Five Things You Need to Know to Start Your Day
Five Things You Need to Know to Start Your Day
(Bloomberg) --
Good morning. Signs of stabilization may be emerging in Europe, China’s factories are getting back to work and the U.S. is considering more stimulus moves. Here’s what’s moving markets.
Stabilization
The World Health Organization said there are signs of some stabilization in Europe’s coronavirus outbreak, noting the smallest number of new cases in almost two weeks in hardest-hit Italy, which has faced warnings about the quarantine approach and on the powder keg potential of the south. Germany's Angela Merkel had another negative virus test and the U.K.’s Boris Johnson, who tested positive, is now facing increasing pressure to speed up testing of patients and health care workers as the virus spreads. Meanwhile, Euro area finance chiefs have been warned they need to ensure that government policy takes account of the higher debt levels that European countries will have when the virus ends in order to avoid potential break-up risks.
Back to Work
China factory activity saw a strong rebound in March, indicating that the economy is getting back to work just as it will face a steep decline in demand due to the economic blow of the coronavirus outbreak. That helped oil prices to stage a small recovery on Tuesday, even if crude prices are still set for the worst quarter in history in a market where traders are scrambling to book overflowing tankers. Asian stocks were mixed and both U.S. and European stock futures are slightly positive going into what has been one of the most volatile quarters in recent memory.
Stimulus
U.S. President Donald Trump has said the country may expand the travel ban already imposed on Europe and the U.K. to other countries amid continuing efforts to slow the spread of the virus, following from a spike in deaths in New York. Retailers in the U.S. are continuing to furlough workers, even after the $2 trillion stimulus package signed into law last week, and now the White House and congressional Democrats are eyeing a possible fourth round of spending covering extra state aid plus support for areas like mortgages and the travel industry.
Softs
Oil prices hit an 18-year-low and the market is in turmoil, with some barrels going for less than $10, but that doesn't mean it has a monopoly on turbulence in the commodities arena. Soft commodities, covering cotton, sugar and coffee, are on pace to deliver their worst returns since 1986. Yet, even here, much of this is being driven by lower oil prices making it cheaper to manufacture synthetic fibers and damaging the outlook for biofuels in favor of sugar production. There has also been a surge in beef and egg prices as more people stay at home to cook, though bacon has missed out on that rally.
Coming Up…
There is a slew of European data, including euro-area inflation numbers and U.K. GDP, all of which comes with the soon-to-be-familiar caveat that it will either already be bad or giving a bad, virus-hit outlook, so reading too much into it will be tough at this point. Kantar and Nielsen will also publish their latest figures on U.K. grocery sales, which will give an insight in to what extent panic-buying has translated into higher revenue for food retailers.
What We’ve Been Reading
This is what’s caught our eye over the past 24 hours.
- Video-conferencing firm Zoom has been sued.
- There won’t be a world’s best restaurant this year.
- Instagram-perfect superyacht isolation draws ire.
- Home cooks are snapping up luxury food.
- Belarus is taking a different virus approach.
- A popular, low-tech way to pass the isolation time: puzzles.
- Why the virus makes us question reality.
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