US daily death toll rises by most in week
Mamta Badkar in New York
The daily coronavirus death toll in the US climbed the most in seven days, a further sign the pandemic is spreading outside the country’s longtime hotspots New York and New Jersey as states push ahead with plans to gradually reopen their economies.
A further 1,353 people in the US died from Covid-19 over the past 24 hours, according to data compiled on Thursday by the Covid Tracking Project, up from 1,259 on Wednesday. That put the total number of deaths from the pandemic at 95,705.
The Covid Tracking project does not count so-called probable deaths, which puts its fatalities count below that of Johns Hopkins University, which reports 101,337 deceased.
The one-day death toll held near a two-month low of 79 for a second consecutive day in New York, which has been the hotspot for the outbreak in the US but has begun to gradually reopen.
Alabama’s daily death toll ticked up again, rising by 9 to 590, while the number of positive tests rose by 467 to 16,310. In Mississippi the number of daily deaths rose for the fourth consecutive day, climbing by 23 to 693 and in Georgia the number of one-day fatalities rose by 55 to 1,962, though the number of positive tests over the past day slowed to 649 bringing the total to 45,070.
The rise in daily deaths accompanied an increase in the number of positive tests, which rose by more than 23,000 bringing the nation’s total to 1.7m. The number of tests conducted rose by 453,000 — a single-day high — to 15.6m. The Covid Tracking Project attributed this to “a few big data dumps” as New York and Louisiana reported 65,245 and 46,182 tests respectively, well above average.
Asia stocks dip ahead of Trump press conference on China
Stock markets in Asia-Pacific dipped on Friday on concerns that a planned statement by Donald Trump on China would further escalate US-China tensions.
The Topix in Japan was down 0.5 per cent, South Korea’s Kospi slipped 0.6 per cent and the S&P/ASX 200 nudged 0.1 per cent lower in Australia.
US stocks reversed early gains to close 0.2 per cent lower as optimism over economic recovery from the pandemic was eclipsed by the escalating tensions between Washington and Beijing. President Donald Trump said he would hold a press conference on China later on Friday.
Mike Pompeo, US secretary of state, said this week that Hong Kong could no longer be seen as autonomous from China following Beijing’s move to introduce national security laws in the territory.
S&P 500 futures were down 0.4 per cent.
China reports no new coronavirus cases for second time since January
Health authorities in China reported no new coronavirus cases to the end of Thursday, down from two a day earlier.
China last reported no new cases a week ago, which was the first time the caseload had not risen since public reporting of the number of Covid-19 patients began in January.
The number of confirmed coronavirus infections in mainland China stands at 82,995 with 4,634 deaths.
There were five cases of people found to test positive for the virus but who showed no symptoms.
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China domestic air travel rebounds
John Reed in Bangkok
Domestic air travel in China, after collapsing due to coronavirus, has now reached more than 50 per cent of what it was a year ago, according to ForwardKeys, a consultancy that tracks air ticket bookings.
The group also said in a news release that its analysis of flight ticketing data revealed “a significant uptick in last-minute domestic flight bookings in China between 11 May and 21 May”. It said this phenomenon had been influenced by the return of Chinese students to universities.
“The revival will certainly be welcomed by everyone in the tourism industry, but it needs to be kept in perspective because at the moment the business is mostly local and, typically, the shorter the distance people travel, the less they tend to spend,” ForwardKeys, which is based in Valencia, Spain, said.
The consultancy said that it was likely that an even stronger recovery was under way in China’s hospitality sector than its data suggested, as many people would choose to drive or take high-speed trains rather than fly.
The lockdowns and grounding of flights that accompanied the Covid-19 pandemic have caused a collapse in tourism globally, but some Asian countries with falling infection rates are now allowing domestic travel to resume.
The government of Thailand, which derives about 20 per cent of its GDP from tourism and related industries, is expected to announce an easing of domestic travel restrictions as part of a third wave of easing of its lockdown measures later on Friday.
China unleashes new crackdown on Wuhan citizen journalists
Don Weinland and Christian Shepherd in Beijing
In her last report posted to YouTube on May 13, citizen journalist Zhang Zhan stood outside a train station in Wuhan and described conditions in the city where the coronavirus pandemic began.
