Archives of “April 20, 2020” day

rss

Nikkei 225 closes lower by 1.15% at 19,669.12

  
Analysis, Global Indices

Japanese stocks slump to kick start the new week

Nikkei 20-04

A mixed picture for Asian stocks today, with some hints of softness amid lingering concerns surrounding the virus outbreak in the region. The Hang Seng is also down by 0.2% so far today, with US futures down by around 0.5% currently.

It is a mixed picture for risk so far today with European futures keeping slightly higher, while bond yields are mildly lower currently.
In the currencies space, the overall mood is also mixed with the yen sitting lower while commodity currencies are also down on the day as the dollar keeps firm.
USD/JPY is at 107.90 while AUD/USD is down to 0.6343 to start the European morning.

EU’s Gentiloni: €1.5 trillion worth of aid could be necessary to deal with virus fallout

  
Analysis, Economy

Comments by European commissioner for the economy, Paolo Gentiloni

Comments by Gentiloni to German magazine, Der Spiegel:

“The Eurogroup has now made proposals for aid worth more than €500 billion to finance healthcare and short-time work and to help small and medium-sized companies. That leaves at least one trillion euros. This is roughly the amount we need to be dealing with now.”

He also adds that the funds could be raised via the next annual budget.

PBOC cuts one and five year lending interest rates

  
  Analysis

China 1 and 5 year loan prime rates setting from the  People’s Bank of China 

  • 1 year 3.85%, prior 4.05%
  • 5 year 4.65%, prior 4.75%
After the MLF rate (the one year lending rate) was cut last week this was expected.
The cut to the 5 year rate should be especially important for the property sector in the country, to give it a bit of a boost.  The sector is an important driver of demand in China (not only building houses etc but furnishings etc.).

Coronavirus – 21,000 more UK businesses collapsed in March than the same month a year ago

  
  Analysis

Data from the UK showing around 21,000 more UK businesses collapsed in March than the same month a year ago

  • which is a 70% y/y increase in failures
  • number of new companies also dropped dramatically, by 23%
  • Enterprise Research Centre, a group of several leading universities.:
  • “March has been pretty catastrophic,” Mark Hart, deputy director of ERC
  • other factors contributed, such as the stalling economy and Brexit
  • increase from 30,292 in March 2019 to 51,498 in March 2020 was ominous
Via the Financial Times, link here may be gated
I expect April will be even worse given the timing of when the UK went into lockdown.
Data from the UK showing around 21,000 more UK businesses collapsed in March than the same month a year ago

China monthly loan interest rate setting due today – rate cut expected

  
  Analysis
ICYMi:
0130 GMT China 1 and 5 year loan prime rates

  • 1 year expected 3.85%, prior 4.05%
  • 5 year expected 4.65%, prior 4.75%

The expectations for a rate cut today are based on the PBOC providing further support for the economy, which has been hit hard by the coronavirus and the response. We had Q1 GDP data last week, reported its first fall on record in Q1.

March activity data highlighted the dire state of domestic demand, wityh retail sales collapsing.

Singapore’s biggest oil traders, Hin Leong Trading, files for bankruptcy

  
  Analysis

Hin Leong Trading is seeking to restructure debts of almost USD4bn.

  • Hin Leong has debts of $3.85bn
  • The Monetary Authority of Singapore has been in touch with the banks on their exposures, people familiar with the situation said.
  • It is not clear what caused Hin Leong’s financing issues
  • The son of the legendary founder of Hin Leong said the Singapore oil trader hid about $800 million in losses racked up in futures trading
  • suggesting a much bigger hole in the company’s finances than thought, according to people with knowledge of the matter
CL trade is open in the US, oil price is around 3% lower, its lowest since November of 2001.
  • The May WTI contract is expiring 21 April, its down to just above $17 a barrel, lowest for a front-month contract since November 2001
  • WTI June contract is around $24.5 /barrel
Go to top