Five Things You Need to Know to Start Your Day
Get up to date on what's moving global markets this morning.
(Bloomberg) --
Coronavirus fears intensify with new cases in Italy and South Korea, financial markets start the week with caution, and Group of 20 chiefs sound alarm about the virus’s impact on global supply chains. Here are some of the things people in markets are talking about today.
The coronavirus continued its global human and economic destruction over the weekend. Hong Kong’s finance chief warned the virus threatened by a “Tsunami-like cataclysm,” as the virus devastates business already hobbled by months of anti-government protests. South Korea raised the country’s infectious-disease alert to the highest level after a 20-fold increase in cases in five days. The U.K. said four passengers who arrived Saturday from the Diamond Princess cruise ship in Japan tested positive for the virus. Three passengers on the ship have died while another tested positive at home, despite a negative reading during the ship’s quarantine. Italy canceled public events in the north of the country including the Venice Carnival after coronavirus infections rose to 140 and a travel ban affecting about 50,000 people southeast of Milan was implemented. Inside China, top leadership pledged further fiscal and monetary steps to help growth rebound and pushed factories to reopen. Read our virus update for more.
The caution that’s gripped financial markets lately showed no signs of letting up as trading got underway this week, with concern that the coronavirus will hamper growth prospects hitting the Australian and New Zealand dollars. The yen gained. Equity futures indicated a soft start across the Asia Pacific after the S&P 500 Index lost 1.1% on Friday. Over the weekend, finance chiefs and central bankers from the world’s largest economies said they see downside risks to the global economy persisting as supply chains get disrupted from the deadly virus. Japan is shut for a holiday and Treasuries won’t trade until the London open. Treasury yields last week reached fresh lows and global equities declined. Earnings reports this week include Standard Chartered, Beyond Meat, Rolls-Royce and Dell. Hong Kong GDP is due Wednesday and a South Korean rate decision is due on Thursday.
Finance chiefs and central bankers from the world’s largest economies say they see downside risks to global growth persisting as the coronavirus raises uncertainty and disrupts supply chains. While delegates at the Group of 20 meeting in Riyadh, Saudi Arabia, spent much of their time talking about a response to the outbreak that originated in China, their final communique only mentioned the epidemic once, saying they’d enhance risk monitoring. And although it said the participants agreed on a “menu of policy options” to counter the emergency, the statement included few details on a coordinated response. The G-20 countries “agreed to be ready to intervene with the necessary policies related to these risks,” Saudi Finance Minister Mohammad Al Jadaan said.
Hong Kong’s companies have no safety net in a fight for survival because the city has no procedure to protect companies in bankruptcy. Hong Kong is being threatened by a “Tsunami-like” cataclysm, the city’s finance chief has warned, as the new coronavirus devastates businesses already hobbled by months of anti-government protests. Unlike in the U.S., Australia and rival Singapore, businesses in Hong Kong don’t have recourse to any corporate rescue procedure when in difficulties. The lack of a proper legal framework for seeking bankruptcy protection, which has been deliberated on for a quarter century, means companies are forced into liquidation, according to Johnson Kong, the president of the Hong Kong Institute of Certified Public Accountants.
It’s a story of drugs, gangs, human trafficking and one Australian billionaire. The first set of public hearings starts Monday to consider media reports that Crown Resorts used agents linked to gangs, traffickers and money launderers to attract wealthy Chinese gamblers to its casinos. It’s another potential ordeal for 52-year-old billionaire James Packer who for more than three years has endured blow upon blow: A bruising clash with Chinese authorities and at least two aborted deals with suitors. Ultimately, the probe will assess if Crown should keep its license to run a A$2.2 billion ($1.5 billion) Sydney harborside gaming development that Packer has championed for almost a decade. Packer is on a list of witnesses to be called, thrusting him into the spotlight and likely subjecting him to forensic scrutiny.
What we've been reading
This is what's caught our eye over the last 24 hours.
- The bond rally in emerging markets may not be all it seems.
- Australian dollar reaches a tipping point.
- Miners face a dilemma as gold surges.
- Bangkok has 100,000 empty apartments. Soon it may have more.
- Political turmoil brews in Malaysia with ruling alliance upended.
- Buffett extols value of stock bets in a year without big deals.
- Super-size solar farms are taking over the world.
To contact the editor responsible for this story: Adam Haigh at ahaigh1@bloomberg.net
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