European leaders agreed to restrict most travel into the continent and German Chancellor Angela Merkel signalled she may be open to joint European Union debt issuance. The Trump administration is considering a stimulus plan that could reach $1.2 trillion.
Bonds plunged on concern about a deluge of debt as nations unveiled plans to spend their way out of the crisis. Stocks fell on mounting worries about the scale of the crisis, with more than 193,000 people infected around the world.
Companies including BMW AG and the owner of fashion giant Zara issued profit warnings, while some supermarkets in Britain are resorting to rationing.
Key Developments:
Cases hit 193,093 worldwide, deaths exceed 7,800
Japan Olympic committee still planning for the summer event
Australia tells citizens not to travel abroad; PM shames hoarders
Taiwan bars most foreigners, Hong Kong considering similar step
Most new China’s cases come from abroad, domestic transmission subsides
Updates (latest first)
Euro-area banks get $112 billion from Fed
Euro-area banks took $112 billion made available by the US Federal Reserve on Wednesday to ease funding stress during the coronavirus pandemic. Lenders from the 19-nation bloc borrowed $75.8 billion for 84 days at 0.38% in a special operation coordinated by the European Central Bank. They borrowed $36.3 billion for 7 days at 0.45%. That’s the biggest use of the swap lines since the financial crisis more than a decade ago.
Japan adds travel curbs
Japan will ban visitors from Italy and Spain from Thursday and impose voluntary quarantine of 14 days on visitors from 38 countries including Iran and nations in Europe.
Natixis’s H2O apologises for heavy losses on virus
London-based H2O, which is majority-owned by French bank Natixis SA, has endured large losses across many of its funds this year as bets on the oil price rising, calmer markets and Italian bonds soured. Its funds were hit hard again on Monday, with its Multiequities fund dropping by more than 24%, according to data compiled by Bloomberg.
Italy could extend lockdown
Italian Prime Minister Giuseppe Conte may extend a national lockdown beyond April 3, as coronavirus cases continue to climb in Europe’s worst outbreak, newspaper La Stampa reported.
Conte is likely to maintain measures including travel restrictions and the closure of schools as well as of virtually all retailers. Italy has the world’s second-highest number of diagnosed cases, with more than 30,000 known infections and more than 2,500 deaths. The government has approved a 25 billion-euro package ($27.5 billion).
Earlier, French Health Minister Olivier Veran said the country may start to see the number of new cases level out after 8-12 days of confinement measures, while the Robert Koch Institute warned Germany could have up to 10 million infections in two to three months if residents don’t follow the social distancing recommendations in place.
Meanwhile, JPMorgan Chase strategists extended their projected peak of active cases in Italy to about 38,000 and said it’s still possible for Italian cases to peak in the next seven days. If adjusted for the more pessimistic Italian scenario, JPMorgan’s model now would project a peak across Germany, France, Italy, Spain and the UK of close to 95,000 cases, rather than 80,000 toward the end of March.
UK doesn’t see need for rationing
The UK doesn’t see a need for the government to step in to ration food after a run on key goods, Chief Secretary to the Treasury Steve Barclay told Bloomberg TV on Wednesday. He said supermarkets are well prepared and that preparations for Brexit had given the country a good understanding of its supply chain.
“The message from the industry is that they are very well prepared and they will continue to be able to supply as required,” Barclay said. He also said the outbreak won’t force Britain to delay its departure from the post-Brexit transition period beyond December, because the negotiators aren’t involved in the response to coronavirus.
Earlier on Wednesday, two of Britain’s biggest grocers stepped up their response to the coronavirus pandemic as shoppers crowd stores, with J Sainsbury Plc rationing purchases and Wm Morrison Supermarkets Plc planning to hire 3,500 people to expand its home-delivery service.
Euronext CEO says there’s no reason to close markets
Euronext NV sees no need to shut stock markets during the coronavirus epidemic as they’re functioning efficiently and providing liquidity, Chief Executive Officer Stephane Boujnah said. “There is no reason whatsoever to close markets,” he said in an interview on Bloomberg Television. “It’s extremely important to provide a home for liquidity and price formation.”
HKEX also said it remains committed to keeping its markets fully operational amid the coronavirus outbreak.
The spreading coronavirus has shocked investors this year, erasing nearly $20 trillion in value from the MSCI All-Country World Index in the past four weeks. Italy’s market regulator this week banned short selling for three months as it seeks to curb volatility amid the sell-off, and France and Belgium imposed similar prohibitions for a month each.
Hong Kong has biggest daily jump on record
Hong Kong found 14 new confirmed coronavirus cases, according to the Department of Health. This is the biggest daily jump on record, according to data compiled by Bloomberg, and brings the total confirmed cases to 181, including 9 returnees from the Diamond Princess cruise. All but one case had travel history, Cable TV reported.
Separately, Indonesia pledged to boost stimulus efforts aimed at countering the crisis by as much $1.8 billion, as Southeast Asia’s biggest confirmed 55 more cases taking its total to 227.
Earlier, China reported 13 additional coronavirus cases by end of March 17, with all but one imported. The only one locally reported case was from Wuhan. South Korea reported 93 new coronavirus cases, roughly on par with the increase in recent days, with the total reaching 8,413.
Germany to let banks tap capital buffer
Germany’s financial watchdogs eliminated a key capital requirement for the country’s banks, cutting the countercylical capital buffer to zero from 0.25%. The buffer, meant to strengthen banks in good times for a downturn, will remain there until at least through December. As a result, banks will be able to release more than 5 billion euros ($5.5 billion) of capital they were in the process of building up.
Japanese researchers to test blood thinner for virus treatment
A blood thinner used to treat pancreatitis and kidney disease has been identified as a potential therapy for coronavirus patients, with clinical trials in Japan possibly set to begin within a month, researchers at the University of Tokyo said.