Wearing a surgical mask and talking into the camera on her mobile phone, the 37-year-old former lawyer noted how “human rights had suffered” as curbs on movement continued even after lockdown had officially ended.
Two days later, Ms Zhang was detained by police at her parents’ home in Shanghai, charged with “provoking quarrels and making trouble”, according to a document seen by the Financial Times. Several people close to her have confirmed her detention.
Ms Zhang joined a cohort of activists, journalists, lawyers and social media personalities arrested after documenting the outbreak of coronavirus in China or questioning the Communist party’s handling of the ordeal.
Read more here
AIIB to lend $750m to the Philippines to help fight coronavirus
The Beijing-based Asian Infrastructure Investment Bank has approved a $750m loan to the Philippines to help with its public health response to the Covid-19 pandemic as well as its economic fallout.
Cofinanced with the Asian Development Bank, the funds will go toward increasing the government’s testing capacity, bolstering vulnerable sectors, including agriculture and providing emergency assistance to poor households.
Additionally, as part of the terms of the loan, at least 1m micro, small and medium-sized enterprises, of which 58 per cent are registered to women, will benefit from wage subsidies, the AIIB said.
Lockdown measures in the Philippines are expected to take a heavy toll on the country’s economic growth with the IMF estimating that gross domestic product could see a sharp contraction from 6.2 per cent to 0.6 per cent for 2020.
“The focus of our efforts is to help the government tackle the immediate health and economic challenges posed by the pandemic. AIIB’s support will contribute to building economic resilience and ensuring quick recovery,” said AIIB Vice President, Investment Operations, DJ Pandian.
AIIB’s Covid-19 Crisis Recovery Facility, created as part of the co-ordinated international response to counter the pandemic, has an initial size of $5bn-$10bn to support AIIB members’ urgent economic, financial, and public health needs and quick recovery from the crisis.
Japan industrial production plummets by 9.1% in April
Robin Harding in Tokyo
Industrial production in Japan fell by a worse-than-expected 9.1 per cent compared with the previous month in April as the full impact of coronavirus became apparent.
It was the worst decline since the current data series began in 2013 and significantly below analyst estimates of a 5.1 per cent drop.
Companies surveyed for the data forecast a further 4.1 per cent fall in May before a 3.9 per cent recovery in June.
The data show the scale of the Covid-19 impact on manufacturing, with many production lines suspended, and suggest a rapid rebound is unlikely.
Mainstay industries of automobiles, steel and transport equipment were the main contributors to the decline.
However, the determination of Japanese companies to keep their staff was visible in labour market data, with the unemployment rate rising by just 0.1 percentage point to 2.6 per cent.
The ratio of open jobs to applicants, a more sensitive indicator, fell by 0.07 points to 1.32 — suggesting there are still more jobs available than applicants seeking them.
VW to invest €2bn in China electric vehicle ambitions
Christian Shepherd in Beijing
Volkswagen plans to pour €2bn into making electric vehicles in China, as the German automaker decides to expand production in the world’s largest car market despite a slowdown that has been intensified by coronavirus.
VW announced that it is set to raise its stake in an electric vehicle joint venture with Chinese automaker JAC Motors to 75 per cent from 50 per cent, gaining management control.
VW will invest €1bn in the joint venture, which will also buy it a 50 per cent stake in state-owned Anhui Jianghuai Automobile Group Holding, the parent company of JAC Motors, VW said.
The deal, expected to be finalised in July and completed by the end of 2020, marks the first substantial move by a global automaker to expand its presence in China since Covid-19 hit sales in the first quarter.
VW will spend a further €1bn to acquire a 26 per cent stake in battery manufacturer Gotion High-Tech and become the company’s largest shareholder, VW said.
Formed in 2017, the JAC joint venture, VW’s third in China, is part of the German automaker’s ambitious plan to ramp up production of emission-free cars and compete with the other manufacturers, such as sector leader Tesla, to sell 1.5m electric cars to Chinese consumers by 2025.
India’s Covid-19 death toll surpasses China’s
Amy Kazmin in New Delhi
India’s coronavirus death toll has exceeded China’s total, with 4,711 people in India now confirmed to have died from the virus, compared with China’s official toll of 4,638, according to the Johns Hopkins University coronavirus tracker.
