The Global Markets This Week

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Contents

Markets & Finance News

How the coronavirus job cuts played out by sector and demographics

The job losses suffered in March as the U.S. economy shut down in the face of the novel coronavirus pandemic were widespread but still were disproportionately felt in a handful of employment sectors and by women, the young and the less educated.

Regional Markets News

United States Europe & Middle East Asia Pacific

Mexican president, BlackRock CEO discussed coronavirus impact

Mexican President Andres Manuel Lopez Obrador said on Saturday that he had a video call with BlackRock Chief Executive Officer Larry Fink to discuss the novel coronavirus and its impact on the world economy. He gave no further details. (Reporting by Stefanie Eschenbacher and Adriana Barrera; Editing by Jacqueline Wong)

UPDATE 3-Brazil lawmakers pass ‘war budget’ as coronavirus cases top 10,000

Brazil’s lower house of Congress approved a constitutional amendment for a “war budget” to separate coronavirus-related spending from the government’s main budget and shield the economy as the country surpassed 10,000 confirmed cases.

MEDIA-Martin Hughes moves to head off Woodford-style crisis for Toscafund – The Sunday Times

— Note: Reuters has not verified this story and does not vouch for its accuracy

UPDATE 5-Canada’s Big Six banks cut credit card interest rates to ease coronavirus impact

Canada’s Big Six banks all said they will reduce interest rates on credit cards to provide relief to customers affected by COVID-19 pandemic.

UPDATE 2-Malawi president, ministers take 10% salary cut to fight coronavirus

Malawi’s president and cabinet will take a 10% salary cut and redirect the money towards the fight against coronavirus, President Peter Mutharika said on Saturday as he announced a stimulus package in an address on state television.

Single passenger flights: The daily woes of airlines, and the crew still working

When Reuters photographer Carlos Barria boarded American Airlines flight 4511 from Washington Reagan National Airport to New Orleans on Friday for an assignment, he was the only passenger on the 76-seat jet.

UPDATE 1-Capital One says it won’t use CFTC waiver related to oil lending

U.S. lender Capital One Financial Corp said on Saturday it would not use a U.S. Commodity Futures Trading Commission (CFTC) waiver after commodity price volatility lifted the bank’s derivatives exposure toward a key regulatory threshold.

UPDATE 4-Spain to extend state of emergency to April 26 as rise in infections slows

Spanish Prime Minister Pedro Sanchez said on Saturday he would ask parliament to extend lockdown measures by 15 days until April 26, as the rate of new coronavirus infections and deaths slowed again in one of the world’s worst-hit countries.

Capital One says it won’t use CFTC waiver related to its oil lending

U.S. lender Capital One Financial Corp said on Saturday it will not use a waiver granted by the U.S. Commodity Futures Trading Commission (CFTC) after commodity price volatility lifted the bank’s derivatives exposure toward a key regulatory threshold.

UPDATE 2-Coronavirus hits Egypt’s administrative capital and grand museum

Egyptian President Abdel Fattah al-Sisi on Saturday postponed moving civil servants to a planned new administrative capital city to 2021 from 2020 due to the coronavirus epidemic, a blow to a flagship project for Sisi that has already faced delays.

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European stocks end lower as COVID-19 economic toll becomes clearer

European shares ended down on Friday, closing the week lower as dismal business activity data heralded a deep economic and earnings recession due to the novel coronavirus outbreak.

UPDATE 2-European stocks end lower as COVID-19 economic toll becomes clearer

* Insurers the biggest drag amid calls for a freeze in dividends

European shares dip as corporate pain from coronavirus outbreak grows

European stock markets headed lower on Friday, erasing meagre gains for the week, as more companies flagged a hit to business from the coronavirus pandemic, foreshadowing a deeper earnings recession ahead of the reporting season.

European stocks scrape out gains as surging oil prices offset virus woes

A late-session rally in the energy sector helped European stocks end slightly higher on Thursday, with sentiment remaining fragile after a sharp rise in U.S. unemployment claims showed further evidence of the coronavirus’ economic impact.

UPDATE 2-European stocks scrape out gains as surging oil prices offset virus woes

* Energy shares outperform on hopes of truce in oil price war

Energy stocks prop up European shares after coronavirus-led rout

European shares bounced on Thursday, driven by a recovery in energy stocks on rising hopes of a truce in the Saudi-Russia oil price war, but worries about the coronavirus pandemic lingered ahead of another expected surge in U.S. jobless claims data.

