief economist for greater China at the Australian banking group, said the fall in new cases suggests the coronavirus has come under control in the country.
“President Xi Jinping’s visit to Wuhan likely signals the government’s confidence that the outbreak is now under control,” he said. “Thus, we believe the government will soon relax the lockdown measures to some degree.”
China locked down Wuhan, the centre of the outbreak, and surrounding cities in January and restricted movement of people in other parts of the country, limiting the ability of migrant workers to return to factories after the lunar new year.
White-collar workers have all returned to work this week in major cities and blue-collar workers are expected to return to their places of work and complete quarantine requirements by the first week of April, ANZ said.
“Assuming that one week is required for supply chain adjustments across the country, including the shipping of materials and parts, China’s manufacturing sector will likely return to normal by the second week of April,” he said.
The recovery in the services industry might be slower given safety measures to contain the spread of the virus. “Since the government will still be wary of another contagion, retails, restaurants and event-related activities will still be subdued in the near term.”
Cathay repurposes passenger aircraft for China freight
Primrose Riordan and Nicolle Liu report from Hong Kong
Cathay Pacific, which has grounded planes and placed staff on leave due to low traveler demand, has said it has started re-purposing passenger aircraft to carry freight to mainland China.
The company said while it has suspended a number of passenger flights, it has started using some of these planes to “meet customer demand” in Beijing, Shanghai and Chengdu.
Cathay has also been suspending more traveler flights to Japan, but said it was looking at how to maintain its air cargo flights.
“Although we do expect our passenger belly cargo operations to be impacted, we are currently evaluating how to continue serving our cargo customers to and from Japan. This includes the retention of certain passenger services for cargo carriage only,” the company said in an email to its customers on Monday.
Airbnb to incentivise host refunds amid travel disruption
Dave Lee reports from San Francisco
Short-term rental company Airbnb is trying to encourage more hosts to offer refunds to guests facing last-minute travel disruption due to the coronavirus.
Airbnb’s policy allows any booking to be cancelled, with a full refund, within 48 hours of being placed. But after that point, refunds vary depending on which option the host chooses.
Airbnb is hoping to encourage more of its hosts to choose the most generous option - which offers a refund of the nightly rate until 24 hours before check in - by promoting their listings more prominently if they select it. For these hosts, Airbnb says it will also waive the 3 per cent fee for new bookings, up until 1 June.
Airbnb had already put in place an “extenuating circumstances” policy that meant customers received a full refund, regardless of the host’s policy choice, if they had booked a trip in a severely affected area - China, South Korea and Italy - or were travelling from those locations. Likewise, hosts could cancel those guests without penalty.
The additional measures underline Airbnb’s difficulty in keeping both sides of its business - guests and hosts - feeling as though they are being fairly treated.
“Hosts lose earnings that they rely on to make ends meet,” the company said. “Guests are losing hard earned vacation savings. We strive to support both sides.”
Airbnb, which has said it plans to go public this year, has not yet provided any information on just how damaging the coronavirus has been to the company.
“While it is clear that the Coronavirus will have an impact on the entire travel and tourism industry, we believe travel will recover in the long run,” it said. “It is one of the largest and most resilient industries in the world.”
South Korea reports 242 new coronavirus cases
By Edward White
South Korea on Wednesday reported 242 additional coronavirus cases, almost double the number of new cases reported on Tuesday, as the emergence of a new outbreak in Seoul worries officials.
The latest increase, which took the total caseload to 7,755, came after the identification of a new cluster of infections at a call centre in Seoul and marked a reversal following four-straight days of declining new infections.
Park Won-soon, Seoul mayor, told a local radio station that 90 new coronavirus cases had been confirmed, all linked to a call centre in the city’s south-west. More than 500 workers at the centre were being screened.
The case has raised concerns that optimism which had been building in recent days over successful efforts to control the outbreak might be premature.
South Korea has for weeks rolled out a programme of mass public testing centred on Daegu, the country’s worst affected area. More than 200,000 tests have been run and the death rate from the virus has remained below 1 per cent despite one of the world’s highest infection tallies outside of China.
Thailand approves $12.7bn of stimulus measures
John Reed reports from Bangkok
Thailand’s cabinet has approved $12.7bn of stimulus measures to protect its economy, which relies heavily on tourism and exports, in the face of the coronavirus outbreak.
The package, announced by the government late on Tuesday, includes low-interest loans, a fund, and tax breaks for those affected by the outbreak. “We are ready to introduce more if necessary,” Lavaron Sangsnit, a senior finance ministry official, told reporters in remarks quoted by Reuters.
Thailand’s economy, the second-largest in south-east Asia after Indonesia’s, was already slowing before the virus hit. Yutthasak Supasorn, the governor of the Tourism Authority of Thailand, said this week that the country, which hosted 38m tourists last year, could lose almost 10m in a worst-case scenario if the virus is not contained.
Tourism contributes more than 10 per cent of Thailand’s GDP, and passenger traffic at Bangkok’s two main airports is down by more than half compared to 2019 levels.
The government last year introduced smaller-scale stimulus measures targeting Thai consumers aimed at promoting domestic tourism and shopping.
China reports 22 new coronavirus deaths
Health authorities in China reported 22 new deaths from coronavirus to the end of Tuesday, up from 17 a day earlier and taking the total number of fatalities to 3,158.
There were 24 new cases of the virus in the mainland, up from 19 a day earlier. Wuhan, the centre of the outbreak, accounted for 13 new cases, while 10 were recorded among people who had returned to China from overseas.
The total number of people who have been treated and discharged from hospital rose to 61,475.
