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Good morning. Oil rebounded, European coronavirus responses are still in focus and a heavy earnings day is kicking off. Here’s what’s moving markets.

Accepting Junk

The European Central Bank will accept some junk-rated debt as collateral for its loans to banks in a move that aims to shield the euro area’s most vulnerable economies. The prospect that some government and corporate bonds may face downgrades because of the cost of fighting the pandemic has unsettled investors, threatening to limit the ability of distressed companies to access the credit they need to survive. The decision to ignore deeper ratings cuts comes two days before a possible reduction for Italy by S&P Global Ratings.

EU Summit

It’s not just central bankers taking action. European Union heads of government will hold a videoconference later to discuss the next steps in tackling the pandemic as the trading bloc faces an economic contraction of as much as 10% this year. The European Commission is proposing a 2 trillion-euro ($2.2 trillion) plan for a recovery, according to an internal document seen by Bloomberg News. Some of the hardest-hit member states have argued for the use of joint debt sales, or so-called coronabonds, to finance the recovery.

Virus Latest

Italy registered its highest number of new coronavirus cases in four days on Wednesday, while the World Health Organization warned that infections are trending upward in Africa, Latin America and Eastern Europe, even though numbers are low. The U.K. government is to survey 20,000 households in a bid to track the spread of the disease. Spain’s parliament backed a plan to extend a state of emergency to May 9. And a worrying study found an 88% death rate among Covid-19 patients in the New York City area who had to be placed on ventilators. 

Oil Higher

Oil extended its recovery from Monday’s plunge below zero but remained under intense pressure from a swelling global supply glut. Already inundated with bearish signals, the market shrugged off data showing U.S. stockpiles rising to a three-year high and petroleum demand at a record low. An order by President Donald Trump authorizing the Navy to destroy any Iranian gunboats that harass American ships may have lent some support. In stocks, Asia saw modest gains and European futures are little changed.

Coming Up…

The earnings rush continues with lender Credit Suisse AG, consumer group Unilever NV and miner Anglo American Plc among those reporting. Carmaker Daimler AG abandoned a forecast made just two months ago. Elsewhere, euro area and U.K. purchasing manager indexes for April are likely to slump again, while U.S. PMIs, jobless claims and new home sales are all expected to be ugly. Ukraine is set to bring Europe’s highest benchmark interest rate below 10% for the first time in six years.

What We’ve Been Reading

This is what’s caught our eye over the past 24 hours. 

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