UPDATE 3-European shares drop as manufacturing crash spells more pain

* Banks among top losers after majors suspend dividends (Updates to close)

UPDATE 2-Virus seen halving profits, dividends in Europe – analysts

* UK banks scrap dividends for 2020, halt 2020 payouts (Adds quotes, background)

European shares slide as more coronavirus damage revealed

European shares tumbled on Wednesday in their first trading session of the quarter, with growing evidence of the economic damage from the still rapidly spreading coronavirus fanning fears of a deep global recession.

European shares tumble as more coronavirus damage revealed

European shares fell on Wednesday in their first trading session of the quarter, as dismal economic data from Asia underpinned the ongoing damage from the coronavirus pandemic and fanned fears of a deep global recession.

FOREX-Dollar climbs on safe-haven bids; shrugs off horrible U.S. jobs number

The dollar firmed against major currencies for a third straight day on Friday, as investors took shelter in the U.S. currency amid worsening economic fallout from the coronavirus outbreak. “As we see poor data coming in from Europe, UK, Italy, if you’re trying to be rushing anywhere, it would be U.S. Treasuries and the U.S. dollar as a safe haven,” said John Doyle, vice president of dealing and trading at Tempus Inc in Washington. The dollar largely shrugged off the U.S. non-farm payrolls report that showed massive job losses of 701,000 last month, compared with expectations of 100,000 lost jobs. March’s contraction abruptly ended a historic 113 straight months of employment growth. The Labor Department also revised February’s number upward to 275,000 job gains. The unemployment rate rose to 4.4% from 3.5% the previous month. “The plunge in non-farm payrolls in March, which is already close to the worst monthly declines during the global financial crisis, suggests the coronavirus pandemic started to decimate the economy even sooner than we thought,” said Andrew Hunter, senior U.S. economist at Capital Economics. The non-farm payrolls report followed Thursday’s data showing initial claims for U.S. unemployment benefits rose to 6.65 million in the latest week from an unrevised 3.3 million the previous week. In afternoon trading, the U.S. dollar index was up 0.4% at 100.61. The index posted a 2.3% gain on the week, having whipsawed last month from highs on a scramble for cash before slumping as the U.S. Federal Reserve flooded the market with liquidity. The euro was down 0.4% against the dollar at $1.0810, on pace for a 2.9% weekly loss. Indecision among euro zone governments about a rescue package for the region’s hobbled economies has weakened the euro in recent days. The Japanese yen, Swiss franc, sterling, as well asthe Australian and New Zealand dollars all lost ground as the dollar strengthened across the board.. The dollar was last up 0.5% at 108.42 yen. As lockdowns continue, the economic impact of the epidemic is becoming more marked, with purchasing managers’ indexes across the euro zone and Britain on Friday showing a slump in business activity. “The complication is that while all the things that the governments have done are very positive, they’re like extra welfare payments and they can’t do anything more than that,” said Adrian Lee, president and chief investment officer at active currency manager Adrian Lee & Partners. “When we do come out of lockdowns, everybody will be desynchronized. China comes out first, then Italy comes out. But the world is so interconnected. It’s not great when you can work in the U.S., but you can’t visit London.” ======================================================== Currency bid prices at 4:08PM (2008 GMT) Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar EUR= $1.0811 $1.0856 -0.41% -3.56% +1.0864 +1.0774 Dollar/Yen JPY= 108.4300 107.9000 +0.49% -0.40% +108.6700 +107.8100 Euro/Yen EURJPY= 117.24 117.13 +0.09% -3.86% +117.3800 +116.7400 Dollar/Swiss CHF= 0.9763 0.9736 +0.28% +0.88% +0.9795 +0.9729 Sterling/Dollar GBP= 1.2265 1.2392 -1.02% -7.50% +1.2410 +1.2208 Dollar/Canadian CAD= 1.4153 1.4131 +0.16% +8.99% +1.4224 +1.4095 Australian/Doll AUD= 0.5993 0.6059 -1.09% -14.64% +0.6075 +0.5981 ar Euro/Swiss EURCHF= 1.0556 1.0566 -0.09% -2.73% +1.0577 +1.0544 Euro/Sterling EURGBP= 0.8812 0.8754 +0.66% +4.23% +0.8836 +0.8742 NZ NZD= 0.5860 0.5916 -0.95% -13.00% +0.5922 +0.5844 Dollar/Dollar Dollar/Norway NOK= 10.5746 10.3582 +2.09% +20.47% +10.6495 +10.3830 Euro/Norway EURNOK= 11.4550 11.2798 +1.55% +16.44% +11.4875 +11.2306 Dollar/Sweden SEK= 10.1758 10.0744 +0.26% +8.86% +10.1983 +10.0928 Euro/Sweden EURSEK= 11.0050 10.9769 +0.26% +5.12% +11.0099 +10.9250 (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Iain Withers in London; Editing by Nick Zieminski, Dan Grebler and Jonathan Oatis)

