Romania declares state of emergency for 30 days

Valerie Hopkins in Budapest reports:

Romania’s president Klaus Iohannis has decreed a state of emergency for the next 30 days, making it legal to impose price caps on medicine and medical equipment and public utilities.

Mr Iohannis announced the closure of all schools and said that more measures could be taken soon including the gradual closure of borders as well as restaurants, bars and cafes.

Romania has confirmed 158 coronavirus cases while nine people have recovered.

The outbreak came to the southeastern European country just after a motion of no confidence ousted prime minister Ludovic Orban.

Over the weekend, Mr Orban, 56, was reinstated as premier and held the first cabinet meeting by video conference, because he was under self-quarantine after a senator from his party was tested positive for coronavirus. On Friday, the government began a 14-day period of self-isolation.

EmoticonS&P 500 sinks more than 7% at the open, triggers circuit breaker

US stocks were halted for volatility shortly after the opening bell, dropping more than 7 per cent and continuing a wave of selling that stretched from Asia and into Europe.

The S&P 500 was down 8.1 per cent after the market open, triggering circuit breakers that kick in at 7 per cent and pause trading for 15 minutes.

Stocks in Europe were down sharply as investors failed to be soothed by the Federal Reserve’s decision on Sunday to cut US interest rates to zero and joined forces with other global central banks in a bid to prevent a severe economic downturn caused by the coronavirus pandemic.

The FTSE 100 was off 7.5 per cent, while Europe’s broad Stoxx 600 dropped 9.4 per cent. In Asia, Australia’s S&P/ASX 200 tumbled 9.7 per cent, while Hong Kong’s Hang Seng fell 4 per cent.

Investors raced for the relative safety of government bonds, pushing yields lower. The yield on the benchmark 10-year US Treasury sank 22 basis points to 0.736 per cent.

EmoticonBrent falls below $30

Derek Brower, US energy editor, reports:

The oil price collapse accelerated on Monday, with international benchmark Brent falling below $30 a barrel, amid a collapse in demand due to the coronavirus.

Brent was down by more than 12 per cent in early afternoon trading in London, to $29.76 a barrel, its lowest price since 2016, as traders digested the magnitude of a demand shock that analysts say could wipe millions of barrels off consumption this year.

West Texas Intermediate, the US benchmark, was down by around 10 per cent, trading at around $28.61 a barrel and was threatening to break beneath its 2016 low.

The oil market has been slammed by the combined hit of coronavirus to demand, while Saudi Arabia and Russia have started a price war after falling out over how oil producers should respond. Oil traded near $70 a barrel in early January.

Prices last traded below $30 a barrel in 2016, when WTI bottomed around $28 a barrel. But traders warn a significant hit to demand, possibly of 10 per cent of global consumption or more, could be seen in coming weeks as more cities shut down.

Carmaker PSA to close all European factories

David Keohane in Paris and Peter Campbell in London report:

France’s PSA is to shut all factories across Europe as it struggles to cope with the impact of the coronavirus outbreak, hitting more than a dozen sites in countries including Germany, Britain and France.

The closures will be phased this week, with every site closed until at least March 27.

By mid-morning in Paris, the share price of PSA — whose brands include Peugeot, Citroen, Vauxhall, Opel and DS — had dropped more than 16 per cent amidst a broader sell off for the auto industry.

Following a meeting with its unions, the company said:

Due to the acceleration observed in recent days of serious Covid-19 cases close to certain production sites, supply disruptions from major suppliers, as well as the sudden decline in the automobile markets, the Chairman of the Executive Board with the members of the crisis unit, decided the principle of the closure of the vehicle production sites, according to the following schedule and until March 27.”

The affected sites and their closing dates are:

• March 16: Mulhouse (France), Madrid (Spain)
• March 17: Poissy, Rennes, Sochaux (France), Zaragoza (Spain), Eisenach, Rüsselsheim (Germany), Ellesmere Port (United Kingdom), Gliwice (Poland)
• March 18: Hordain (France), Vigo (Spain), Mangualde (Portugal)
• March 19: Luton (United Kingdom), Trnava (Slovakia)

Japanese yen rises more than 2 per cent

Eva Szalay , Currencies Correspondent, reports:

The Japanese yen surged across the board and gained more than 2.5 per cent against the dollar in European trading hours amid the continued slump in equity markets. The currency made similar gains against the euro.

Stock markets have plunged despite coordinated policy action from major central banks on Sunday evening that saw the US Federal Reserve lowering key rates to zero and launching a “kitchen sink” package to combat the impact of the virus.

The failure to reassure investors pushed the yen higher as safe-haven flows accelerated. The dollar traded at Y105.17 before settling around Y105.38. The Bank of Japan responded to the Fed’s cut by increasing their target for annual ETF purchases and introducing a new lending programme to support businesses as well as increasing its commercial paper and corporate bond purchases. The BoJ, however, kept its key rate at 0.1 per cent.

Derek Halpenny, global head of research at MUFG Bank, said the package was more aggressive than expected, but highlighted that the BoJ has less room for policy manoeuvre than the Fed.

We doubt though that today’s BoJ action will prove sufficient to prevent the yen from strengthening further.

Signs spread slowing in Italy, whispers head of Lombardy

Miles Johnson in Rome reports:

The leader of the Italian region that has been worst-hit by the coronavirus has said he is seeing some early signs of the the outbreak slowing.

Attilio Fontana, president of the northern region of Lombardy where almost half of Italy’s active cases are located, told Italian radio on Monday that the rate of increase in cases could be falling.

“Let us hope it is the start of a reversal of the trend. I am saying it in a whisper, that this could be the start of a reversal,” he said.

Prime minister Giuseppe Conte said in an Italian newspaper interview on Monday that the outbreak was still spreading quickly in Italy.

Levi Strauss to temporarily close stores in US and Canada

Levi Strauss will temporarily close its stores in the US and Canada from Monday, becoming the latest retailer to shut locations in North America in an effort to help limit the spread of coronavirus and in response to the guidance of public health officials.

Stores will remain closed through March 27. Store employees will be paid for all scheduled hours during the closure.

Over the weekend, Nike said it would temporarily close its stores in the US, Canada and western Europe through to March 27, while Apple announced similar plans for its shops outside greater China.

Norwegian warns situation escalating ‘by the hour’

Richard Milne, Nordic and Baltic Correspondent, reports:

Norwegian Air Shuttle is temporarily laying off nearly all its workers and cutting 85 per cent of its flights as the embattled low-cost airline warned the coronavirus-inspired crisis was “escalating by the hour”.

About 90 per cent of its workforce will be laid off temporarily, or 7,300 workers from pilots and cabin crew to administrative staff.

The Norwegian airline has cancelled all long-distance flights except those from Scandinavia to Thailand and most European flights save between Norway and Nordic capitals.

Jacob Schram, chief executive, said:

What our industry is now facing is unprecedented and critical as we are approaching a scenario where most of our airplanes will be temporarily grounded. Several governments in Europe have already said that they will do everything they can to ensure that their airlines can continue to fly when society returns to normality. We appreciate that the authorities of Norway have communicated that they will implement all necessary measures to protect aviation in Norway, consequently securing crucial infrastructure and jobs.

Iran’s Revolutionary Guard on ‘wartime footing’ in battle against Covid-19

Najmeh Bozorgmehr in Tehran

Iran’s top commander of the Revolutionary Guards said on Monday that his forces and the medical sector were on a “wartime footing” in their battle against coronavirus.

“All guards forces in the provinces alongside medical sciences’ universities are effectively on a wartime footing,” Major General Hossein Salami said, according to Fars news agency which is affiliated to the elite force.

“We have reached preparedness to contain this disease and have figured out the protocols need for this battle.”

The elite force’s ground and marine forces had allocated 24 hospitals and 13 makeshift centres as well as 380 clinics to help treat patients, he said.

Maj Gen Salami added that so far 6,000 patients had been admitted in its Baghiatallah hospital in Tehran, the largest hospital dedicated for Covid-19 patients. “Every day, about 500 patients are admitted in this hospital which is a huge cycle while this cycle is also happening in other hospitals in the cities of Sari and Mashhad.”

He added that 650,000 voluntary forces of the guards, basij, were also involved to help disinfect streets and distribute around 100,000 foodstuff packages among the poor.

Iran’s supreme leader Ayatollah Ali Khamenei — who is also chief commander of all armed forces — last week ordered military forces to increase their efforts to contain further spread of the disease.

Russian virus cases increase sharply

Russia said on Monday that it has registered 93 coronavirus cases, up from 63 a day earlier, Henry Foy writes.

Four have recovered, Tatiana Golikova, deputy prime minister said, adding that 86 of the cases were people who had entered the country carrying the infection.

While Russia’s number of infections has lagged behind other European nations, the government began building a 500-bed dedicated hospital on the outskirts of Moscow to add to an existing hospital converted to treat the epidemic, in a sign that the Kremlin fears the number of cases could grow rapidly.

Sicily takes steps to distance itself from mainland Italy

Miles Johnson in Rome reports:

Sicily has moved to isolate itself from the Italian mainland, allowing only goods and essential movement of people between the peninsula and the island during the coronavirus outbreak.

“Connections and ordinary transport of people to and from Sicily” would be suspended, Paola De Micheli, Italy’s transport minister, said following a request from the Sicilian regional government.

Business activity in New York state in March hit lowest since 2009

Business activity in New York state staged a dramatic tumble in March to hit its lowest level since the financial crisis and firms feeling the least optimistic since 2009.

The headline general business conditions index in the New York Federal Reserve’s Empire State manufacturing survey tumbled by a record 34 points to a reading of minus 21.5 in March from positive 12.9 in February.

That was its lowest level since 2009, the NY Fed said in a statement, and was well below the median forecast among economists for a reading of 4.

The weak data speak to the one of the most immediate negative impacts from the coronavirus – other than peoples’ health – which was the disruption of supply chains. Given survey responses were collected between March 2 and 10, respondents have yet to weigh in on the impact of the rapidly growing number of restrictions that have been placed on travel, gatherings, schools as well as the closure of businesses.

The survey showed new orders turned negative, dropping 31 points to minus 9.3, indicating overall orders fell, while delivery times were “slightly longer” and inventories were somewhat higher. While the index for the number of employees held steady, the data revealed workweeks had been shortened.

“Firms no long expect general business conditions to be better over the next six months,” the NY Fed observed. The index for future business conditions declined to 1.2, a 22-point drop from February and to its its lowest level since 2009.

Rusal is first Russian industrial group to impose homeworking

Henry Foy in Moscow reports:

Rusal, the world’s largest aluminum producer outside of China, has ordered all non-essential staff to work from home, in the first example of a major Russian industrial company taking such a step in an attempt to stop the spread of coronavirus.

The Russian aluminium monopoly, which operates smelters across Siberia, said that from Tuesday all “employees from head office and staff who are not involved in the production process” should work from home.

“Only those employees whose presence is indispensable to ensure the production is uninterrupted will be present at the production sites,” the company said in a statement on Monday, adding that all business travel had been cancelled.

Russia has 64 confirmed cases of coronavirus and no deaths. But it has steadily closed off its borders to foreigners and visitors from heavily affected countries.

“The current health situation does not only create a serious challenge for the whole economy but above all it puts our employees at risk,” Evgenii Nikitin, Rusal’s chief executive, said.

Rusal has introduced unprecedented measures across the whole company in order to ensure the uninterrupted production process and to protect our employees.

Travellers will be able to pay Rs3,100 ($42) for their room, inclusive of three meals a day, two bottles of mineral water, and WiFi and television in the budget hotels, and authorities expect to fill the rooms in the coming days.

New Delhi requisitions airport hotel rooms for use quarantine use

Amy Kazmin in New Delhi reports:

Authorities in New Delhi are requisitioning rooms in several airport hotels to serve as “pay as you go” quarantine facilities for affluent Indians that have found the government’s own quarantine facilities too squalid.

Since Friday, the Indian government has required any of its citizens that are returning from trips to countries worst-hit by coronavirus – including China, Italy, South Korea, France, Spain or Germany – to undergo a mandatory 14-day quarantine before they can return to their homes and families.

However, many travellers asked to stay in official quarantine facilities have expressed discomfort with the poor, often unhygienic conditions, with many sharing social media videos showing grim conditions, including broken walls, stained sinks and blocked-up toilets.

In Maharashtra, several travellers have attempted to escape the designated quarantine facilities, a phenomenon to which their overall poor conditions are thought to have contributed.