The drug, known by the scientific name nafamostat, is an enzyme inhibitor typically used to prevent blood clots. That mechanism could potentially suppress the protein that the virus needs to enter human cells, according to a statement Wednesday from the University of Tokyo’s Institute of Medical Science.
UBS CFO says able to withstand ‘even severe stressed scenario’
Chief Financial Officer Kirt Gardner said that the bank built up $5 billion of CET1 capital last year, according to a presentation on Wednesday at the Morgan Stanley European Financials Conference. He also said the bank has seen “little to no disruptions” in service to clients and has successfully managed very high volumes across its businesses after the outbreak.
Profit warnings pile up
Profit warnings from UK restaurant and pub companies are quickly piling up as the virus-induced carnage in leisure stocks cements the FTSE 250’s misery.
Marston’s expects to reduce 2020 guidance, Mitchells & Butlers said the virus is having a material impact, while Restaurant Group is seeking covenant holidays with its lenders.
BMW says it’s difficult to offer an accurate forecast
The German luxury carmaker said that 2020 group pretax profit will be significantly lower than last year and announced plans to shutter plants in Europe and South Africa. The spread of the coronavirus will contribute to a decline in worldwide automotive deliveries, the company said Wednesday.
BMW’s warning followed news that car sales in Europe are off to their worst start to a year since 2013. Passenger registrations declined 7.2% in February after a similar drop in January, according to the European Automobile Manufacturers Association. Even those figures may be the best for several months as major European markets like France close dealerships and manufacturers idle plants.
In China, regulators are exploring relaxing some emissions standards to provide relief for automakers battling an unprecedented slump in the world’s largest car market, according to people familiar with the matter.
Barclays signals bonus cuts, warns on profit goal
Barclays Plc may struggle to reach its profitability target for the year as the coronavirus pandemic disrupts its business, joining a string of global lenders warning of uncertainty.
The UK lender might delay some of its investments and cut costs by slashing bonuses, according to Tushar Morzaria, the company’s finance director said on Tuesday. “In a year like this, we have those levers available,” and “obviously variable compensation is one,” Morzaria said.
Zara owner takes $316 million provision for coronavirus
Inditex SA, owner of fashion giant Zara, took a 287 million-euro ($316 million) provision for the coronavirus outbreak, reducing the value of its spring-summer collection and postponing any decision on a dividend.
The coronavirus outbreak has damaged three of Inditex’s largest markets: China, Italy and Spain, all of which have had stringent lock-downs.
Chinese vaccine approved for human testing at virus epicentre
A Hong Kong-listed company said it received Chinese regulatory approval to start human trials of a vaccine against the novel coronavirus. The vaccine, co-developed by CanSino Biologics Inc and China’s Academy of Military Medical Sciences, will undergo clinical trials in Wuhan, CanSino Biologics said in a statement to the Hong Kong Stock Exchange on Wednesday.
It’s another example of a potential weapon against the illness that’s being fast-tracked for testing. Progress is occurring at unprecedented speed in developing vaccines as the highly infectious pathogen that causes Covid-19 looks unlikely to be stamped out through containment measures alone.
Japan moves ahead on Olympics despite coronavirus
Japan’s Olympics organisers will continue with preparations for the Tokyo Games this summer, emboldened by the International Olympic Committee’s statement that the games will go ahead as planned in an “unprecedented situation”. The Tokyo organising committee said in an emailed statement it would “prepare for games that will be safe.”
“There is no need for any drastic decisions at this stage,” the IOC said in a separate statement Wednesday, while acknowledging that the situation is changing “day-by-day”.
Hong Kong may bar foreigners from entering city
Hong Kong may bar all foreigners from entering as it faces a fresh wave of imported coronavirus cases, Radio Television Hong Kong reported, citing Executive Council member Lam Ching-choi on a radio program. If it is found that there are foreigners who travel to Hong Kong to receive medical treatment on purpose, the government would consider introducing such measures, though that’s not yet been seen, RTHK reported.
Taiwan to shut borders to foreign nationals
Taiwan plans to bar all new arrivals by foreign nationals after a sharp increase in imported coronavirus cases over the past few days.
The island’s government announced 10 new cases Tuesday, all of them imported by people returning from overseas travel, in the biggest single-day jump since the beginning of the outbreak. By contrast, Taiwan has seen a slowdown in local transmissions of the disease.
Exceptions to the ban on arrivals, which starts Thursday, will be granted to those with residence permits, diplomats and anyone arriving to carry out commercial contracts, according to Chen Shih-chung, the head of Taiwan’s coronavirus command center.
Japan reportedly considers cash handouts
Japan’s government is considering a cash handout of at least 12,000 yen ($112) per person as part of a coronavirus stimulus package, TV Asahi reported, citing an unidentified government official. A similar handout was given during the financial crisis, and measures topping that may be needed, the official was quoted as saying.
Australia adds travel curbs, PM shames hoarders
Australian Prime Minister Scott Morrison told all Australian citizens not to travel abroad indefinitely and banned non-essential gatherings of 100 people or more, in a dramatic escalation of the government’s response to the coronavirus outbreak.
Morrison also called for his nation’s citizens to stop hoarding, after scenes of chaos in stores across major cities prompted by panic buying among those fearing a months-long lockdown. “It’s been one of the most disappointing things I’ve seen in Australian behaviour in response to this crisis,” he said. “It’s ridiculous, it’s un-Australian and it must stop.”
The nation’s biggest supermarket chain tightened purchase limits during the coronavirus outbreak, after initial caps on necessities proved insufficient. Shoppers at Woolworths Group Ltd stores can now only buy two items of most packaged goods such as coffee and cereal, the company said Wednesday.
