Archives of “April 2020” month

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China says expresses grave concerns on Australia questioning its handling of the coronavirus

  
  Analysis

One to be mindful about in case it impacts the relationship between the two countries, which haven’t been the best recently

Australia China

The Chinese foreign ministry says that it expresses grave concerns on Australia’s foreign minister, Marise Payne, having insisted to call for an investigation into China’s handling and transparency of the coronavirus pandemic.

It’s nothing too harmful for now, but strained relations could lead to economic impact and that won’t be good news for the aussie currency if that happens.
AUD/USD is keeping a little lower on the day at 0.6353 currently, off lows of 0.6336 earlier.

Eurostoxx futures +1.0% in early European trading

  
Analysis, Global Indices
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A slightly more positive tone but it belies the underlying risk tone risk

  • German DAX futures +1.0%
  • French CAC 40 futures +0.6%
  • UK FTSE futures +0.9%
Despite some positive elements to kick start the morning, it doesn’t quite tell the whole story in the market as we see the dollar keep slightly firmer to start the session.
US futures are also down by 0.5% currently while the bond market is hinting at more tepid tones as well. As such, be mindful of stock gains ahead of the cash market open.

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
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