However, in New Delhi on Monday, Arvind Kejriwal, the chief minister, said that the local government has required three of the city’s airport hotels – including the Lemon Tree, the Red Fox and the IBIS – to set aside a total of 182 rooms for travellers that could will be allowed to spend their quarantine time there, if they could pay for it.

Spanish cases pass 9,000 as figures revised upwards

Daniel Dombey in Madrid reports:

Spain now has more than 9,000 documented cases of coronavirus — a jump of 1,400 in 24 hours.

An official release said that 9,191 people had tested positive for the virus, an increase of more than 18 per cent on the previous day’s tally of 7,793. The number of deaths has increased to 309 from 288.

More than half the total of all those with the virus — 4,165 — are in Madrid, where the head of the regional government, Isabel Diaz Ayuso, has also contracted the virus.

At present, 432 people nationwide are in intensive care and 530 have recovered.

ING predicts recessions in the UK, eurozone and Japan

Valentina Romei in London reports:

Dutch bank ING expects the UK, eurozone and Japan to fall into recession in the first half of this year, as the spread of the coronavirus gathers pace.

The US is still expected to grow in the first quarter as the virus’s spread is less advanced there, but ING expects the economy is set to shrink an annualised quarter on quarter rate of 8 per cent annualised in the three months to June.

James Knightley, ING US economist, said:

The supply crunch in manufacturing, the panic in the financial sector and the collapse in airline travel, hotel stays and leisure activities mean we could see a quarterly GDP contraction of the scale reached during the height of the financial crisis, particularly given the prospect of some city lockdowns.

The eurozone economy is set to be hit hardest in the first quarter, as many countries go into full or partial lockdown, the bank said.

Despite a strong fiscal response from the UK government and a 50 basis point cut in interest rates, the UK economy is expected to shrink 0.6 per cent this year.

“A sizable hit to consumer activity — particularly concentrated in travel and hospitality, and mostly hitting during the second quarter — means the UK is likely to enter a technical recession” said James Smith, UK economist at ING.

BioNTech and Fosun Pharma set up $135m vaccine partnership

Clive Cookson in London reports:

BioNTech, the big German biotech, has teamed up with Fosun Pharma of China in the race to produce a coronavirus vaccine. The two companies announced today a $135m partnership, with Fosun agreeing to make a $50m equity investment in BioNTech and paying BioNTech a further $85m in vaccine development and commercialisation fees.

More than 20 companies and public laboratories worldwide are trying to develop a vaccine against Covid-19. Several, including BioNTech, are using so-called mRNA technology. This injects genetic instructions for human cells to make coronavirus proteins which stimulate the immune system to recognise and fight Covid-19 infection.

BioNTech says that, given regulatory approval, it could begin clinical testing of its BNT162 vaccine on healthy volunteers in late April, starting in Germany. The first candidate vaccine for Covid-19, produced by Moderna in the US, starts clinical testing this week.

Assuming these confirm that the vaccine is safe and elicits an immune response, more extensive clinical trials would take place in China in collaboration with Fosun, as well as in Europe and US.

The company is also in advanced talks with Pfizer, the US pharmaceutical giant with which it is already collaborating on flu vaccines, to work on coronavirus too.

At the weekend there was a political storm in Germany over alleged attempts by the US to persuade CureVac, another German biotech developing an mRNA coronavirus vaccine, to move its research across the Atlantic.

IMF prepares $1tn response to pandemic

James Politi in Washington reports:

The IMF said it was ready to mobilise its entire lending capacity of roughly $1tn to help countries hit by the coronavirus outbreak, as it called for governments around the world to deliver “sizeable support” to the global economy from fiscal stimulus.

In a blog the day after the Federal Reserve slashed its main interest rate to near zero, Kristalina Georgieva, the managing director of the IMF, said it was time for national governments to boost spending to support collapsing demand.

Wage subsidies for businesses affected by shutdowns can help prevent cascading bankruptcies and massive layoffs that will have lasting effects for future recovery and negative impact on aggregate demand. Cash transfers to low-income households can support consumption and preserve minimum living standards.

Her comments came ahead of a teleconference call among G7 leaders to coordinate the response to the coronavirus outbreak, which is bringing many advanced economies to a standstill.

The IMF had already pledged to offer $50bn of its funds to help countries weather the pandemic, but bumped that figure up sharply on Monday to cover its entire lending capacity of about $1tn.

BBC delays plan to charge over-75s the compulsory licence fee

Mark Di Stefano in London

The BBC has announced the plan to start charging over-75 year-olds the compulsory licence fee will be delayed for two months because of the threat of the coronavirus outbreak on vulnerable older people.

The public broadcaster was to due to send out letters to millions of people around the country in the coming weeks, notifying older Britons that they’d need to pay the BBC’s £157.50 charge for the first time.

BBC chairman Sir David Clementi said the changes which were due to come into effect on June 1, will now be delayed for two months.

“The BBC board has decided to delay changes to over 75s licence fees,” Sir David said in a statement. “We are in exceptional circumstances. Now is not the right time.

“We are fully focussed on delivering our services to the public at this difficult time.”

The new digital culture secretary Oliver Dowden said he was “pleased” with the decision: “It will be welcome news to millions of older people who now don’t need to worry about their TV licence during this challenging period.

“It is right that the BBC have recognised the exceptional circumstances posed by the coronavirus outbreak and the need for the whole country to pull together in the national effort.”

Microsoft Teams hit by outage as numbers working from home surge

Patricia Nilsson in London reports:

Microsoft Teams, the office communications tool used by roughly half a million companies, was down for more than two hours this morning, amid a surge of people attempting to work from home.

The company tweeted just before 11am UK time that an issue with its chat service had been “mitigated”. Many people, however, responded to the message, claiming they were still experiencing issues.

Countries affected by the coronavirus are increasingly advising people to self-isolate, with some having implemented complete lockdowns or closed borders, leaving businesses in uncharted territory as they battle to continue running operations with staff at home.

Microsoft did not respond to requests for comment on why the tool broke down, but it is the second major outage of its office communications tool this year.

The outage came a few hours after a similar issue faced Microsoft’s Xbox Live service, suggesting that a surge in demand was behind the breakdowns of both office and entertainment tools.

Gold falls 4 per cent amid precious metals selloff

Henry Sanderson in London reports

Gold prices have tumbled by 4 per cent today to their lowest levels this year and platinum fell by as much as 26 per cent as precious metals followed the renewed selloff in global stock markets.

Gold fell to $1,466.4 a troy ounce, its lowest level since early December, as traders looked to sell liquid assets amid growing fears about the coronavirus.

Last week gold fell by 9 per cent in its worst weekly performance since 1983. The metal has lost $237 from its year high of $1,703 a troy ounce on March 9.

The selloff has raised questions about gold’s status as a “safe-haven” asset, which is supposed to perform well in times of market trouble.

Craig Erlam, senior market analyst at Oanda in Europe, said:

You would typically expect it to perform well in such risk-averse conditions … But the huge down days are proving just as problematic for the yellow metal as the up days, with margin covering taking its toll.

Still, Mr Erlam said gold will “come back into favour” once stock markets stabilise.

In 2008, during the financial crisis, gold initially sold off before recovering to end the year higher, according to John Reade, an analyst at the World Gold Council.

Gold has also been a victim of a liquidation of so-called “risk parity” funds, automated investment vehicles that are designed to do well in almost any market environment, according to analysts. Some of these funds also held gold, Mr Reade said.

Platinum fell by as much as 26 per cent on Monday to trade at $558 an ounce, its lowest level in over 17 years. The metal used in catalytic converters and jewellery is on track for its biggest one-day loss on record. Palladium, another precious metal used in catalytic converters, fell by 12 per cent while silver was off by 14 per cent.

European Commission VP Frans Timmermans self-isolating

Michael Peel in Brussels reports:

One of the European Commission’s top officials is in self-imposed quarantine after meeting a French government counterpart who has tested positive for the new coronavirus, Brussels has said.

Frans Timmermans, a commission executive vice-president, put himself in isolation because he met Brune Poirson, French secretary of state to the minister for ecological transition, earlier this month. It was announced at the weekend that Ms Poirson had tested positive for the Covid-19 infection.

Mr Timmermans is so far not showing any symptoms and is “feeling perfectly fine”, Eric Mamer, Commission chief spokesperson, told reporters in Brussels on Monday.

Aeroflot under ‘colossal’ pressure

Max Seddon in Moscow reports:

Russian flag carrier Aeroflot says it is under “colossal financial pressure” after closing routes to most European countries due to the coronavirus outbreak.

Aeroflot said that it would encourage staff to take as much holiday as possible, according to the Interfax news agency. The airline will also close two Moscow sales offices to focus on helping Russians abroad return home.

Spokeswoman Julia Spivakova said:

Given how much it costs, and how long it takes, to train our flight crew and ground crews’ several unique skills, keeping our staff together is a fundamental issue for the company’s stability.

Russia banned most flights to EU countries last week except for the capitals of countries that have yet to close their borders fully, and ended most flights to China, South Korea, and Iran in February. The country has confirmed 63 coronavirus cases so far and closed its border with Belarus earlier on Monday.

Hungary to close land borders to foreign passenger traffic

Valerie Hopkins in Budapest

Hungary has announced the closure of its borders, joining other central European nations in drastic measures to slow the spread of coronavirus.

The country will close its land borders to passenger traffic, premier Viktor Orban said in parliament, noting that only Hungarian citizens can enter Hungary at the borders.

He further added that cinemas and nightclubs would be closed, while restaurants, cafes and shops will be open only until 3pm. Schools at all levels have been closed since Friday, and from midnight on Monday, all public events are banned indefinitely.

Mr Orban also said “A very serious wave of unemployment is threatening Hungary,” saying the whole economy is in trouble, though primarily tourism and hospitality are in trouble. He said his government would be rolling out job protection measures soon.

Head of Madrid regional government tests positive

Daniel Dombey in Madrid reports:

Isabel Díaz Ayuso, the head of the regional government in Madrid, the most affected part of Spain, has tested positive for coronavirus, she said on Monday.

The authority insisted this “does not change at all her role as head of the autonomous Madrid executive”, adding that she should work from home.

Madrid registered a 75 per cent fall in peak-time traffic on the metro this morning compared with a week ago.

UK accounting regulator warns of challenges in preparing accounts

Tabby Kinder in London reports:

The UK accounting watchdog has warned of uncertainty on the outlook for a number of listed companies in its latest guidance about the impact of coronavirus on corporate reporting and capital markets.

The Financial Reporting Council said companies and auditors faced practical difficulties in preparing their accounts, such as restrictions on travel, meetings and access to company sites in some countries such as China, the US and Italy — among the worst hit jurisdictions.

However, it warned the preparers of financial reports and audit firms not to compromise on the delivery of financial statements:

Audits should continue to comply fully with required standards … In current circumstances additional time may be required to complete audits and it is important that this is taken, even at the risk of delaying company reporting.

Several auditors have warned that companies who are approaching their financial year-end will see delays to their accounts, qualifications about the reliability of their figures, and warnings to investors about the company’s ability to operate.

Burford Capital, an Aim-listed litigation fund, delayed its annual results last week due to the impact of Covid-19 on its finance team.

Grant Thornton, the sixth largest UK accounting firm, wrote to its clients to say it would struggle to sign off many of their accounts with a “going concern” opinion — meaning it believes the company can continue trading for 12 months – due to the uncertainty in markets. “We are already seeing clients delaying the signing of their accounts due to the view that they cannot forecast accurately,” the letter said.

Bahrain confirms first Gulf death

Simeon Kerr in Dubai reports:

Bahrain announced the Gulf region’s first death from coronavirus, a 65-year-old female national who had underlying health problems.

She had returned on an indirect flight last month from Iran, where the death toll has reached 853 with 129 new deaths in the past 24 hours amid almost 15,000 infections.

The first death in Bahrain comes as Gulf states move towards virtual lockdowns as infections accelerate towards 1,000.

Dubai on Monday closed bars, pubs and lounges until the end of the month. Qatar ordered restaurants and cafes to close for customers until further notice, allowing delivery services to continue. Oman has also suspended Friday prayers.

Earlier on Monday, Saudi Arabia closed public spaces and suspended government operations, except for health, security and remote education, for the next 16 days.

JPMorgan offers work from home option to staff worldwide

Laura Noonan in Dublin reports:

JPMorgan Chase is offering work from home arrangements to everyone in its global workforce whose roles can be performed out of the office.

