CORONAVIRUS UPDATES:
Ø Total confirmed cases: More than 98,088
Ø Total deaths: At least 3,356
Ø The coronavirus COVID-19 is affecting 89 countries and territories around the world and 1 international conveyance (the Diamond Princess cruise ship harbored in Yokohama, Japan).
Ø US cases: At least 221, and deaths: 12
- WHO calls on all nations to ‘pull out all the stops’ to fight outbreak
The World Health Organization called on all nations to “pull out all the stops” to fight the COVID-19 coronavirus as it continues to spread outside of China.
“This epidemic can be pushed back but only with a coordinated and comprehensive approach that engages the entire machinery of government,” WHO Director-General Tedros Adhanom Ghebreyesus said during a press briefing at the agency’s headquarters in Geneva. “We’re calling on every country to act with speed, scale and clear-minded determination.”
Tedros said world health officials are “deeply concerned” about the increasing number of countries reporting cases, especially those with weaker health-care systems. He’s also worried that some countries aren’t taking this seriously enough or have decided that there’s nothing they can do to curb local outbreaks.
- U.S. Congress approves, sends to Trump $8.3 billion to fight coronavirus
The U.S. Senate on Thursday passed and sent to President Donald Trump an $8.3 billion funding bill to help state and local governments combat the spreading coronavirus, as public health experts outlined efforts to rapidly accelerate testing for the disease.
Trump is expected to sign the bill into law so that the billions of dollars can flow toward developing vaccines against the highly contagious coronavirus and aiding international efforts to control transmission.
- The coronavirus domino effect: South Korean tech firms reel as Vietnam links curbed
For one South Korean multinational company that makes smartphone components used by Apple Inc and LG Electronics Inc, the coronavirus epidemic is dealing blow after blow.
First, the initial outbreak forced its China factory to shut down for almost three weeks and caused supplies from China for its Vietnam plant to begin to dry up. Then when the virus spread to South Korea, travel restrictions prevented its workers from keeping an expansion at the plant, located in the port city of Hai Phong, on track.
Now the company, which declined to be named to protect business relationships, is looking at disruptions in its factory in the industrial hub of Gumi, less than an hour’s drive from Daegu, the epicenter of South Korea’s coronavirus cases.
In addition to continued difficulties with sourcing from China, the supplier of smartphone screen parts and camera modules to LG firms has been hit by some worker quarantines and is fretting about the prospect of even more - problems likely to ripple through to end customers including Apple.
- Bank of Canada sees rate cut cushioning the economic blow of coronavirus
The Canadian economy’s resilience could be “seriously tested” by a coronavirus outbreak but the Bank of Canada’s decision to cut a key interest rate this week should help soften the blow, Governor Stephen Poloz said on Thursday.
On Wednesday, the bank slashed the overnight rate by half a percentage point to 1.25% and said it was prepared to cut further if needed to help tackle the effects of the coronavirus, also known as COVID-19.
· Wall Street wants more than Fed rate cuts
Between Congress’s fiscal stimulus and the Federal Reserve’s easing, Wall Street sentiment is clear: Government spending is way more important in trying to combat the virus and, in turn, calm investors.
The emergency 50 basis point Fed cut, while perhaps a reassuring signal the central bank is willing to act with speed to support the economy, isn’t able to correct big supply shocks caused by the virus, said Nathan Sheets, chief economist at PGIM Fixed Income.
“The Fed’s stimulus doesn’t fix broken supply chains or persuade people who are worried about being exposed to the virus to leave their homes and spend,” Sheets wrote in an email to CNBC. “But it should provide a safety net of sorts by helping ensure that financial conditions remain supportive, lifting sentiment more generally, and helping to ensure that there is ample liquidity in the system.”
“Bottom line is that the Fed’s action is helpful, but it’s not a panacea,” he added.
· Fed's Kaplan: New infections key factor for rate decision
Dallas Federal Reserve President Robert Kaplan said on Thursday he will be looking closely at how far and fast the new coronavirus spreads in the United States as he weighs a decision on interest rates at the U.S. central bank’s policy meeting later this month.
The number of new diagnoses of COVID-19 will, he said, be “a key factor at least I’ll be using to judge ... whether we should do more” monetary policy easing at the Fed’s March 17-18 meeting. The normal economic data the Fed relies on, he said, are not very useful when the situation is changing so rapidly.
· Dollar surrenders to euro and yen as rate supremacy ends
The dollar nursed savage losses against the yen and euro on Friday as a plunge in U.S. yields to record lows wiped out the currency’s single greatest attraction for investors - higher interest rates.
Mounting fears over the fallout from the coronavirus has driven a truly tectonic shift in expectations for U.S. rates as markets wager the Federal Reserve will have to cut rates by 50 basis points for a second time this month.
In particular, were the euro to close above the December peak of $1.1239, it would breach a down channel from August 2018 and signal a clear break of the bull trend.
The single currency was almost there, being up at $1.1226 EUR= on Friday having surged 0.9% overnight and a world away from the February trough of $1.0775. It was already up 1.9% for the week which would be the largest such gain since June 2017.
There were lots of other miserable milestones, with the dollar sinking to a six-month low on the yen at 105.96 JPY= having shed 1.2% overnight. The next bear targets were 105.72 and 104.44, lows from August and September last year.
It also sank to a two-year trough against the Swiss franc at 0.9443 francs CHF=, and was down 2% for the week so far.
The yen, euro and Swiss franc are backed by countries that run strong external surpluses, while Japan has the added advantage of being the world’s largest creditor nation.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 96.820 after seeing earlier highs above 97.
Those safe-haven attributes had grown in importance as U.S. 10-year yields US10YT=RR tumbled to just 0.91%, a drop of 66 basis points in just 11 sessions.
Fed fund futures <0#FF:> were also pricing in more than 80 basis points of further easing by year end.
· Investors will monitor a key jobs report on Friday for signs of any negative impact on the labor market from the coronavirus. The U.S. economy is expected to have added 175,000 jobs in February, down from 225,000 in January.
The weekly jobless claims data on Thursday underscored the labor market strength despite the outbreak. Initial claims for state unemployment benefits slipped 3,000 to 216,000 for the week ended Feb. 29. Economists polled by Reuters had forecast claims would fall to 215,000 in the latest week.
· Britain's government spent 4.4 billion pounds on Brexit planning
Britain’s government has spent at least 4.4 billion pounds ($5.6 billion) of taxpayers’ money on preparations to leave the European Union, the public spending watchdog said on Friday, in the first detailed estimate of the cost of Brexit.
· Oil slides as demand worries overshadow OPEC deal to deepen supply cuts
Oil prices fell on Thursday as the coronavirus epidemic showed no signs of slowing, feeding worries about the global economy and prompting investors to sell more risky assets like stocks and crude oil and park money in safe havens.
Oil’s losses came even as OPEC agreed to cut crude output by an extra 1.5 million barrels per day (bpd) in the second quarter, its deepest cut since the 2008 financial crisis.
The group made its action conditional on Russia and others joining. Analysts and traders said global oil markets were likely to be oversupplied in the second quarter as demand plummets.
Brent crude LCOc1 fell by $1.14, or 2.2%, to settle at $49.99 a barrel while U.S. West Texas Intermediate (WTI) CLc1 ended the session down 88 cents, or 1.9%, at $45.90.
OPEC will propose the new 1.5 million bpd cut be extended until the year end, sources said.
Russia has so far indicated that it would back an extension rather than deeper production cuts.
Reference: Reuters, CNBC, Worldometers
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