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Daily COVID19 Global Economy Newsletter April 24, 2020

If it comes to a focus green economic recovery opinions vary/ Ipsos Mori

The COVID-19 pandemic will badly hit all EM economies. Limitations in health care, fiscal buffers, and economic structure typically make EMs more vulnerable to major external shocks. Oxford Economics scorecard ranks EMs accordingly and predicts that Latin American and African regions will be worst affected../ Oxford Economics

Green economic recovery seemsimportant to us

Covid-19 badlyhitting Emerging markets

As the coronavirus spreads rapidly around the world, some European countries have begun flattening the curve of infections. According to numbers by Johns Hopkins the start to a flattening is especially visible in Germany, where a total of around 150,000 cases had been recorded most recently./ Worldometers & Statista

Some of the hardest-hit countries from the COVID-19 crisis have been in Europe, and projected unemployment estimates in countries like Spain and Italy are greatly outpacing numbers from 2019./ Statista

Europe (unlike the US) is flattening the curve

European joblessrates surge

The non-profit organisation Reporters Without Borders released its World Press Freedom scores for 2020 this week. Fathom Consulting has compared this data with the Oxford University's COVID-19 policy response data, as well as figures on case rates and fatality rates. A few things stand out: 1) there is no correlation between policy strictness and political openness, and 2) there is also no correlation between the number of cases per capita and policy response, or between the deaths per capita and policy response./ Fathom Consulting

Is there any logic in policy responses to Covid-19?

France’s eight weeks of confinement to stop the spread of the coronavirus will cost the country some €120 billion in lost revenue, according to a study by the French economic observatory. Restarting consumer spending after the lockdown will be key to getting the economy back on its feet./ rfi

France will lift its coronavirus lockdown countrywide on a case-by-case basis, rather than region by region. President Emmanuel Macron told mayors that the end of the lockdown will happen within a “national framework” that can be adapted locally, depending on health conditions and public transport./ Bloomberg

Oktoberfest is officially canceled due to COVID-19 and social distancing restrictions, despite the festival being on pace to potentially break its record for total beer poured./ Statista

British finance minister Rishi Sunak is preparing to offer 100%guarantees on loans to Britain’s smallest businesses after sustained pressure from Conservative lawmakers and the Bank of England./ Reuters

Britain will keep lockdown measures in place until it is safe to ease restrictions despite the economic costs of the rules, health minister Matt Hancock./ Reuters

GERMANY

FRANCE

UK

ITALY

SPAIN

Political fragmentation is intensifying in Italy as the coronavirus pandemic gives new ammunition to anti-establishment parties and challenges its European membership. Italy has the highest death toll from the Covid-19 outbreak in Europe and has desperately lobbied its partners in the region for financial support to deal with the impact of the health crisis. However, northern European nations have been reluctant to give the Italian government everything it wants — which in turn has fueled a toxic debate back in Rome./ CNBC

Spain has urged EU leaders to approve up to €1.5tn in grants to rebuild the bloc’s pandemic-stricken economies and prevent the worst-hit countries from being undercut by better-off states. Nadia Calviño, Spain’s deputy prime minister for the economy, said it was necessary for the so-called coronavirus recovery fund to award grants, not loans, to preserve the bloc’s internal market from unfair competition from states in a better financial position to fund business rescues and stimulus packages./ FT

The most likely scenario is a U-shaped rebound and a slow return to the world from before pandemic, according to the latest report from Bank Pekao, Poland’s second-largest bank and currently managed by the Polish government./ Warsaw Business Journal

The Russian economy has been rocked by the coronavirus outbreak, and fears the fresh OPEC+ oil production pact between Russia and Saudi Arabia will not be enough to address a historic fall in demand. The turmoil has shocked traders around the world and resulted in sharp volatility on the Russian stock markets and swings in the value of the ruble./ The Moscow Times

India had stepped into 2020 with lower growth projections on the economic front after several quarters of snail-paced GDP growth. And now, the coronavirus pandemic has further turned matters gloomy. International rating agency Fitch has slashed India’s GDP growth rate projections for 2020-21 to 0.8 per cent. Brian Coulton, chief economist at Fitch Ratings, said, “The world GDP is now expected to fall by 3.9 per cent in 2020, a recession of unprecedented depth in the post-war period.”/ India Today

POLAND

RUSSIA

INDIA

JAPAN

The downturn in Japan's private sector economy gained momentum in April, with business activity slumping to the greatest extent on record, according to flash PMI data. The headline au JibunBank flash PMI plunged 8.5 points to 27.8. Stricter rules to limit the spread of COVID-19 has cut a swathe through demand, with new business inflows falling steeply which, in turn, led to a severe fall in backlogs of work. Business sentiment also plummeted to the lowest in the survey history, adding to expectations that the downturn has much further to run. In particular, there could also be additional economic damage, especially to the service sector, if the government decides to extend its month-long state of emergency, although the large-scale stimulus package may offset partially the adverse impact to activity./ IHS Markit

Japan’s new economic stimulus package in response to the coronavirus pandemic is estimated to boost real gross domestic product by about 4.4%. / Reuters

Japan's economy has been worsening rapidly in April due to the global coronavirus pandemic. The Japanese economy, highly dependent on exports, is projected to contract by 5.2 percent in 2020 from a year before, its worst downturn since 2009 at the height of the global financial crisis, according to a report released by the International Monetary Fund/ NIkkei

SECTOR NEWS

Global market data (as of April 23, 2020)./ Reuters

New composite flash PMI data from IHSMarkit PMI with unprecedented lows for both manufacturing and services PMIs. 81% of services and 75% of manufacturing firms reported falling business activity in April./ IHS Markit

Eurozone/ US

UK/ Germany

France

Private equity

Automotive

While China’s 48-percent decline in passenger car sales was actually an improvement over the 81-percent drop the car industry suffered in February at the height of the Wuhan outbreak, the worst may be yet to come for Europe and the United States. Both markets had started the year relatively normal before sales fell off a cliff as the crisis started to unfold in March. Considering that April is the first full month under lockdown in most countries and that millions lost their jobs due to the closures, it seems likely that April will be even worse for the automobile industry./ Statista

Genuine economic deterioration is a primary risk to private capital markets – PE tends to behave as a GDP-linked business. As consumer spending and business investment is set to decline, we expect to see a slowdown in PE transaction volume that follows the expected economic contraction./ Mergers & Acquisitions

Gold headed for a weekly advance on expectations there’ll be more stimulus measures to boost coronavirus-hit economies, with RBC Capital Markets predicting allocations to bullion will increase, at least for now./ Bloomberg

Gold

Oil & gas

Due to mitigation efforts that have limited most travel, oil demand is expected to fall by an unprecedented 9.3 million barrels per day this year from the 2019 level of 100 million barrels per day./ World Bank

Alibaba Group Holding Ltd. will invest 200 billion yuan ($28 billion) on cloud infrastructure such as datacenters over the next three years, a major effort to extend one of its fastest-growing businesses to more countries./ Bloomberg

Living in lockdown: India turns to technology/ ICAEW

TMT

AFTER HOURS

An asteroid estimated to be 1.2 miles wide will fly by Earth next week, but it's not expected to collide with our planet. And if an asteroid could be aware of such things, it appears to be … wearing a face mask in deference to the pandemic, according to new images from Arecibo Observatory in Puerto Rico./ CNN

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