America’s biggest bank announced the move in an email to employees on Sunday night, just two days after it told them that between 25 and 50 per cent of staff in eligible roles would be working from home on rotation.

“Our response to the ongoing spread of the Covid-19 coronavirus continues to evolve,” the latest memo from JPMorgan’s operating committee said.

Effective immediately, we are asking all managers globally to allow employees to work from home to the extent feasible. This will further facilitate social distancing in the communities we call home while continuing to serve our clients and customers.

A person familiar with the situation said the updated guidance reflected several US cities’ decisions to close restaurants and bars, and guidance from the Center for Disease Control to avoid gatherings of more than 50 people, as well as the closure of New York’s school system.

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JPMorgan has a global workforce of almost 260,000, including tens of thousands in its network of US branches. On Friday the bank confirmed that two employees at its New York headquarters tested positive for the virus.

The bank said it is “actively reviewing” how it can support branch employees and will announce details “very soon”.

Cases in Malaysia and Indonesia jump

Stefania Palma in Singapore reports:

Malaysia and Indonesia have reported jumps in coronavirus cases. The number of patients in Malaysia has more than doubled in two days, with Kuala Lumpur on Monday reporting 125 new cases that take the total to 553.

Ninety-five cases are linked to the cluster involving a mass religious gathering at Kuala Lumpur’s Sri Petaling mosque that was attended by 16,000. The cluster counts 338 infected individuals.

Malaysia’s health ministry said 12 patients are in intensive care units and require respiratory assistance.

Indonesia has reported 17 new cases, taking the total to 134. The south-east Asian country counts five deaths.

Italian 10-year yield climbs as spreads widen against Bunds

Tommy Stubbington in London reports:

Italian bonds remain under pressure this morning, with the 10-year yield climbing above 2 per cent for the first time since July. The move is uncomfortable for Christine Lagarde, who has tried to walk back comments in her press conference last week which triggered the sell-off in Italy.

The governor of the European Central Bank apologised to other members of the governing council over her remark that it is not the central bank’s job to “close the spread” in bond markets, a reference to the extra borrowing costs Italy and other eurozone members have to pay relative to Germany.

Monday’s selling, which comes despite the ECB last week announcing an extra €120bn of debt purchases this year, is not confined to Italy, with spreads in every other country widening versus German Bunds, considered the safest bonds in the currency bloc.

Greece has been hardest hit, with the 10-year yield climbing above 2.4 per cent. Spanish and Portuguese bonds are widening in a worrying echo of the region’s debt crisis.

US stocks set for another big fall

US equities are set to follow another global sell-off, with futures – and an exchange traded fund tracking the contracts – pointing decisively lower on Monday morning.

Futures for the S&P 500 were down 4.8 per cent during the European morning, but hit 5 per cent lower, known in trader parlance as “limit down”, during Asian trading.

The SPY ETF, which tracks the S&P 500, was down 9.6 per cent.

Amid heightened volatility, the benchmark S&P 500 on Thursday tumbled more than 9 per cent to notch up its biggest one-day drop since Black Monday, only to recover nearly all of that decline in the following session after President Donald Trump declared coronavirus a national emergency in the US.

Stocks in Europe and the UK were nursing declines in the order of 8 per cent to 9 per cent on Monday, while Asian markets were the first to deliver a negative reaction to the Federal Reserve’s decision on Sunday afternoon, US time, to cut interest rates to zero.

Corporate bond prices tumble

Joe Rennison reports from London:

Corporate bond prices plummeted on Monday, seemingly dismissing the Federal Reserve’s stimulus package announced on Sunday to try and restore calm to financial markets.

Junk-rated US corporate bonds sank 3.4 per cent in overnight trading, according to a widely tracked exchange traded fund known by its ticker HYG. A similar ETF with the ticker JNK dropped 3.2 per cent. In Europe, the iShares core Europe corporate bond ETF sank 1.9 per cent in morning trading.

The cost of protecting against the default of junk-rated European companies also shot higher, with an index of 75 high-yield credit default swaps run by Markit moving above 600 basis points for the first time since August 2012.

Investors are reassessing the creditworthiness of corporations across the globe as the full economic impact from the outbreak of the coronavirus is yet to fully unfold.

“While the Fed has stepped in to do its part, spreads are likely to move wider as governments and companies take appropriate actions to control the outbreak and ‘flatten the curve,’ impairing economic growth,” noted analysts at Well Fargo Securities.

Indian central bank holds rates steady for now

Amy Kazmin in New Delhi reports:

The Reserve Bank of India said on Monday that it willing to use all policy tools at its disposal to help mitigate the hit to the Indian economy from the global coronavirus outbreak, but declined to follow other central bank to immediately cut interest rates.

Shaktikanta Das, the RBI governor, said that the RBI’s monetary policy would consider possible rate cuts in the near future. The MPC is due to meet next in early April, but Mr Das also did not rule out an out-of-cycle cut.

“We will take a clearer view of the impact of the global slowdown on the Indian economy,” Mr Das said in a press conference. “Domestic liquidity conditions remain comfortable, and it is important that policy space be used appropriately and suitably timed to have maximum impact.”

Our response will be calibrated, neither premature nor delayed,” he said. “We will make every effort to see whatever instrument, whatever policy announcements we make will have desire effect and impact.

The RBI governor’s assurances came as officials reported that the wholesale price index rose just 2.26 percent in February, down from an increase of 3.1 percent in January.

The drop in wholesale price inflation follows a softening in the consumer price index to 6.58 percent in February, down from 7.59 in January.

The RBI will also carry out rupee-dollar swap auctions on March 23, and said India’s foreign exchange reserves are sufficient for any exigency.

EU securities regulator makes investors increase disclosure of short positions

Matthew Vincent in London

Europe’s stock market regulator is making investors increase their disclosure of bets against companies shares, “to ensure the orderly functioning of EU markets, financial stability and investor protection” amid the coronavirus crisis.

On Monday morning, the European Securities and Markets Authority said it had taken a temporary decision to lower the threshold for reporting the short selling of shares on EU markets. Under the new rules, traders and investors must report their shorting if the value exceeds 0.1 per cent of the issued share capital of any company. Previously, the threshold had been 0.2 per cent of a company’s share capital.

Short-selling is the practice of borrowing shares and selling them in the market, in the expectation that their price will fall and they can be bought back more cheaply and returned – generating a profit. In times of market volatility, however, widespread short selling can exacerbate price falls.

ESMA said it lowering the reporting threshold was “a precautionary action that, under the exceptional circumstances linked to the ongoing Covid-19 pandemic, is essential for authorities to monitor developments in markets”. It stated that “current circumstances constitute a serious threat to market confidence in the EU”.

It may also consider “more stringent action if required”.

Investors must make their short selling disclosures to their own country’s regulator or “national competent authority”.

Brussels to discuss European role in hunt for vaccine

Michael Peel reports

European Commission president Ursula von der Leyen will hold talks on Monday with CureVac, the German company trying to come up with a vaccine against coronavirus, Brussels has said.

Berlin is seeking to stop the company moving its research to the US, amid fears Washington may seek a monopoly on any breakthrough in the fight against the disease.

Ms von der Leyen plans to speak to CureVac executives about how the company’s activities could be “supported in Europe”, Eric Mamer, Commission chief spokesperson, told reporters on Monday.

Transport for London’s financial woes deepen

Passenger numbers on the London Underground have fallen by nearly a fifth over the past week, deepening a financial crisis on the capital’s transport network.

Transport for London forecasts reduced income of up to £500m from the falling passenger numbers, as tourism dries up and companies urge their staff to work from home.

Ridership numbers have fallen 19 per cent on the tube over the past week compared with the same period a year ago, and there has been a 10 per cent reduction in passengers on London’s bus network.

Already facing significant budgetary issues from the delayed Crossrail project, TfL said it will be “looking to the government to provide appropriate financial support to ensure that the core transport network continues to operate safely and reliably”.

Earlier on Monday the FT reported that Sadiq Khan is seeking to renegotiate £2bn of existing loans with the government in order to borrow an extra £650m to deal with cost overruns on the delayed Crossrail line.

London’s Mayor has already dropped his flagship policy of freezing all prices on the UK capital’s public transport network.

Geneva latest Swiss canton to close bars and restaurants

Sam Jones in Zurich reports:

The canton of Geneva, home to the headquarters of the World Health Organization, has ordered bars, restaurants and cafes to be closed from 6pm on Monday.

The canton declared a state of emergency on Monday morning. It has become the seventh of Switzerland’s 26 cantons, which under the Swiss political system have significant autonomy, to do so. Others include the southerly cantons of Valais, Ticino and Graubünden, which share a mountainous border with northern Italy, the region in Europe worst-hit by the pandemic.

The federal government in Bern has held back from enforcing a nationwide ban on public social life, contrary to guidance from the WHO, which has advised governments to enact radical policies of social distancing.

On Friday Bern announced measures to restrict venues to a maximum of 50 people and closed schools across the country. Unlike neighbouring countries, however, much has been left up to individual business to decide in the enforcement of the rules.

The governing national council met again on Sunday evening to review measures in light of other European countries’ actions, but has not yet decided to take further steps.

The number of cases of the novel coronavirus in Switzerland jumped over the weekend: rising by more than 60 per cent in 24 hours to 2,200 as of Sunday afternoon. The Federal Office of Public Health will report updated figures mid-afternoon Monday.

UK postpones final meeting of first-ever climate assembly

Camilla Hodgson in London writes

The fourth and final meeting of the UK’s first ever climate assembly has been postponed due to the coronavirus pandemic, organisers said on Monday.

The final weekend of the citizens’ assembly for climate change was convened for March 20-22 to produce a series of non-binding recommendations for parliament about how to decarbonise the economy.

Participants had also been due to discuss how to remove existing greenhouse gas emissions from the atmosphere.

Organisers said it would be rearranged for a later date.

Once completed, the assembly’s report is expected to be debated in parliament and inform the government’s strategy for reaching its legally binding target of net zero emissions by 2050.

Activists have stressed it is crucial that this strategy is outlined well before November, when the UK will host the COP26 climate summit, in order for the UK to look like a credible climate leader.

London Metal Exchange says ring-dealer member has tested positive

Henry Sanderson in London reports:

The London Metal Exchange said one of its trading members had tested positive for the coronavirus, prompting a deep clean of its red-sofa trading “ring,” where the world’s metals prices are set every day.

The LME said it was informed on Sunday “that a member of staff of an LME Ring-dealing member has been diagnosed with Covid-19.”

The exchange said that open-outcry trading would continue at the ring in London and it would “facilitate this as long as desired and practicable.”

The LME said it has a contingency plan to move trading to Chelmsford if necessary and also move to electronic pricing.

The LME has one of the last open outcry trading floors in Europe, where traders still shout buy and sell orders for metals around a circular red sofa. Each metal is traded in five-minute sessions.

Spanish cases rise by more than 1,000 overnight

Daniel Dombey in Madrid reports

There are now 8,744 documented cases of coronavirus in Spain — an increase of more than 1,000 overnight.

The government said that 297 people have died so far from the outbreak and 3,215 are hospitalised, 410 of them in intensive care. So far, 521 people have recovered.

The outbreak is heavily concentrated in the Madrid area, where there have been 4,665 cases and where some 70 per cent of the people in intensive care are located.

“Health services are stressed because of the increase in cases,” said Fernando Simón, the doctor helping to coordinate the country’s response. He added that there was now a greater risk that the outbreak would extend to other regions.

Kenyan nurses strike over lack of training as coronavirus cases rise

Donald Magomere in Nairobi reports:

Nurses at a key Nairobi hospital have gone on strike, raising safety concerns, a day after President Uhuru Kenyatta announced two more cases of coronavirus in Kenya.

The move comes after health secretary Mutahi Kagwe announced that over 1,100 health workers had been trained to combat the virus. So far,120 beds have been set aside at Mbagathi Hospital for potential cases in the country.

However, nurses at Mbagathi claim they are unprepared, insisting only a few have been trained to handle the virus or suspected cases.

Iran warns against Persian new year travel

Najmeh Bozorgmehr in Tehran writes

Iran’s president Hassan Rouhani has urged people not to travel during the Persian New Year holidays to begin on Friday, warning travellers they will be monitored on roads and could be quarantined or forced to return home if they display any symptoms of coronavirus.

While many Iranians have chosen self-isolation, many others have ignored official warnings to continue their normal lives, although panic buying of foodstuffs continues in Tehran.