India’s confirmed coronavirus caseload has surged in the past few weeks as New Delhi has gradually eased a draconian lockdown imposed in late March in a bid to slow the spread of the deadly pathogen.
In total, India now has more than 165,300 confirmed cases, giving it the world’s 9th biggest outbreak of the virus, according to Johns Hopkins. Of the total cases, about 71,000 have recovered, while more than 89,600 remain active, according to the Indian tracker CovidIndia.org.
However, public health experts say India’s official death toll probably understates the true magnitude of the fatalities caused by the virus. Doctors say that patients who die at home — without being tested for the virus — are not being counted.
Even in hospitals, authorities in some states are under intense pressure to classify deaths of infected patients as being due to co-morbidities or other factors. Some Indian states, such as Prime Minister Narendra Modi’s home state of Gujarat, have been accused of deliberately restricting coronavirus testing, even among symptomatic patients, so as to hold down the official numbers and death toll.
Meanwhile, the number of coronavirus infections in India continues to rise rapidly as authorities relax restrictions in a bid to revive the battered economy.
Indian health officials have touted the relatively low percentage of cases that have required critical care treatment. But the country’s severely under developed healthcare system is already showing the strain.
India’s financial capital Mumbai, which has been hardest hit, is struggling to cope with the onslaught of patients.
In New Delhi, the national capital, private hospitals — which are preferred by well-heeled city residents over public hospitals — have only a handful of ICU beds for covid patients left.
South Korea grapples with scores of new cases
Edward White in Wellington and Kang Buseong in Seoul
Scores of new coronavirus infections were linked to a logistic centre in Seoul on Friday, highlighting the dangers of new outbreaks as cities around the world rush to reopen and restart their economies.
South Korean health authorities reported 58 new virus infections on Friday, down from a two-month high of 79 on Thursday but marking a sharp turnround from late April when the country reported zero new local infections for several days.
Almost 100 new cases confirmed over the past week have been linked to a cluster at a warehouse run bye e-commerce group Coupang, raising concerns over the potential for a large-scale outbreak.
According to the company, more than 3,800 of about 4,350 employees and visitors at the site have now been tested for the virus.
In response to the uptick in new cases, officials have reinstated some social distancing measures — slowing a staged return to schools and temporarily closing museums and other public spaces.
Separately, South Korean factory output saw its steepest monthly decline since the global financial crisis, as the export-focused economy continues to be battered by a slump in global demand.
Industrial production fell 6 per cent in April, according to Statistics Korea, the worst drop since December 2008.
Video — how to reopen without allowing a resurgence of cases
As countries in Asia — including South Korea, Japan, Singapore and even China — are confronted with new outbreaks of coronavirus cases even after scoring impressive victories, policy makers are watching from countries slowly emerging from lockdown and trying to plan the best strategy.
In this video, the FT’s science writer Anjana Ahuja explains the science behind governments’ strategies to ease lockdown restrictions, while allowing economies to reopen.
Renault to slash 14,600 jobs in €2bn cost cutting plan
David Keohane in Paris
Renault plans to cut 14,600 jobs, shrink production and restructure some of its French factories as the carmaker looks to slash €2bn in costs amid falling demand and the aftermath of the 2018 arrest of Carlos Ghosn.
With profits almost wiped out last year and sales slumping, Renault is trying to achieve more than €2bn in savings over the next three years while cutting its global production capacity from 4m vehicles in 2019 to 3.3m by 2024.
Before his arrest on charges of financial misconduct in Japan, former Renault chief Mr Ghosn had targeted selling more than 5m vehicles by 2022.
Now, as part of its plan, Renault said it was launching discussions with unions to repurpose plants in France, some of which could stop making cars altogether, and which would involve job cuts.
The group has not made final decisions about the future of six sites in France, including at Flins and Dieppe, as it faces both political and union opposition.
The 14,600 cuts across the group will be “based on retraining, internal mobility and voluntary departures” and include a reduction of 4,600 staff in France. Renault employs more than 180,000 people globally.