Asia: what you might have missed
● Google has asked all of its staff based in North America to work from home, the biggest of the tech companies to do so.
● Nadine Dorries, UK junior health minister, has tested positive for coronavirus. Ms Dorries met hundreds of people in Westminster last week and attended a reception at Downing Street with prime minister Boris Johnson.
● Walmart has temporarily adjusted its sick leave policy after an employee tested positive for the virus.
● A series of events in the US, including the Coachella Valley Music and Arts Festival, have been postponed because of coronavirus. Joe Biden and Bernie Sanders have also cancelled political rallies in Ohio.
● Moscow has banned most public events for a month in response to the coronavirus, a measure critics say is an attempt to stop protests against president Vladimir Putin’s move to possibly extend his rule until 2036.
● Luigi Di Maio, Italy’s foreign minister, has said the country is turning to China to obtain urgent medical supplies to help its health service cope with the coronavirus outbreak
Congressman to self-quarantine after friend tests positive for coronavirus
Demetri Sevastopulo reports from Washington
Don Beyer, a Virginia Democratic lawmaker, on Tuesday became the latest member of Congress to announce they would self-quarantine after interacting with someone who had contracted the virus.
Mr Beyer said he had dined with a friend who later tested positive for coronavirus. On Monday, Matt Gaetz, a Florida Republican also decided to put himself in isolation, just hours after he had flown on Air Force One with President Donald Trump. The White House has said that the US president has not been tested for the virus.
Mr Gaetz, a Trump supporter who wore a gas mask this week to play down the coronavirus, was isolated in a room on Air Force One after learning just before boarding that he had interacted with a victim. After arriving in Washington, he drove back to Florida and slept in his car in a parking lot because he could not stay in a hotel. “He wasn’t joking – he slept in a Walmart parking lot,” his office told the Financial Times.
The House and Senate are due go on recess next week, but members are debating whether to extend the recess, as some companies across the US urge workers to telecommute if possible. One Republican lawmaker said there was much discussion about whether they should extend the recess, particularly as Mr Trump and his economic team work with Congress to pass a stimulus package to help the economy weather the impact of the outbreak.
Australia to set up pop-up coronavirus testing clinics
Jamie Smyth reports from Sydney
Australia is spending an extra A$2.4bn ($1.6bn) on health services, including setting up 100 ‘pop-up’ testing clinics and a new telephone health advice service, in response to the spread of the coronavirus.
It is also introducing a travel ban on all non residents seeking to travel to Australia from Italy, as the rate of infections continues to increase in the European nation, Scott Morrison, Australia’s prime minister said on Wednesday.
Canberra has already banned non residents who have travelled through China, South Korea and Iran in the last 14 days from entering Australia.
The 100 “pop-up” respiratory clinics are designed to take the pressure off hospitals, which have been inundated by people seeking tests for the coronavirus.
Australian authorities have appealed to people to only seek testing if they have travelled overseas or come into contact with someone who has been diagnosed with the virus.
Australian states have already begun establishing pop up clinics, including a drive-through testing clinic in Adelaide that can receive a patient every 20 minutes.
A telehealth system is being established to provide people in home isolation or quarantine with advice via telephone or video streaming services such as Skype or Facetime.
Seoul mayor raises concern over new virus cluster
By Edward White
South Korea has reported 90 new coronavirus cases linked to a call centre in Seoul, the city’s mayor said Wednesday, potentially reversing the country’s falling rate of new infections seen over the past week.
South Korea on Tuesday reported its fourth consecutive day of declining new coronavirus cases in the latest sign health officials are bringing one of the world’s worst outbreaks under control after weeks of mass testing.
Daegu, South Korea’s fourth-biggest city has been at the heart of the country’s outbreak with the vast majority of the country’s cases to date.
But the comments from Seoul mayor Park Won-soon in a radio interview on Wednesday morning, raised concerns of a fresh outbreak hitting the sprawling capital’s 25m residents, nearly half the South Korean population.
The Korea Centres for Disease Control on Tuesday morning reported 131 new cases, the lowest since February 25.
The total number of infections is now above 7,500, with more than 50 deaths. Officials have run more than 210,000 tests with around 10,000 tests carried out each day.
Australian central bank chief warns of hit from China disruption
Jamie Smyth reports from Sydney
Australia’s central bank has warned a delayed return to work in China due to the coronavirus would dent the local economy but said a combination of monetary and fiscal stimulus should enable it to bounce back once the virus is contained.
Guy Debelle, Reserve Bank of Australia deputy governor, said on Wednesday there is still significant disruption to the Chinese economy following the prolonged shut down over its lunar new year holiday. It is very uncertain how long it will take to repair severe disruption to supply chains, he said.
“The straight arithmetic of losing a substantial amount of output over a period of several weeks implies a significant hit to economic activity,” Mr Debelle said in a speech.
China is Australia’s largest trading partner and a collapse in student numbers and tourists from the country, with inbound airline capacity slumping 90 per cent from China, is forecast to subtract 0.5 per cent of growth from gross domestic product in the March quarter.
Mr Debelle said it was too uncertain to assess the impact of the virus beyond the March quarter. But he said there was no indication of disruption to exports of iron ore or coal at this stage and prices remained resilient- a factor that should support exports.
Mr Debelle said a government stimulus package, which is due to be announced this week, and record low interest rates would support the economy.
“The combined effect of fiscal and monetary policy will help us navigate a difficult period for the Australian economy. They will also help ensure the Australian economy is well placed to bounce back quickly once the virus is contained,” said Mr Debelle.