Iran’s health ministry announced on Monday that 853 people died of Covid-19, up from 724 on Sunday. The number of people who have tested positive rose to 14,991 from 13,938.

Dozens of politicians, clerics and members of parliament have tested positive while at least another half a dozen have died of the disease.

Volkswagen on brink of closing main German plant

Joe Miller in Frankfurt and Peter Campbell in London report

Volkswagen is suffering severe supply chain disruption that could force the carmarker to curtail production at several European plants including its Wolfsburg headquarters factory in the coming days, according to two people familiar with the company.

The German carmaker is struggling to source parts from Italy and Spain, and its emergency stockpiles of parts are beginning to run down.

The Wolfsburg plant, which makes some of the brand’s flagship products, including the Golf and the Tiguan and Touran sports utility vehicles, is currently up and running, though on-site restaurants have been closed.

Staff working on the line have been told to bring their own food, and to board internal shuttles from the back door in order to avoid infecting drivers.

“We now see a lot of challenges in the supply chain,” said a VW spokesman. “Things are getting more complicated and the situation is changing rapidly”.

We have far more suppliers for European production in Italy and Spain than in China.

Carmakers across Europe have closed some sites because of supply shortages or falling demand. Fiat on Monday announced the closure of eight sites until the end of March, while Ferrari has also closed its plants in the country. Renault, Ford and VW’s Seat brand have all shut their Spanish plants because of problems sourcing parts.

VW’s supercar brand Lamborghini has already closed production in northern Italy, while the company’s Slovakian plant is expected to close as early as Monday, the country’s prime minister said on Sunday.

German carmakers are also facing logistics issues, after the country closed many of its borders on Sunday, and Bavaria, which is home to BMW and VW’s Audi brand, declared a state of emergency.

VW confirmed that 31 out of 33 its joint-venture plants in China have now re-opened, and sales are beginning to pick up again in the country.

French drugmaker warns Europe lacks vaccine manufacturing capacity

Sanofi has warned that Europe lacks the vaccine manufacturing capacity to cope with pandemics like the coronavirus, and called for a government agency dedicated to response planning as in the US.

Paul Hudson, chief executive of the French drugmaker, told the Financial Times that the outbreak has brought the issue of national sovereignty of healthcare systems “sharply into focus”.

Read more of that interview in this article by Leila Abboud and Sarah Neville.

Ukraine’s largest cities to shut down restaurants and stores as flights cease

Roman Olearchyk in Kyiv reports

Ukraine’s largest cities announced plans to close stores, shopping malls and restaurants as the country prepared to halt passenger airline traffic.

The measures are aimed at preventing an uncontrolled spike in novel coronavirus infections that could overwhelm the country’s dilapidated healthcare system came as confirmed national cases of Covid-19 had increased from three to five with one fatality.

“Friends! Difficult times await us,” Vitaly Klitschko, the mayor of Ukraine’s capital city Kyiv said in a video address on Monday.

Stressing that grocery stores, pharmacies and gasoline stations would remain open while restaurant food delivery would be permitted, Mr Klitschko added: “We understand that these are inconveniences for the city’s residents and losses for business, but they are necessary and temporary.”

On Sunday, two of Ukraine’s largest cities – Lviv near the Polish border and the Black Sea port town of Odessa – announced similar measures.

Ukraine last week closed schools, banned large gatherings and restricted travel across front lines in the country’s far east where government forces continue into a sixth year to battle Russian-backed separatists.

The drastic measures came amid fears that much of the coronavirus cases in the country of 44m had gone unreported due to low amount of testing by authorities.

Ryanair says grounding of entire fleet ‘cannot be ruled out’

Ryanair said it is possible it will be forced to ground its entire fleet as it becomes the latest carrier today to slash capacity as international travel restrictions trigger a disintegration in flight demand.

The Irish low-cost carrier pointed to travel bans — partial or complete — in countries across Europe from Italy to Norway as it said it expected the majority of its aircraft to be grounded in the next 7 to 10 days.

It added that even in countries where the fleet was not grounded, social distancing restrictions could make flying “impractical, if not, impossible”. It expects capacity to be reduced by up to 80 per cent in April and May and said “a full grounding of the fleet cannot be ruled out”.

The statement from Ryanair mirrors similar announcements this morning from airline groups including British Airways owner IAG and Air France-KLM, which anticipate cutting capacity by up to 75 per cent and up to 90 per cent respectively. Low cost rival easyJet said the survival of European carriers cannot now be “guaranteed”.

Chief executive Michael O’Leary said:

We are doing everything we can to meet the challenge posed by the Covid-19 outbreak, which has over the last week caused extraordinary and unprecedented travel restrictions to be imposed by National Governments, in many cases with minimal or zero notice.

The group said it was implementing a raft of emergency measures to cut costs including deferring share buybacks, freezing recruitment, temporarily laying off some staff and asking others to take voluntary leave.

Czech Repubilc imposes quarantines, movement restrictions

The Czech Republic has quarantined several municipalities in the east of the country and imposed a series of new restrictions on movement as it battles to quell the spread of coronavirus, James Shotter writes.

Government officials said that people would only be able to move around for very limited activities, including going to work ,shopping and visiting relatives, until March 24.

Interior minister Jan Hamacek said:

It is not house arrest.

People can go to work, go shopping, but they should stay home whenever possible.

The local quarantines will apply to 21 municipalities including Litovel and Unicov in the east of the country, and include a total ban on citizens entering and leaving. Around 24,000 people live in the affected area.

In an effort to mitigate the impact that the strict anti-coronavirus measures would have on individuals and businesses, the finance ministry said that it would postpone the deadline for tax returns until July.

The Czech Republic, which has so far recorded 298 cases of the novel virus, has taken some of the most stringent steps in Europe to respond to the crisis.

It has declared a state of emergency, all but sealed its borders, closed schools and all non-essential shops, and imposed a ban on public gatherings of more than 30 people.

Shares in Primark owner briefly plunge, triggering ‘fat finger’ speculation

Shares of Associated British Foods, the owner of Primark, briefly lost all of their value in Monday morning trading, prompting speculation of a ‘fat finger’ error.

Shares dropped to 0.01 pence before being suspended at 9am London time. By 10.20am the stock was back trading at £16.32 per share, a drop of 12 per cent on the day.

In a trading update before market open, the company had said it could no longer provide earnings guidance for the remainder of the year after Primark stores in Italy, France, Spain and Austria were forced to close due to the coronavirus outbreak.

Source: Factset

Virus hits international university applications

More than a third of students planning to study at universities in other countries now expect to change their plans because of coronavirus, global education editor Andrew Jack writes.

Of 3,000 prospective students surveyed by higher education rankings company QS, 35 per cent said their plans had been affected.

Of this group, 54 per cent said they planned to defer their entry to next year and 14 per cent said they no longer planned to study abroad.

Students from Pakistan followed by those from Nigeria and Kenya were amongst those most likely to defer or cancel foreign study, according to the data, providing an indication of the pressure British and other universities reliant on international students will face in coming months.

Michelin shuts plants in France, Italy and Spain

David Keohane in Paris writes

French tyre maker Michelin will shut its factories in Italy, Spain and France from tomorrow “for a minimum of one week” as it too grapples with the impact of the coronavirus.

Michelin said in an emailed statement:

The Michelin group made the decision yesterday to close for a minimum of one week its industrial sites located in the countries most affected in Europe to date by the pandemic.

Depending on the development of the situation, this cessation of activity may be extended and possibly extended to the other factories of the Michelin group in Europe.

The only factory that will remain open is Michelin’s Bassens site, which the group said “provides productions essential to the continuity of the group’s activities in the world and some critical productions.”

Even before the virus hit the global economy, Europe’s car part suppliers had been cutting back production having found themselves between the rapid and costly shift towards electric vehicles, the introduction of tough emissions standards in Europe and waves of cheap imports from China.

Thailand to shut schools and universities

Thailand is to shut universities and schools, close boxing stadiums and other entertainment venues, and postpone the Thai new year’s holiday Songkran after reporting a spike in cases of coronavirus, John Reed writes.

The measures, announced by deputy prime minister Visanu Krua-ngam, are due to be proposed for approval at a weekly cabinet meeting on Tuesday.

Thailand had been slower to close schools, ban public gatherings, or limit the entry of foreign visitors than some other south-east Asian countries. The Philippines, for example, on Monday announced a “community quarantine” covering all of Luzon island.

But on Monday Thailand reported 33 new cases of COVID-19, bringing the total number confirmed in the country to 147.

Taiwan imposes international travel curbs

Taiwan on Monday introduced draconian measures to discourage its citizens’ international travel, Kathrin Hille in Taipei writes.

This came as Taiwan announced 8 new coronavirus cases, taking its total to 67 and representing its biggest daily increase in confirmed cases so far.

Those diagnosed were people who had recently traveled to Italy, Germany, Greece, the Czech Republic, the Philippines, Egypt, Spain and Turkey.

Taiwan had managed to keep the increase in infections at very low levels for weeks. But since March 10, it reported 11 new confirmed cases, all of which the health authorities assume were people who had become infected abroad.

In response, Taipei added all of eastern Europe, Central Asia and the Middle East to the area under its highest-level travel warning, under which its citizens are required to avoid all non-essential travel.

Moreover, the government said Taiwan citizens defying such a top-level travel warnings would no longer be receive the government’s compensation for time spent in precautionary quarantine upon return, would be charged for costs arising from their screening or isolation, and could even see their full names published if they tested positive after their return.

Teachers and students in primary and secondary schools will be barred from traveling abroad until the end of the term, said Chen Shih-chung, health minister.

While Taiwan delayed the return to school after Lunar New Year by two weeks when the outbreak in China was at its worst, schools are no longer closed.

A freewheeling democracy with a highly export-dependent economy, Taiwan’s public has so far readily accepted travel restrictions and quarantine regimes. Seeing their country’s low case count, some Taiwanese have become more relaxed about the risk of infection.

“We feel sorry for having to take such severe measures,” Mr Chen said. “But you have to understand that we face a global pandemic. We already warned you, so if you still insist on going, you will have to take the responsibility yourself.”

Mr Chen said the virus was currently spreading even faster than it had in the early days of the epidemic and urged his compatriots to be careful. “Containing the last wave was already very hard, but this one is coming even faster, so you really have to exercise restraint,” he said.

The Epidemic Command Centre said it had decided extend its harshest travel warning to many countries with low announced case counts because it doubted those. “Turkey until recently officially had only 5 confirmed cases – and we have now picked up the same number of infections after a tour group of just 15 people went there,” said Mr Chen. “So we doubt that in some areas, governments are either not testing, or they are testing and not announcing the accurate numbers.”

Chinese ride-hailing group launches errand service

Christian Shepherd in Beijing reports:

Chinese ride-hailing giant Didi Chuxing has launched an on-demand errand running service, as the company battles fallout from a dearth of orders during the coronavirus outbreak.

Softbank-backed Didi announced on its official social media that its drivers can now be hired to pick up groceries, buy bubble tea, deliver flowers or do a number of daily tasks in 21 major cities, including Shanghai, Hangzhou and Shenzhen.

Government mandated travel restrictions and quarantine measures dealt a blow to Didi’s daily ride-hailing business, as traffic plummeted and some cities halted public transport.

Daily active users on Didi’s app fell by half in the early days of the outbreak and some drivers in the capital Beijing said they often had to wait two hours for an order.
At the same time, orders by home-bound customers over delivery services, such as Alibaba-backed and Tencent-backed Meituan, have spiked during the outbreak.

Major airlines call for ‘extraordinary’ government support

The three global airline alliances — which together represent around 60 carriers — have come together to urge governments to provide “extraordinary support” to the industry as it flounders amid a collapse in demand.

Members of oneworld, SkyTeam and Star Alliance said they were calling on governments “to evaluate all possible means” to assist the sector as they backed a call by the industry body, the International Air Transport Association, for regulators to suspend slot usage rules for the summer.

The groups said IATA figures have already indicated revenue losses of up to $113m. This could increase by more than $20m following US restrictions on European travel, they said.

Star Alliance chief Jeffrey Goh said:

The unprecedented circumstances triggered by the coronavirus outbreak pose an existential threat not only to the airline industry but more generally to global trade and commerce, and social connectivity. As airlines stretch their limits to manage the crisis, it is equally critical for governments and stakeholders to avoid further burdens and step up with measures.

The groups also want stakeholders such as airports to make allowances, saying operators should take a look at modifying landing charges and fees “to mitigate the financial pressure faced by airlines”.