European stocks poised to slip on rising US-China angst
Hudson Lockett in Hong Kong
Geopolitical tensions hit global stocks on Friday as investors braced for potential retaliation from Washington after Beijing approved a sweeping national security law for Hong Kong.
In the Asia-Pacific region, Hong Kong’s Hang Seng fell 0.7 per cent. Elsewhere, Australia’s S&P/ASX 200 dropped 0.5 per cent and Japan’s Topix index shed 0.6 per cent. European equities were set to follow, with futures on London’s FTSE 100 and Frankfurt’s Dax each down about 1 per cent.
Investor optimism over the easing of economic lockdowns prompted by the coronavirus pandemic is at risk of being overshadowed by simmering tensions between the world’s two biggest economies.
Overnight, Wall Street’s S&P 500 index reversed gains of 1 per cent to close down 0.2 per cent, snapping a three-day winning streak for US stocks. The fall came after US President Donald Trump said he would hold a news conference regarding China on Friday after Beijing pushed ahead with the controversial legislation.
Washington this week began laying the groundwork to potentially remove Hong Kong’s special trade status after Mike Pompeo, secretary of state, said the US no longer viewed the Asian financial hub as autonomous from mainland China.
UK corporate headlines
– Value retailer B&M reported strong revenue growth in April and May as people turned to DIY and gardening through lockdown.
– Young & Co has secured extra funding from its banks, as the brewer warned it expects that social distancing guidelines will mean “lower levels of trade” once its pubs do eventually reopen.
– Nationwide set aside £101m to cover expected credit losses through the economic downturn.
– Building materials group SIG said funds managed by private equity group Clayton, Dubilier & Rice will invest £85m into the company in a rare private investment into public equity deal, known as ‘PIPEs’ in industry jargon.
Thailand to ease lockdown restrictions from June 1
John Reed in Bangkok
Thailand is to allow gyms, massage parlours, cinemas, theatres, and zoos to reopen from Monday as part of a third wave of relaxation of lockdown measures put in place in March to slow the spread of Covid-19.
The kingdom will also shorten a night-time curfew now in place by an hour, with the ban on going outdoors now to run from 11pm to 3am.
Thailand, the first country to report coronavirus cases after China, has seen a sharp fall in new local infections in recent weeks. On Friday, 11 new cases were reported, all of them people returning from Kuwait, bringing the total number of cases to 3,065, with deaths remaining steady at 57.
Thai boxing stadiums and other large venues remain closed for now, and a ban on selling alcohol in restaurants remains in place. Aviation authorities have barred most incoming flights until the end of June.
French household consumption drops most on record in April
France’s household consumption fell the most on record in April, but the country’s economic contraction in the first quarter was less dramatic than previously estimated.
Household consumption fell 20.2 per cent in April, compared with the previous month after contracting 17 per cent in March, according to data from the Office for National Statistics (Insee). The readings mark the second consecutive month registering a historic drop since the start of the series in 1980.
The fall was driven by consumption of manufactured goods which contracted by more than 42 per cent in both months, reflecting the closure of non-essential shops.
However, in a separate release, Insee revealed that France’s gross domestic output shrank 5.3 per cent in the first quarter compared with the previous one, a less dramatic fall than preliminary estimates of a 5.8 per cent drop. Nevertheless, this was the largest fall since records began in 1950.
With more stringent restrictions than many other European countries, France’s contraction was larger than the 2.2 per cent for Germany, 2 per cent for the UK and 3.8 per cent for the eurozone.
Turkish economy grew quickly before pandemic hit
Laura Pitel in Ankara
Turkey enjoyed fast-paced economic growth in the first part of the year before the coronavirus pandemic put the brakes on president Recep Tayyip Erdogan’s plans for a credit-fuelled boom.
Gross domestic product expanded by 4.5 per cent in the first quarter of 2020 compared with the same period the previous year, when the country was suffering a recession as a result of a sharp slide in the lira.
The data offer a picture of the story that was unfolding in Turkey before the spread of Covid-19 in the country forced authorities to shut down large swaths of the economy.
Turkey’s first confirmed case of coronavirus was not until March 11 — six weeks later than countries such as Italy, the UK and Germany — and restrictions on shops, cafes, restaurants and workplaces only came into force in the final two weeks of the first quarter.