GLOBAL MARKETS-Global stocks edge lower on economic toll from coronavirus, oil rallies

Global stock markets sank on Friday following more signs that the COVID-19 pandemic would take a massive toll on economic growth, while oil prices continued to rally on hopes of a cut to global supply.

UPDATE 2-Lebanon central bank to unify parallel FX rate, let small depositors cash out

* Major boon for small depositors with trapped savings -analyst

FOREX-Dollar gains on safe-haven bids; shrugs off horrible U.S. jobs number

The dollar firmed against major currencies for a third straight day on Friday, as investors took shelter in the U.S. currency amid worsening economic fallout from the coronavirus pandemic. “As we see poor data coming in from Europe, UK, Italy, if you’re trying to be rushing anywhere, it would be U.S. Treasuries and the U.S. dollar as a safe haven,” said John Doyle, vice president of dealing and trading at Tempus Inc in Washington. The dollar largely shrugged off the U.S. non-farm payrolls report that showed massive job losses of 701,000 last month, compared with expectations of 100,000 lost jobs. March’s contraction abruptly ended a historic 113 straight months of employment growth. The Labor Department also revised February’s number upward to 275,000 job gains. The unemployment rate rose to 4.4% from 3.5% the previous month. “The plunge in non-farm payrolls in March, which is already close to the worst monthly declines during the global financial crisis, suggests the coronavirus pandemic started to decimate the economy even sooner than we thought,” said Andrew Hunter, senior U.S. economist at Capital Economics. The non-farm payrolls report followed Thursday’s data showing initial claims for U.S. unemployment benefits rose to 6.65 million in the latest week from an unrevised 3.3 million the previous week. The figures far exceeded the median estimate of 3.50 million in a Reuters survey of economists. In midday trading, the U.S. dollar index was up 0.6% at 100.78. The index is on track for a 2.5% gain on the week, having whipsawed last month from highs on a scramble for cash before slumping as the U.S. Federal Reserve flooded the market with liquidity. The euro was down 0.6% against the dollar at $1.0787, on pace for a 3.1% weekly loss. Indecision among euro zone governments about a rescue package for the region’s hobbled economies has weakened the euro in recent days, helping the dollar to its best day in two weeks against the single currency on Thursday. Analysts said the euro may also be faltering due to rebalancing by forex reserve managers stocking up on dollars. The Japanese yen, Swiss franc, sterling and the Australian and New Zealand dollars all lost ground as the dollar strengthened across the board.. The dollar was last up 0.4% at 108.39 yen. As lockdowns continue, the economic impact of the epidemic is becoming more marked, with purchasing managers’ indexes across the euro zone and Britain on Friday showing a slump in business activity. ======================================================== Currency bid prices at 12:35PM (1635 GMT) Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar EUR= $1.0789 $1.0856 -0.62% -3.76% +1.0864 +1.0774 Dollar/Yen JPY= 108.3800 107.9000 +0.44% -0.44% +108.6700 +107.8100 Euro/Yen EURJPY= 116.95 117.13 -0.15% -4.10% +117.3800 +116.7400 Dollar/Swiss CHF= 0.9784 0.9736 +0.49% +1.10% +0.9795 +0.9729 Sterling/Dollar GBP= 1.2245 1.2392 -1.19% -7.65% +1.2410 +1.2208 Dollar/Canadian CAD= 1.4131 1.4131 +0.00% +8.82% +1.4224 +1.4095 Australian/Doll AUD= 0.6000 0.6059 -0.97% -14.56% +0.6075 +0.5981 ar Euro/Swiss EURCHF= 1.0557 1.0566 -0.09% -2.72% +1.0577 +1.0544 Euro/Sterling EURGBP= 0.8810 0.8754 +0.64% +4.21% +0.8836 +0.8742 NZ NZD= 0.5857 0.5916 -1.00% -13.05% +0.5922 +0.5844 Dollar/Dollar Dollar/Norway NOK= 10.6186 10.3582 +2.51% +20.96% +10.6208 +10.3830 Euro/Norway EURNOK= 11.4584 11.2798 +1.58% +16.46% +11.4586 +11.2306 Dollar/Sweden SEK= 10.1852 10.0744 +0.17% +8.96% +10.1983 +10.0928 Euro/Sweden EURSEK= 10.9961 10.9769 +0.17% +5.03% +10.9998 +10.9250 (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Iain Withers in London; Editing by Nick Zieminski and Dan Grebler)