Global death toll climbs by most in one day

Steve Bernard in London reports:

The global death toll rose by the most in a single day on Sunday while Italy remains the hardest hit.

Sunday added 686 deaths, bringing the total globally to 6,518. Cases rose by 12,924 to 169,702. Italy was once again the hardest hit with an additional 3,590 cases and 368 deaths.

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What to expect from the EU’s fiscal firefight

Sam Fleming, Martin Arnold, Jim Brunsden and Michael Peel write:

Central banks have been acting aggressively to respond to the coronavirus. In the euro area, the question now is what the fiscal response will look like, and a critical video-meeting of finance ministers today will give some early insights.

Officials do not expect this to mark a singular, make-or-break moment in this crisis, but merely the initial response in a protracted attempt to rescue the euro area economy. 

What will the finance ministers announce at their eurogroup meeting? Most importantly, they will endorse a package of measures promulgated by the European Commission on Friday, including a pledge to apply maximum flexibility to the region’s budget rules. 

This will include making the most out of an “unusual events” clause that allows countries to temporarily abandon attempts to meet debt and deficit reduction targets.

A more aggressive escape clause from the budget rules, which would apply across the euro area, will be kept in ministers’ back pocket for the time being. 

Ministers will also be seeking to wield an impressive aggregate figure encapsulating the financial firepower that governments have committed to the cause of shoring up their economies. Calculating this has not been straightforward. 

The ECB has been tracking government announcements and using an ultra-conservative method: one that excludes any measures that cannot be quantified or that will be recouped later like deferred tax payments. It estimates that the 19 eurozone members have made €39.04bn of virus-related spending commitments.

Equalling only 0.33 per cent of eurozone GDP, that amount pales in comparison with the €200bn spending programme coordinated by Brussels and EU member states after the 2008 financial crisis, which was worth 1.5 per of GDP. 

But the number almost certainly understates just how large the commitments from member states have been — and will likely be dwarfed by any figure the euro area manages to stitch together later today.

Read more on this story in today’s Brussel’s Briefing

Turkey to close bars and nightclubs

Laura Pitel in Ankara reports:

Turkey announced that bars and nightclubs will be closed from today as the number of confirmed coronavirus cases in the country rose to 18.

Ankara has taken steps aimed at preventing an outbreak of the virus, including halting flights from affected countries, closing schools and universities, and asking those returning from foreign travel to self-quarantine for 14 days.

Even amid those measures, the number of confirmed cases of Covid-19 has increased rapidly since the first instance was detected on Tuesday last week. Fahrettin Koca, the health minister, said late on Sunday that 12 new cases had been diagnosed, bringing the total to 18.

The decision to close bars has proved controversial in Turkey, a Muslim-majority country that has long suffered tensions between those who espouse a more secular lifestyle — including drinking alcohol — and those who believe in more conservative values.

Social media users asked why the government was closing venues serving alcohol but not cafes, restaurants or mosques.

Leaked UK warning that 8m may need hospitalisation

Sarah Neville and George Parker in London report:

Four out of five Britons are expected to become infected with the coronavirus and almost 8m may need to be taken into hospital in a “reasonable” worst-case scenario, according to a leaked document from Public Health England which provides the bleakest assessment so far of the course of the outbreak.

The assessment comes as prime minister Boris Johnson announced the start of daily press conferences to inform the public on measures to fight the coronavirus, amid criticism of the government’s communications strategy.

You can read more on the UK response here.

New Delhi closes gyms, theatres and cancels markets

Amy Kazmin in New Delhi reports:

India’s capital city, New Delhi, on Monday broadened restrictions on commercial activities and social gatherings until March 31, as it seeks to prevent the spread of coronavirus.

The government has ordered the closure of all gyms, nightclubs, theatres, and weekly bazaars, widening the scope of closures ordered last week, when all schools and cinemas were ordered to shut until the end of the month.

The local administration has also ordered that attendance at any social, religious, or family gathering be restricted to just 50 people, with the exception of marriage functions, which will be allowed to be bigger.

Concern is growing about the potential spread of the virus though large scale religious gatherings, including at popular Hindu temples, which Indian authorities have been reluctant to shut down.

The Delhi government’s edict is the first to specifically cap crowds at religious gatherings.

New Delhi has just 7 confirmed cases of the coronavirus, two of whom have recovered, and been discharged from hospital, and one of whom, an elderly lady with other underlying health problems, has died.

But there are additional cases in Delhi’s periphery, including its satellite city Gurgaon, and suburbs in the neighbouring state of Uttar Pradesh.

India has a total of 110 confirmed coronavirus cases, scattered across the country.

Travel stocks set for historic fall

Plummeting airline stocks are driving Europe’s travel shares towards their worst ever day of trading.

The Stoxx travel and leisure index was recently off 15 per cent, which if sustained to the close, will mark its worst ever one-day drop.

Airline stocks have tumbled in a volatile first hour of European trade after a slate of drastic capacity reduction announcements and question marks over the future of the industry in the continent.

BA-parent IAG was down more than 30 per cent at one point, while Air France KLM fell as much as 20 per cent after both groups slashed capacity for the coming months as demand for flights dries up. Both subsequently paired some of those losses but remain sharply lower.

Low cost carrier Easyjet was still heading for its worst ever day, with shares down 30 percent, after it warned there was “no guarantee” carriers would survive “what could be a long-term travel freeze and the risks of a slow recovery”. Rival Ryanair was off 22 per cent.

Oil approaches four-year low as demand hit

David Sheppard in London reports:

Oil prices tumbled on Monday with the US benchmark approaching a four-year low as the coronavirus spread starts to hammers demand in Europe and North America.

US benchmark West Texas Intermediate hit a low of $29.75 a barrel, down about 5 per cent and dipping below $30 for the first time since a sell-off on March 9. It was recently trading at $30.14 a barrel.

Brent crude, the international market benchmark, fell almost 7 per cent to $31.48 a barrel, with its premium over WTI shrinking to the lowest level in years.

The oil market has been knocked by the combined impact of coronavirus to demand, while Saudi Arabia and Russia have started a price war after falling out over how oil producers’ should respond. Oil traded near $70 a barrel in early January.

Prices last traded below $30 a barrel in 2016, when WTI bottomed around $28 a barrel. But traders warn a significant hit to demand, possibly of 10 per cent of global consumption or more, could be seen in coming weeks as more cities shut down.

Shares in the largest energy and natural resource companies were some of the largest fallers in London as the FTSE 100 shed 5 per cent.

At the open:
– Royal Dutch Shell down 8%
– BP down 6%
– Glencore down 7%
– Centrica down 7%
– Premier oil down 15%
– Tullow down 13%

Germany advises citizens to avoid travel abroad

Guy Chazan in Berlin reports:

The German government has advised citizens not to travel abroad, amid intensifying restrictions on movement imposed by Germany and its neighbours to curb the spread of coronavirus.

Travellers should expect “increasingly drastic restrictions on air transport and other travel, quarantine measures and curbs on public life in many countries”, an update on the foreign ministry website said.

“The risk that you will no longer be able to return home due to the increasing restrictions is currently high in many destinations,” the ministry said.

It said changes to immigration regulations and quarantine measures were often being introduced without notice and with immediate effect. “Many travellers have been affected in several countries and prevented from returning or continuing their journey,” it said.

Previously the foreign ministry had only advised against travel to countries particularly affected by the coronavirus outbreak, such as Italy or Iran. It also issued a travel warning for the Chinese region of Hubei, where the virus was first detected.

In the past few days, more and more countries have been closing their borders to travellers from Germany, including Denmark, Poland and the Czech Republic. In other countries, such as Israel, Australia, Russia and China, those travelling from Germany must enter quarantine for 14 days.

Germany imposed strict controls on its borders with five neighbours on Monday morning.

European stocks fall further

European stocks deepened their declines in the first hour of trading, as bourses tumbled on escalating fears of a significant recession as many countries across the region enter lockdown.

Among the major market headlines:

• London’s FTSE 100 was down nearly 8 per cent, Germany’s Dax slipped 7.5 per cent and in France the Cac 40 shed nearly 10 per cent of its value.

• Travel and leisure stocks were pummelled. The Stoxx index tracking the sector was recently down 15 per cent as airlines felt the brunt of selling pressure. British Airways owner IAG fell more than 25 per cent.

• Investors moved into typical haven assets, as government bonds, the Japanese yen and Swiss franc all rallied.

UK government to hold talks with airlines over possible state support

Jim Pickard, chief political correspondent, reports

The British government will hold talks this week with the aviation industry amid calls for a concerted state intervention to bail out airlines stricken by the onset of the coronavirus pandemic.

Grant Shapps, transport secretary, said he would meet executives this week to discuss their varied calls for government intervention to rescue the beleaguered industry.

The chairman of Virgin Group has urged the government to provide up to £7.5bn of emergency state support to rescue the UK aviation industry, which has been decimated by the coronavirus pandemic.

Peter Norris was set to send a letter early this week to the prime minister, chancellor and transport secretary warning them that the entire aviation sector — airlines and airport operators — faces pressing financing issues, according to an industry source.

Mr Shapps said there would be an “aviation summit” this week for him to take the “collective response” of the airlines. A government economic committee led by chancellor Rishi Sunak will meanwhile consider what measures could or should be taken.

“There are very many ways we can help,” he told the BBC Radio 4 Today programme. “There are a variety of different asks coming through which is why I’m meeting the airlines this week. But they are clearly at the forefront of this because global travel has come close to a halt in many areas.”

Sweden offers businesses $31bn to cushion virus blow

Richard Milne, Nordic and Baltic Correspondent, reports:

Sweden is offering its businesses more than SKr300bn ($31bn) in support in a bid to minimise the fallout to both companies and workers from the deadly coronavirus pandemic.

The centre-left government in Stockholm announced on Monday morning that it would cover almost half of workers’ salaries if they are temporarily laid off, with companies paying half, ensuring employees receive more than 90 per cent of their pay. The state will also take over sick leave payments and allow companies to defer taxes.

The moves came after Denmark presented plans on Sunday night for the state to cover three-quarters of the salaries of laid-off workers with companies paying the rest, and employees giving up five days of holiday.

Tui to suspend holidays and cruises to help mitigate Covid-19 effects

Alice Hancock in London reports:

Tui, the world’s largest tour operator, announced late on Sunday night that it would suspend all of its package holiday, hotel and cruise operations temporarily in order to help “global governmental efforts to mitigate the effects of the spread of the Covid-19”, it said.

Shares in the German package holiday group fell 35 per cent in early Frankfurt trading. They have fallen nearly 78 per cent since February 11.

The Tui board withdrew the company’s earnings guidance for the year and said that they had decided to apply for state aid guarantees in order to see the company through the crisis.

Tui employs 70,000 people worldwide and serves 21m European customers. It also has 18 cruise ships.

Last week, Tui started freezing pre-payments due to hoteliers for summer bookings as it sought to shore up its cash position. It has stopped hiring and is encouraging some employees to take unpaid leave.

In its statement on Sunday, Tui said it had available loan facilities of around €1.4bn. “We are taking substantial cost measures to mitigate the earnings effect,” it said.

Airline stocks pummelled as capacity slashed

Airline stocks have been hit heavily in early European trade after a raft of capacity reduction announcements as the impact from the coronavirus outbreak tightens its grip.

Shares in BA parent IAG fell more than 20 per cent after it said this morning it would cut capacity by 75 per cent over the next two months. Air France-KLM, which said capacity would be reduced by up to 90 per cent over the coming days, saw an 18 per cent share price dip.

Low-cost carrier easyJet, which this morning warned of an existential risk to the survival of European airlines, experienced a 26 per cent share price dip. Germany’s Lufthansa was down 11 per cent.

Demand for flights has plummeted over recent weeks, triggering capacity cuts across the board by airlines, as countries increasingly restrict entry in an effort to stem the spread of Covid-19.

UK Labour MP Kate Osborne tests positive for Covid-19

Laura Hughes in London reports:

The Labour MP Kate Osborne has been diagnosed with coronavirus, raising pressure on authorities to tighten access to parliament.

She is the second MP to test positive for Covid-19, after UK junior health minister Nadine Dorries was diagnosed with the virus last week.

On Friday, the House of Commons announced that parliament would limit visitor access this week and introduce overseas travel restrictions “in order to preserve the operation of parliament”.

