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US House and Senate negotiators have reached agreement on emergency coronavirus bill

$8.3 billion to combat the coronavirus

The US House and Senate negotiators have reached an agreement on the emergency coronavirus bill. This according to House appropriations spokesman.

  • Total appropriations is for $8.3 billion to combat coronavirus
  • Bill to include 3 billion for research and development of vaccines, therapies and diagnostics
  • more than $300 million to help pay vaccine cause for those who cannot afford it
The House to vote on the funding today.
Meanwhile the IMF’ Kristalina Georgieva is out saying that the IMF has dedicated $50 billion to fund for virus help.
She adds:
  • expects growth this year will be below last year
  • central bank leaders and finance ministers are focused on what can do
  • great attention on liquidity to avoid credit crunch
  • nations are committed to coordinate on reaction to virus

ECB postpones conferences, restricts non-essential travel for staff

The ECB undertakes some safety protocols amid the virus outbreak

All conferences will be postponed, with exception to the monetary policy press conferences next week but other events will be postponed for the time being. Meanwhile, all staff and employees will be restricted from non-essential travel until 20 April.

The next ECB policy meeting will be on 12 March but given recent remarks, don’t expect any fireworks. They are likely going to keep heaping the pressure on governments to step up fiscal measures before even considering to act.

Eurozone February final services PMI 52.6 vs 52.8 prelim

Latest data released by Markit – 4 March 2020

  • Composite PMI 51.6 vs 51.6 prelim
The preliminary report can be found here. There is little change relative to initial estimates so there isn’t much to really gather from the release today.
However, there are early signs as noted by the German reading that the coronavirus outbreak is starting to see some impact on the euro area economy.
The March readings will give us a clearer indication of the situation. Look out for that in three week’s time on 24 March.

China Securities Journal: PBOC may cut OMO rates this month

People’s Bank of China open market operations are one tool used to manage liquidity

  • rates may be cut this month reports the CSJ
China Securities Journal is a national securities newspaper – part of official Xinhua News Agency.

Coronavirus outbreak – World Bank initial package of up to $12bn in immediate support

COVID-19 outbreak has hit >60 countries

World Bank announce:
  • making available an initial package of immediate support to assist countries coping with the health and economic impacts
  • new fast track package
  • financial package will be globally coordinated
  • will make available initial crisis resources of up to $12 billion in financing – $8 billion of which is new – on a fast track basis.
More at that link above

US stocks close lower. Dow down nearly 800 points

Fed rate cut did not help but up and down day in US stocks

The US major indices had a volatile up and down trading day. At the end, the indices all closed sharply lower with each down over -2.8%.
The final numbers are showing:
  • S&P index -87.09 points or -2.82% at 3003.14
  • NASDAQ index -268.07 points or -2.99% at 8684.09
  • Dow down -788.56 points or -2.95% at 25914.93

The major indices initially rallied after the 50 basis point emergency meeting cut by the Fed, but as Fed Chair Powell’s is conference got underway and the Fed chair was perhaps less dovish than the market expected, the stocks gave up gains.

The S&P closed below it’s 200 day MA. At 3049.01, after trading above and earlier in the session. The S&P index is still above the low price from last Friday at 2855.94. That corresponded with the low from October 2019, and is a key target on the downside
The Nasdaq index closed below its 100 day moving average at 8836.91. It will take a move above that level to hurt the negative bias. The 200 day moving average is down at 8401.716