GLOBAL MARKETS-Global stocks edge lower on economic toll from coronavirus; oil rallies

Global stock markets sank on Friday following more signs that the COVID-19 pandemic would take a massive toll on economic growth, while oil prices continued to rally on hopes of a cut to global supply.

UPDATE 2-Russia’s central bank sees room for rate cut in coronavirus crisis

* Finance ministry mulls more borrowing – source (Adds details, quotes, background)

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Weekly Market Update (March 30 – April 03, 2020)

Stocks declined last week amid soft economic data and the extension of social-distancing guidelines. Oil surged 32% on prospects of a global deal to cut output and support prices, but the positive sentiment was undercut by the release of regional economic activity surveys that signal a sharp decline in global growth 1 . Employment indicators also showed stress in the labor market, with the U.S. economy losing 700,000 jobs in March and unemployment rising from record lows. With 10 million Americans filing for unemployment benefits in the last two weeks, unemployment will likely continue to rise in the coming months. In this uncertain environment we recommend investors consider systematic investing* and rebalancing instead of trying to time the bottom.

Recessions and Markets: What You Need to Know

The stock market response to efforts to contain the global coronavirus pandemic was sharp and rapid. However, the magnitude of the economic impact of these efforts to contain the virus, through social distancing and business closures, is just starting to take shape. Stocks ended the first quarter of 2020 down 20%, the worst quarter since the 2008 financial crisis 1 . With an economic downturn in the first half of the year becoming increasingly certain, here are answers to four key investor questions about recession.

What is a recession, and are we in one now?

Technically a recession is defined by two sequential quarters of contraction in the gross domestic product (GDP). The rapid onslaught of the coronavirus pandemic as both a health crisis and a global economic shock has shortened this timeline. It is already clear that the economy is near or in recession. For evidence, look no further than the jobs market, once a bright spot of the economy, is now showing the toll of the coronavirus impact. In just the last two weeks, 10 million Americans applied for unemployment benefits. During the 2008 Great Recession it took 28 weeks to reach 10 million claims 2 .

The March jobs report released last week showed the first declines in job hiring since 2020, a staggering loss of 701,000 jobs after posting a healthy 283,000 jobs just one month earlier. The unemployment rate increased sharply to 4.4%, from a half century low of 3.5% 3 . While the declining job growth was not a surprise, the magnitude was greater than analyst expectations because 1) most of the data was collected before widespread efforts to contain the virus through social distancing were adopted by state and local governments, and 2) while two-thirds of the job losses were in vulnerable industries with high social contact like hospitality, retail and restaurants, sizable losses were also found in now-critical industries like health care, which saw 61,200 layoffs 3 .

We expect losses to continue in April as social-distancing measures continue to ramp up. During the 2008 recession the unemployment rate reached 10%, and we may see rates surpass this range temporarily until the economy reopens and economic activity resumes 2 .

How long will the recession last?

Though every recession is unique, there are often common triggers, like inflation being too high or asset bubbles that lead to economic downturns. Recessions tend to be short-lived, lasting about 11 months on average. In fact, since 1954 the economy has expanded seven months for every one month of contraction. The makeup of the COVID-19 recession is different than previous episodes. The economy was solid before the pandemic took shape – unemployment was low, inflation was well-contained near the Fed’s 2% threshold, and there was no threat of an imminent asset bubble.

The table below compares economic indicators in the month prior to the onslaught of a recession with the most recent economic data. The unemployment rate was at a 50-year low, and the household savings rate was 8.2% in February. That’s double the rate of savings before the 2008 recession, which will help consumers better weather the economic downturn than if savings rates were lower prior to the recession. Inflation is also more moderate now than it was in previous recessions. That means that the Federal Reserve has the latitude it needs to keep interest rates near zero until the economy recovers and an expansion takes hold.

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