In a statement posted on Twitter, Ms Osborne said: “I have been diagnosed with coronavirus (#covidー19uk) following a period of self isolation and subsequent testing.”

I will continue to self isolate until I have fought off the illness, but in the meantime I would encourage everyone to band together and support the most vulnerable in our communities.

EmoticonEuropean markets dive at the open

European stocks tumbled, as massive central bank intervention failed to staunch the wave of volatility that has swept across global markets.

The FTSE 100 slid 4.7 per cent at the open, falling to its lowest level since November 2011 and taking losses this year for the London blue-chip index to more than 30 per cent. The sell-off was widespread across Europe: Germany’s Dax and France’s Cac 40 were 4.6 per cent lower.

The Stoxx Europe 600 index, which tracks the region’s largest companies, fell nearly 5 per cent to its lowest since summer 2013.

The Federal Reserve cut US interest rates before financial markets opened on Sunday and joined forces with other central banks in a bid to prevent a severe economic downturn caused by the coronavirus pandemic.

Despite the central bank action, which is without parallel since the financial crisis, S&P 500 index futures fell as much as 5 per cent, triggering exchange circuit breakers.

Philippines extends lockdown to cover most populous island

John Reed in Bangkok reports:

The Philippines has extended a lockdown of greater Manila imposed on Sunday to cover all of Luzon island, the country’s most populous, where 48m people live.

President Rodrigo Duterte’s spokesman Salvador Panelo announced the move in a message to reporters on Monday.

Mr Duterte has “announced an enhanced community quarantine in the entire Luzon”, Mr Panelo said, adding that details of the measures would follow.

On Sunday metro Manila, one of south-east Asia’s largest urban areas (population 12m), was put under community quarantine, with flights, land, and sea travel to and from the capital region suspended until April 14.

The Philippines has confirmed 140 cases of Covid-19 and 12 deaths.

Macron, Merkel and EU leaders to discuss coronavirus border closures

Victor Mallet in Paris reports

French President Emmanuel Macron will have a conference call with European leaders on Monday at 10am local time to discuss the coronavirus crisis, especially the issue of border closures unilaterally imposed by countries such as Germany.

The Elysée presidential palace said Mr Macron would speak to German Chancellor Angela Merkel as well as Charles Michel, head of the EU Council, and Ursula von der Leyen, who leads the European Commission.

France has closed schools, cafés and restaurants and urged its citizens to limit their movements to slow the spread of the pandemic, but it has argued that closing borders is pointless and privately criticised EU member states for doing so without consultation.

DIY group Kingfisher closes stores in Spain and France

Jonathan Eley in London reports:

Kingfisher, the DIY conglomerate, said all its stores in Spain and France had closed and that it was taking “immediate and significant” action to reduce costs. However it said it could not yet predict the financial impact for the current financial year.

The 221 French stores, trading under the Castorama and Brico Depot brands, will remain closed until April 14, and the 28 Spanish outlets, which the company is trying to sell, until March 29.

France accounts for around 36 per cent of Kingfisher’s revenue. About 1,100 stores in the UK, Ireland, Poland, Romania, Portugal and Russia remain open.

“We are committed to supporting local authorities and governments to limit the spread of the virus, and the health and safety of our colleagues and customers remains our top priority,” said chief executive Thierry Garnier. “Our teams are also evaluating the best ways to satisfy emergency needs in our markets, particularly for electricity, heating and plumbing.”

Kingfisher said it is reducing operating expenditures, reducing stock and goods not for resale (GNFR) purchases, taking actions to optimise working capital, stopping all but essential capital expenditure, and making use of tax payment and other government relief measures.

It pointed out that it has just over £1bn in total available liquidity and £136m of financial debt, which does not include its lease liabilities.

The group is due to report results for the year to end January on March 24.

It said that up to March 14 it had experienced no impact on demand as a result of the spread of coronavirus, with group same-store sales up 2.3 per cent after adjusting for the impact of the leap year.

Fiat to shut most European car plants temporarily

Peter Campbell in London reports:

Fiat is temporarily shutting most of its European car plants after the coronavirus outbreak led to a collapse in demand.

The carmaker will close six sites in Italy, one in Poland and one in Serbia until March 27.

The move “enables the group to effectively respond to the interruption in market demand by ensuring the optimisation of supply”, the company said on Monday.

Fiat closed four Italian factories last week for deep cleaning and to prepare for production using fewer staff, in order to keep its workers more than one metre apart. It had planned to re-open the facilities on Monday.

However car sales, particularly in its Italian homeland, have fallen sharply. Italian car sales dropped by 9 per cent in February, but the country has been all-but locked down during March as the outbreak spread, with people banned from leaving home except for essential work or to buy food.

The shutdown allows “the group to be ready to commence production promptly once market conditions allow”, Fiat said on Monday.

Several carmakers have closed facilities temporarily in Europe, for a number of reasons stemming from coronavirus.

In Spain, Ford, Renault and Volkswagen have all closed sites because of supply issues, while Ferrari in Italy also closed its plant for two weeks, citing supply issues.

On Sunday, Slovakia’s prime minister said it was likely that VW’s plant in the country will also close in the coming days.

Many European shares still not open

Dozens of European stocks have not opened five minutes after the typical opening of trade, in a sign of the volatility that has hit the region’s markets.

The composite Stoxx 600 was down 4.8 per cent in recent trade, but futures had signalled falls of closer to 6 per cent.

South Korea cuts rates to new record low

Edward White in Seoul reports:

South Korea’s central bank has cut interest rates to a record low after an emergency meeting on Monday in an urgent bid to shore up the country’s economy against fallout from the coronavirus pandemic.

The Bank of Korea cut the country’s benchmark lending rate to 0.75 per cent, from 1.25 per cent previously.

The BoK’s move came after the US Federal Reserve cut interest rates to zero as it tries to head off a global economic downturn.

South Korea’s economy has been hit hard by the virus with widespread disruption to its export industries, including technology and car manufacturers, as well as slumping consumer demand.

In response, Seoul has announced a nearly $10bn boost to an already-record high stimulus and Moon Jae-in, the president, has signalled that more unprecedented action will be needed by the government.

Earlier on Monday, the Korea Centers for Disease Control reported 74 new cases nationwide, a three-week low, down from a peak of 909 cases reported on February 29.

The total case number in the country of 51m is now 8,236, while 75 people have died from the virus, reflecting a mortality rate of below 1 per cent. Monday’s report marked the lowest number of new cases since 74 were reported on February 21 – the number of daily cured patients has also been outpacing new infections in recent days.

Officials have, however, continued to warn the public over the potential for new clusters to emerge following incidents at a call centre and a church over the past week.

Rio Tinto slows expansion of mine in Gobi desert

Neil Hume in London reports:

Rio Tinto has slowed work on the underground expansion of its copper mine in Mongolia’s Gobi desert, raising the prospect of further delays at its most important project.

The Anglo-Australian miner said the movement of goods and people in Mongolia and across its border with China had become more difficult after the first case of the coronavirus was recorded in the country and the government took action to limit its spread.

As a result work on a multibillion underground expansion of the Oyu Tolgoi copper mine has been slowed, Rio said.

“There is restricted access for teams from Rio Tinto, Oyu Tolgoi and our construction partners to oversee development and provide specialist technical services,” the company said in a statement. “The availability of specialist service providers at the site is essential to safely continue work on technical activities such as the headframe commissioning of Shafts 3 and 4.”

Rio said operations in the open pit at Oyu Tolgoi continued to operate as normal and deliver copper to customers in China.

The underground expansion of Oyu Tolgoi is Rio’s most important growth project and will increase its production of copper, at a time when the shift to renewable energy is driving growing demand for the metal for use in electric vehicles and wind turbines.

China reopens schools in Xinjiang and Guizhou

Christian Shepherd in Beijing reports:

China has reopened schools for some students in the southwestern province of Guizhou and the northwestern region of Xinjiang, in a sign of the government pushing for a return to normal after the coronavirus outbreak put classes on hold for two months.

In both regions, lessons have resumed for students in grades 9 and 12 who are set to take exams this year, Chinese state media said. The older students are returning to prepare for the country’s nationwide university entrance exam.

The sparsely populated province of Qinghai became the first in China to reopen schools last week, when it began allowing students to return to 144 institutions approved by the authorities.

All three provinces had a small number of confirmed cases compared to the rest of the country. Major cities including Beijing and Shanghai have yet to set a firm start date for classes.

Despite schools continuing to teach via online classes, parents across China have raised concerns that the lack of in-person teaching could hamper prospects for children set to take exams this year.

Human rights activists also fear that insufficient care for virus patients has been provided in Xinjiang, where a Communist party security campaign has detained over a million Turkic Uighurs and other Muslim minorities, often leaving children separated from parents in boarding schools.

Germany’s Hypo-Vereinsbank closing a third of its branches

Olaf Storbeck in Frankfurt reports

Germany’s Hypo-Vereinsbank is closing down one in three branches as the Munich-based lender cuts down on giving personal advice to its clients in reaction to the coronavirus pandemic in Germany.

In a statement issued on Monday morning, the UniCredit-owned bank said it would ensure that clients will continue to have access to banking advice – either through the phone or in larger branches with high footfall. The lender also said it will install transparent partition walls to physically separate employees and customers “where necessary”.

By Tuesday, 101 of its 337 branches in Germany will be temporarily shut on a rolling weekly schedule. The branches that will close this week are going to re-open in seven days, with 101 others temporarily shutting.

Primark owner ABF pulls earnings guidance after store closures

Jonathan Eley in London reports:

Associated British Foods said it could no longer provide earnings guidance for the remainder of the year after Primark stores in Italy, France, Spain and Austria were forced to close due to the coronavirus outbreak.

The stores account for a fifth of its selling space and 30 per cent of its annual sales, and would normally have generated around £190m in sales over the coming four weeks.

“The remainder of the estate, including the UK…has seen like-for-like sales declines over the last two weeks and these have accelerated over the past few days as a result of reduced footfall,” it added. “We are managing the business appropriately but do not expect to significantly mitigate the effect of the contribution lost from these sales”.

The UK, with almost 190 stores, generates 41 per cent of Primark’s sales.

However, it added that there had been no material impact in its sugar, grocery, ingredients and agriculture businesses and that the threat of supply disruption from coronavirus in China had receded.

First-half profits – the group reports on April 21 – would be ahead of forecasts due to better margins in grocery and at Primark, it added.

Flutter estimates ‘material impact’ on sales and earnings

Flutter Entertainment said the cancellation or postponement of sports and fixtures worldwide, which last year generated about 78 per cent of sales through bets, will have a “material impact” on its revenue and earnings.

The owner of Paddy Power estimates that if it has to close its UK and Irish shops and horse-racing fixtures are cancelled in the UK, Ireland and Australia, earnings before interest, taxes, depreciation, and amortisation will be “incrementally” reduced by about £30m a month.

Where restrictions are in place until the end of August, including the summer’s European football championship, but the shops remain open and horse fixtures go ahead, ebitda for the group will be about £90m-£110m lower.

“Quantifying the precise earnings impact on the group is difficult at this point as we do not have visibility on the duration of restrictions on sporting events,” Monday’s statement said.

Before the cancellations were announced, trading in the quarter was ahead of the group’s expectations, the statement said.

Peter Jackson, chief executive, said:

The challenge currently facing our business and the industry more widely is unprecedented in modern times.

While our near-term profitability will be impacted by the essential measures being taken globally, the board will remain focused on protecting shareholder value and managing the business through these turbulent times.

Air France-KLM slashes capacity as it scrambles to cut costs

David Keohane in Paris reports

Air France-KLM is ratcheting up its efforts to save costs in the face of the damage being wrought on the airline sector by the spreading coronavirus and as governments prepare to rush to help the sector.

The group said it had identified additional cost saving measures that would save €200m in 2020, and was cutting back its capital expenditure by €350m. The plunge in demand means Air France will ground its entire Airbus 380 fleet and KLM its entire Boeing 747 fleet.

It said it would be reducing capacity — in term of available seat kilometers — by 70 to 90 per cent in the coming days, mirroring a similar move by rival IAG, which said capacity would be slashed by three quarters in the next two months.

The airline is meeting with employee unions Monday morning to discuss significantly cutting back working hours, according to people familiar with the matter.

However, said Air France-KLM in a statement:

In spite of the measures taken, the deterioration of the environment linked to the epidemic and the sharp reduction in its activity that has resulted today lead the group to forecast a sharply deteriorated financial trajectory compared to the outlook presented at the publication of its annual results.

The airline “estimates that the drop in revenues from the passenger business resulting from the reduction in capacity will only be offset by around 50 per cent by the drop in variable costs before cost savings measures.”

It share price has fallen 50 per cent over the past month.

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Last week, Air France-KLM chief executive Ben Smith said in a video to staff that the company faced an “unprecedented situation”. Air France and KLM both also drew down revolving credit facilities of €1.8bn and the group says it now has more than €6bn in cash and cash equivalents.

The French government is also preparing to come to the aid of Air-France KLM, which is 14.3 per cent state owned, with state loans rather than an increased shareholding currently the preferred option.

However, those same officials have stressed that a capital injection remains on the table if the situation worsens.

In this extremely difficult context, the Air France-KLM Group has welcomed the statements made by the French and Dutch governments, which have each indicated that they were studying all possible means to support the group.

Hong Kong to charge for quarantine stays

Hong Kong has said it will start to charge people staying in quarantine provided by the government as facilities fill up with arrivals.

The announcement came on the same day that Cathay Pacific said it was reinstating flights from London amid demand from residents and students to return to the city.

The government will charge HK$200 ($26) a day for meals and accommodation starting from Tuesday. Arrivals have the option to pick home quarantine or stay in an official facility. There are now 700 people in the facilities, taking them to near capacity. The government said some people were abusing the system by travelling back and forth to mainland China.

Cathay Pacific announced it had reinstated a further three flights from London to Hong Kong this week, taking the total number of reinstated flights for the week to nine. The airline had slashed schedules amid a slump in demand, but it said Hong Kong students and residents were “eager to come home as soon as possible”.

The government has required people arriving from mainland China to quarantine for 14 days since February 8. The restrictions were expanded to arrivals who had visited dozens of European countries, South Korea, Iran and parts of Japan in the past 14 days to undergo quarantine for two weeks. Those arriving from the UK, US, Ireland and Egypt will also be subject to quarantine requirements from Wednesday.

The number of coronavirus cases in Hong Kong has remained low, but the number of imported cases has ticked higher in recent days. Six of the seven new cases reported on Sunday had travelled overseas during the incubation period. The city now has a total of 148 cases.

IAG’s Willie Walsh delays retirement as airline group slashes capacity

The chief executive of the parent of British Airways is postponing his retirement while low-cost rival easyJet has said “there is no guarantee” European airlines will survive the coronavirus outbreak, which has sent flight demand plummeting.

IAG — which owns BA and and Spain’s Iberia — said on Monday that its capacity would be down 75 per cent over the next two months, having dropped 7.5 per cent in the first quarter, after it suspended flights to China and Italy and cut capacity to Asia and governments from the US to India restricted entry.

Willie Walsh, the group’s outgoing chief executive, who was set to retire this month, will stay on in the role so that his successor, Iberia boss Luis Galego, can “lead the response in Spain” which has been one of the worst hit European countries.

Mr Walsh said there had been a “substantial decline in bookings” across the group’s airlines and expects weak demand “well into the summer”.

We are therefore making significant reductions to our flying schedules. We will continue to monitor demand levels and we have the flexibility to make further cuts if necessary.

The IAG announcement came as rival easyJet said it was “taking every action to remove cost and non-critical expenditure from the business”.

In particularly stark comments, the low cost carrier said:

European aviation faces a precarious future and there is no guarantee that the European airlines, along with all the benefits it brings for people, the economy and business, will survive what could be a long-term travel freeze and the risks of a slow recovery.

It said the industry’s survival in the continent would “depend significantly on European airlines maintaining access to liquidity, including that enabled by governments across Europe”.

European stock markets set for major falls

European and US stock markets were set to tumble, even after the Federal Reserve joined forces with other global central banks to unveil a sweeping package of measures not seen since the financial crisis in a bid to stop a severe economic downturn.

London’s FTSE 100 was set to fall as much as 6 per cent when it opens for trading in less than an hour, while futures also pointed to significant declines for Germany’s Dax and France’s Cac 40.

S&P 500 index futures fell as much as 5 per cent, triggering exchange circuit breakers and tipping steep falls when Wall Street begins trading later in the day.

Global stock markets have been on a tumultuous ride over the past three weeks, as traders struggle to price the looming economic disruption stemming from the outbreak of the virus.

“We think the global economy screeching to a halt is more worrying than the Fed is comforting,” said Jim Reid, a strategist at Deutsche Bank.

Finnair slashes capacity in ‘biggest crisis in history of aviation’

Richard Milne, Nordic and Baltic correspondent, writes:

Finnair is cutting 90 per cent of its capacity and its dividend amid what the Finnish flag carrier described as the “biggest crisis in the history of aviation” thanks to the coronavirus outbreak.

The Finnish airline warned of a substantial financial loss this year and was working urgently on a funding plan including credit lines, loans, and the sale and leaseback of aircraft.

Finland’s government, which owns more than half of the shares, “will actively support” Finnair, the airline said.

Topi Manner, Finnair’s chief executive, added:

It is now clear that the coronavirus is by far the biggest crisis in the history of aviation. The substantial deterioration of our financial outlook is fully attributable to the coronavirus. At the same time, it has nothing to do with Finnair’s underlying competitiveness, which remains intact.

Europe: what you might have missed

The Bank of Japan became the first G7 nation to act following the US Fed’s unexpected weekend interest rate cut with a massive increase in purchases of equities and other assets to counter the economic blow from the coronavirus outbreak.

Asian stocks and US futures dropped on Monday despite aggressive measures from the Federal Reserve, including cutting rates to near zero for the first time since the global financial crisis.

Australia’s share market was particularly badly hit, diving 10 per cent in its worst day since 1987. The fall came even as regulators ordered high frequency traders to cut the volume of trades by up to a quarter in a bid to reduce the strain on the exchange.

Hotels on the famed Las Vegas strip have begun closing their doors as the coronavirus spreads in the US. New measures were unveiled elsewhere in the country: bars and restaurants in New York and Los Angeles were restricted to take-out only and public venues, such as cinemas, were closed.

China reported 12 imported cases of the coronavirus to the end of Sunday, out of 16 cases reported across the mainland. There have now been 123 imported cases. The overall number of cases rose to 80,860.

Russia closes border with Belarus to limit spread of coronavirus

Henry Foy reports from Moscow

Russia has closed its border with Belarus in a bid to protect itself from coronavirus, preventing the movement of people across one of its busiest frontiers.

Belarus is Russia’s closest ally and millions of citizens from each country hold residency permits for the other, with practically frictionless movement across the border.

“We also decided to close the border with Belarus to people, alongside a number of other proactive steps,” said Mikhail Mishustin, Russia’s prime minister.

“We will continue to do everything to protect our country from this new threat, act in advance, take comprehensive measures so as not to allow, first of all, the massive spread of coronavirus,” he said, in remarks reported by state-owned newswires.

Russia said on Sunday it had recorded 63 cases of coronavirus. Belarus has 27, it said on Friday.

India’s SBI Cards slides on debut as coronavirus rattles markets

Benjamin Parkin reports from Mumbai

One of India’s largest listings in years had a difficult start as the global shock of coronavirus batters Indian equity markets.

SBI Cards, the credit-card arm of India’s largest public-sector lender the State Bank of India, opened at Rs658 per share on Monday, down almost 13 per cent from its issue price. Shares eventually pared losses to trade 3 per cent lower.

The IPO attracted strong investor demand and was over 20 times subscribed when the company took orders earlier this month, aiming to raise Rs103.5bn ($1.4bn). Analysts said SBI Cards, India’s second-largest credit provider in a country with low card penetration, offered an enticing opportunity to tap a fast-growing market for financial tools.

But Indian stocks have suffered in the days since as foreign investors moved their money out of the country, concerned that India’s already weakened financial system was vulnerable to the economic disruption of the COVID-19 virus. Overseas investors have pulled $4bn out of Indian equities since late February.

That has contributed to pressure on the rupee, which fell to a record low last week, and the benchmark Sensex index down around 20 per cent over the past month.

Asian stocks and US futures drop despite Fed move

Hudson Lockett reports from Hong Kong

Asian stocks and US futures dropped on Monday despite aggressive measures from the Federal Reserve including cutting rates to near zero for the first time since the global financial crisis.

In Asia-Pacific markets, Australia’s S&P/ASX 200 index dropped 7.4 per cent while Hong Kong’s Hang Seng fell 2.2 per cent and China’s CSI 300 shed 1.4 per cent.

Futures markets pointed to a 4.8 per cent decline in the benchmark S&P 500 index when it starts trading later in the day and at one point were limit down, suggesting a 5 per cent fall. The 10-year US Treasury yield fell 28 basis points to 0.6774 per cent.

Japan’s benchmark Topix was up 0.6 per cent after the central bank announced it would hold an emergency policy meeting. The Japanese yen, a haven during times of uncertainty, rose 0.8 per cent to ¥107.06 per dollar.

On Monday, China’s central bank injected about Rmb100bn ($14.3bn) of liquidity into financial markets via its medium-term lending facility. But traders said it was unlikely to immediately cut its benchmark lending rate as this may not help the real economy, where supply chains and other industries have been hit by coronavirus.

“Over the next month or even quarters there is going to be easing of both monetary and fiscal policy, but I don’t think they want to do it now,” said a trader at one Shanghai-based brokerage.

Following the Fed’s move, New Zealand’s central bank cut interest rates by 0.75 percentage points to 0.25 per cent.

India widens coronavirus testing to check for community spread

By Amy Kazmin in New Delhi

India is widening the scope of its coronavirus testing, as it seeks to determine whether community transmission of the deadly pathogen has begun in the country.

India has so far confirmed 110 coronavirus cases, nearly all of them in patients that have returned from trips abroad to hard-hit countries, or their own direct contacts.

But analysts have been warning that India’s testing protocols of only testing those returned from virus-hit countries, or their immediate contacts, may be masking the true extent of the spread of the disease, particularly the possibility of community spread.

Now, the Indian Council of Medical Research, the government’s top medical and public health organisation, will test 500 random samples a week from patients showing flu symptoms, who do not have links to any known coronavirus patients.

The results from this batch of tests — which will be examined today — will help determine whether India has seen any community spread of the disease, and will be used to guide further testing protocols, and public policy to contain the virus, officials said.

India has already mandated the shutdown of many public and commercial activities, and imposed strict travel restrictions to try to prevent the spread of the virus.


Bank of Japan unveils massive increase in asset purchases

Leo Lewis reports from Tokyo

The Bank of Japan became the first G7 nation to act following the US Fed’s unexpected weekend interest rate cut with a massive increase in purchases of equities and other assets to counter the economic blow from the coronavirus outbreak.

In an easing move that echoed the shock-value of the Fed’s decision, the BoJ’s measures also appeared to be designed to far exceed market expectations.

The BoJ, which unlike the Fed did not cut interest rates, said that it would increase its annual purchasing pace of exchange traded funds (ETFs) from the previous level of ¥6tn ($56bn) per year to ¥12tn. The market had expected an increase of just ¥3tn.

In a statement, the central bank said that: “The bank will take these measures with a view to doing its utmost to ensure smooth corporate financing and maintaining stability in financial market, thereby preventing firms’ and households’ sentiment from deteriorating.”

To help companies cope with the pandemic, BOJ said it would also set up a new one-year facility that will offer loans against corporate debt as collateral at an interest rate of zero per cent. It also increased its purchase of commercial paper and corporate bonds by ¥2tn.

Saudi Arabia closes public spaces to stem spread of coronavirus

Simeon Kerr reports from Dubai

Saudi Arabia has closed public spaces and suspended most government operations as coronavirus cases rise.

The state news agency said that the pause on all government services, except for health, security and remote education, would last for 16 days from Monday.

The move to restrict movement came with a ruling to close malls, parks, beaches, restaurants and coffee shops. Supermarkets, home delivery and pharmacies are exempted.

The private sector was also told to quarantine expatriate workers arriving in Saudi Arabia at home for two weeks, as well as existing workers with respiratory symptoms.

The kingdom reported 15 new cases on Sunday, bringing the total to 118.

Los Angeles to close down public venues to halt spread of virus

Eric Garcetti, the mayor of Los Angeles, announced that the city was closing down cinemas and other public venues in a bid to halt the spread of the virus.

Bars and restaurants will be able to sell food for take-out only, while gyms, cinemas and other entertainment venues will be closed, Mr Garcetti said in a tweet late on Sunday.

The announcement advances on similar statewide measures. Earlier on Sunday, Gavin Newsom, the governor of California, ordered all bars and nightclubs in the state to close, as well as the home isolation of the over 65s.

White House knocks down rumours of domestic travel ban

Demetri Sevastopulo reports from Washington

With large swathes of the US economy shut down, the Trump administration is having to push back against rumours that the White House is about to ban domestic travel.

Just before midnight on Sunday, the White House National Security Council, which has been loathe to comment on the coronavirus crisis publicly, tweeted that the rumours of an impending national quarantine were “FAKE”.

The move comes on the heels of the ban on travel from Europe to the US, which came into force at midnight on Friday, and draconian measures taken in Italy and Spain to constrain the spread of the virus.

“Text message rumors of a national #quarantine are FAKE. There is no national lockdown. @CDCgov has and will continue to post the latest guidance on #COVID19. #coronavirus,” the NSC tweeted.

The tweet came as the number of cases of infected people rose to 3,774, and members of the White House coronavirus task force warned that those numbers would spike as more people started to get tested for the virus.

The growing sense of alarm over what Donald Trump once described as a “hoax” comes as schools across the country close, companies urge workers to telecommute, and cities such as New York order the closure of bars and restaurants.

United Airlines warns of ‘painful’ cuts to payroll

By Andrew Edgecliffe-Johnson

United Airlines is planning to slash its capacity for April and May in half, and has warned its nearly 100,000 employees of “painful” cuts to its payroll.

Oscar Munoz, United’s chief executive officer, and Scott Kirby, its president, told staff at the Chicago-based carrier that the impact of the coronavirus pandemic was getting more severe.

Passenger numbers had fallen by more than 1m in the first two weeks of March alone, they warned, as they forecast that United’s revenue this month would be $1.5bn lower than the same period of last year.

“We have been determined to do everything possible to avoid painful steps that affect your paycheck. But, based on the severity of the situation, that no longer appears realistic,” they warned staff, saying that corporate officers would have their salaries cut in half.

United has begun talking to union leaders “about how to reduce our payroll expense in a way that minimises what we know will be painful for all of us,” they added, without giving details.

United said it would reduce capacity for April and May by about 50 per cent and now expects “deep cuts” to extend into the usually lucrative summer travel period.

Passenger numbers could fall much further, they warned: “Even with those cuts, we’re expecting load factors to drop into the 20-30 per cent range, and that’s if things don’t get worse.”

The news followed Donald Trump’s decision to extend travel restrictions to the UK and Ireland this weekend. American Airlines and Delta Air Lines have announced deep cuts to their international services, and all three of the largest US airlines have said they are talking to the federal government about possible assistance.

Australian shares sink after regulators order cut in trades

Jamie Smyth in Sydney and Philip Stafford in London

Australia’s share market dived 7 per cent on Monday even as regulators ordered high frequency traders to cut the volume of trades by up to a quarter in a bid to reduce the strain on the exchange.

More than A$100bn was wiped off the value of the S&P/ASX 200 index by midday, which dropped 398 points to 5140.6, amid continuing fears about the economic impact of the spread of the coronavirus.

In a statement on Monday, Australia’s corporate regulator Asic said Australian equity markets had seen “exponential increases” in the number of trades in the last two weeks. More than 2.4bn shares changed hands on Friday, compared to an average of 1.9bn in February.

While the regulator said there was no disruption to market operations, it admitted there was a significant backlog of work over the weekend.

Australian regulators have told the most active traders on the country’s equities markets to trade up to 25 per cent less than they did on Friday, as even higher volumes would put the ability of the exchange and banks to handle the deals under strain.

Evan Lucas, chief market strategist at InvestSMART Group Limited, said Asic’s action was aimed at limiting high frequency trading, which the regulator must believe is causing market volatility in a way that was neither fair nor reasonable.

Travel related stocks and banks were among the worst impacted with Commonwealth Bank of Australia shedding almost 8 per cent to A$61.20 and Flight Centre losing 13 per cent to A$16.64.

Chinese industrial production and retail sales drop

Don Weinland reports from Beijing

China’s industrial output fell to its lowest level on record and retail sales collapsed in the first two months of the year, a sign that the outbreak of coronavirus and a prolonged quarantine of millions of people will hurt China’s economy more than the hit from the Global Financial Crisis.

Industrial output tumbled by 13.5 per cent and total retail sales plummeted by 20.5 per cent year on year in January and February, the National Bureau of Statistics said on Monday.

The urban unemployment rate surged to 6.2 per cent in February, the highest level ever reported. Fixed asset investment also fell by 24.5 per cent, down from 5.4 per cent growth when it last reported the figure.

The numbers came in far below analysts’ expectations. Many China experts have been surprised that Chinese officials were willing to report figures that reveal such a devastating impact on the economy.

“The latest activity and spending data were much weaker than expected and point to a far deeper downturn than during the Global Financial Crisis,” Capital Economics said in a note.

New York to restrict restaurants to takeaway only

Joshua Chaffin reports from New York

New York mayor Bill De Blasio is set to introduce measures to limit restaurants and cafes to takeaway only in a bid to control the spread of coronavirus.

Mr de Blasio also indicated he would sign an order restricting the city’s bars and restaurants to take-out and food delivery service as well as closing cinemas, theatres and nightclubs.

Many city restaurants had already been grappling with dramatic falls in attendance because of the virus. Some have closed their doors, including Jing Fong, Chinatown’s largest restaurant.

Belinda Chang, an award-winning sommelier who has worked at top restaurants in New York and Chicago, called the situation “terrifying” for smaller operators.

“Restaurants run on the slimmest of margins and and the vast majority of restaurant employees live paycheck to paycheck, So losing even one shift can be the difference between making rent and not,” she said.

Hong Kong visitors numbers collapse in February

Visitors to Hong Kong fell by 96 per cent in February compared to a year earlier, as the impact of the coronavirus drove a massive reduction in travel numbers.

Arrivals from the Chinese mainland, which make up the majority of visitors to the city, plummeted by 98 per cent over the same period, the Hong Kong Tourism board (HKTB) said in an emailed statement.

The HKTB also said on Monday it would launch a plan to support travel and related industries, with a budget of HK$400m ($51.5m).

Dane Cheng, executive director of the HKTB, said: “Our monthly arrivals have dropped to the level of the daily average during the peak season last year, a clear sign that the travel and related industries have been hit very hard”.

The fall comes after sustained pressure on the industry last year, when the protests weighed on travel. Visitors to Hong Kong over the whole of 2019 fell by around 14 per cent.

South Korea discovers coronavirus cluster at another church

By Edward White and Kang Buseong

A new cluster of coronavirus cases at a church in South Korea has been confirmed, raising fears about future outbreaks despite a broader decline in new infections.

Officials at Seongnam, a city south-east of Seoul, said on Monday that 40 new cases of coronavirus among members of the city’s Grace River Church have been confirmed. Tests are also pending for other church members.

The new cluster came despite the number of new cases confirmed in the country falling to the lowest level in more than three weeks on Monday.

The results over recent days have spurred hopes that South Korea’s programme of mass testing and widespread social distancing is working to contain the virus but officials have continued to warn the public over the potential for new clusters to emerge.

The Korea Centers for Disease Control reported 74 new cases nationwide on Monday, down from a peak of 909 cases reported on February 29.

The total case number in the country of 51m is now 8,236, while 75 people have died from the virus, reflecting a mortality rate of below 1 per cent.

Monday’s report marked the lowest number of new cases since 74 were reported on February 21. The daily tally of cured patients has also been outpacing new infections in recent days.

South Korean stocks were choppy, swinging between positive and negative territory, in morning trading in Seoul on Monday after the US Federal Reserve cut interest rates to zero in a bid to head off a global economic downturn caused by the coronavirus pandemic.

Imported cases account for majority of new infections in China

China reported 12 imported cases of coronavirus to the end of Sunday, out of 16 cases reported across the mainland. There have now been 123 imported cases. The overall number of coronavirus cases rose to 80,860.

There were 14 new deaths linked to the virus, all of which were reported in Hubei, the origin of the outbreak, taking the total number of fatalities to 3,213.

The number of recovered patients who have been discharged rose to 67,749.

Las Vegas hotels close amid coronavirus

Dave Lee reports from San Francisco

Hotels on the famed Las Vegas strip have begun closing their doors as coronavirus spreads in the US.

On Sunday, MGM Resorts announced it was taking no new bookings at its Vdara resort, and existing guests would be moved to the Aria nearby.

That was followed by the news Wynn Resorts, owner of the Wynn and Encore casinos, would be closing both locations at 6pm on Tuesday for at least two weeks.

“The Company has committed to pay all full-time Wynn and Encore employees during the closure,” a statement from chief executive Matt Maddox said.

Australian central bank moves to boost liquidity

Jamie Smyth reports from Sydney

Australia’s central bank said on Monday it would pump more cash into the financial system to tackle a liquidity squeeze and financial regulators said they were considering easing regulatory conditions due to the coronavirus crisis.

“The funding position of the banking system is strong,” said Australia’s Council of Financial Regulators, which is chaired by Philip Lowe, governor of the Reserve Bank of Australia, on Monday.

“At the same time, trading liquidity has deteriorated in some markets and financial institutions are having to adjust to a more volatile environment.”

The Council said the RBA would conduct one month and three month repurchase operations to help boost banks liquidity and prevent a cash squeeze affecting cash strapped businesses. In addition, the RBA will conduct repo operations of six-months maturity or longer at least weekly, as long as market conditions warrant, said the Council.

Richard Yetsenga, chief economist at ANZ Bank, said by enabling financial institutions to lend their holdings of government bonds to the RBA in exchange for cash, authorities were acting to limit the risk of liquidity shortages.

“This is a strong policy step… markets are now focused on virtually all central banks taking rates to zero, and resorting to quantitative easing; including Australia,” said Mr Yetsenga.

The council said it would meet with Australia’s main lenders later this week to discuss how they could best support customers through the crisis.

In addition, the council said financial regulators are examining how the timing of regulatory initiatives might be adjusted to allow financial institutions to concentrate on their businesses and assist their customers.

These actions, which could include easing the introduction of tougher capital requirements, would emphasise the importance of a continuing supply of credit, particularly to small businesses.

US recommends organisers cancel events of more than 50 people

Demetri Sevastopulo in Washington

The US Centers for Disease Control and Prevention on Sunday evening recommended that organisers of events that are expected to draw more than 50 people should cancel those events for the next two months.

The recommendation comes as companies and institutions across the US are increasingly telling workers to telecommute and as citizens increasingly avoid restaurants and other venues where people gather in big groups.

But the CDC said the recommendation did not apply to schools, third-level education institutions and businesses.

The recommendation comes as some states in the US, including Georgia, have decided to postpone their presidential primaries. Joe Biden and Bernie Sanders, the two remaining contenders for the Democratic presidential nomination, have started holding virtual campaign rallies because of the spreading pandemic.

Mr Biden and Mr Sanders will shortly begin their first one-on-one debate on Sunday evening, which started with an elbow bump instead of a handshake. The debate had been scheduled to be held before a live audience in Arizona, but was moved to an empty studio in Washington because of coronavirus fears.

US futures tumble despite Fed intervention

By Katie Martin, Robin Wigglesworth, Colby Smith and Hudson Lockett

US stocks headed for another slide as Asian trading got under way on Monday, despite an aggressive package of measures to support markets from the Federal Reserve and other major central banks.

Futures markets pointed to a 4 per cent decline in the benchmark S&P 500 index when it starts trading later in the global day, even after the Fed said it would slash interest rates effectively to zero and kick-start a fresh programme of bond buying in response to the deepening crisis over the coronavirus pandemic. At one point the futures were limit down, suggesting a 5 per cent fall.

In early trading in Asia-Pacific markets, Australia’s S&P/ASX 200 dropped 5 per cent. Japan’s benchmark Topix rose 1.2 per cent after the central bank announced it would hold an emergency policy meeting at noon on Monday. The dollar index, which tracks the currency against a basket of its peers, fell 1 per cent. The Japanese yen, a haven during times of uncertainty, rose 1.3 per cent to ¥106.33 against the greenback.

The 10-year US Treasury yield fell 26 basis points to 0.6823 per cent. Yields fall as prices rise.

“The Fed has thrown everything at this. If we are now facing the end of central bank action, it means we are on our own,” said Seema Shah, chief strategist at Principal Global Investors. “There is a fear settling in the market, investors are terrified that this was all that was left.”



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