Other economic indicators such as manufacturing data suggest that Turkey suffered a sharp contraction in growth in the second quarter of 2020.
France’s pre-pandemic deficit hit EU 3% limit in 2019
Victor Mallet in Paris
France’s public sector deficit hit the EU’s limit of 3 per cent of gross domestic product in 2019, the national statistics institute said on Friday.
The figure, slightly better than the predicted 3.1 per cent, covers the year preceding the spread of the coronavirus pandemic. France and other developed economies are expected to record very large deficits this year, and the EU has temporarily waived its deficit limits to cope with the economic impact of lockdowns.
France’s public spending remained exceptionally high at 55.6 per cent of GDP in 2019, but was down by almost a percentage point from the year the reformist President Emmanuel Macron took office in 2017. Gross public debt remained steady at 98.1 per cent of GDP.
Economic growth in France last year fell to 1.5 per cent from 1.8 per cent in 2018 and 2.3 per cent in 2017, Insee said. The pandemic is triggering a deep recession this year, with economic activity down by a third at the start of the country’s lockdown in March, and economists and officials say GDP will shrink at least 8 per cent in 2020.
German retail suffers modest drop compared with European neighbours
Martin Arnold in Frankfurt
German retail sales fell 5.3 per cent in April, according to official data, adding to evidence that Europe’s biggest economy suffered a more modest drop in activity during the pandemic than many of its neighbours.
Separate data published this week showed retail sales in April fell 20.2 per cent in France and 31.6 per cent in Spain. In the UK, the volume of retail sales fell by 18.1 per cent in April, the Office for National Statistics said last week.
German children have been returning to schools, many shops and restaurants have reopened, football matches have restarted and manufacturers are ramping up production as lockdowns are partially lifted — despite social-distancing rules mostly still being in place.
Retail turnover fell 5.3 per cent in April from the previous month on a calendar and seasonally adjusted basis, Germany’s federal statistics agency said on Friday. Compared with the same month in the previous year, it was down 6.5 per cent.
The decline is more modest than the 13.8 per cent fall in the value of sales at all German non-financial businesses in April, which the statistics agency calculated in a new experimental early indicator determined from monthly sales tax returns.
Russia reports record number of daily deaths
Henry Foy in Moscow
Russia reported a record number of deaths from coronavirus on Friday and new infections ticked up, underlining the scale of the pandemic in the country despite moves by the government to lift lockdown measures.
Official government data showed 232 people died of Covid-19 overnight, a 33 per cent jump on Thursday’s death toll, which was the previous record high. The number of confirmed cases rose by 8,572 to 387,623 people, the world’s third highest total after the US and Brazil.
This week, president Vladimir Putin said that the spread of the virus in Russia had stabilised, encouraging a “gradual lifting of preventive restrictions” and calling for previously postponed national celebrations to mark the 75th anniversary of victory in the second world war to be held on June 24th.
Italian economy suffers largest contraction on record
Valentina Romei in London
Italy’s economy shrank more than previously thought in the first quarter and at the fastest pace on record to levels seen 20 years ago, as activity was choked by Covid-19 restrictions.
Italy’s gross domestic product fell 5.3 per cent in January to March compared with the previous quarter, revised down from the 4.7 per cent contraction in preliminary estimates, according to data from Istat, the office for national statistics. This is the largest contraction since records began in 1996.
Because of Italy’s multiple recessions — this is the fourth in just over a decade — the level of gross domestic output is that of 2000, well below that of France.
Following France’s GDP revision, the eurozone’s second and third-largest economies recorded the same first-quarter economic hit from the pandemic.
The French and Italian GDP revisions point to a worse than previously thought eurozone GDP contraction. Preliminary estimates showed output in the 19-member bloc fell 3.8 per cent in the first quarter.
The detailed accounts show Italian investment fell 8.1 per cent in the first quarter, with machinery and transport equipment shrinking by 12 per cent, while final consumption dropped by 5.1 per cent.
Bank lending to Eurozone companies hits record €73bn in April
Martin Arnold in Frankfurt
Eurozone companies increased their borrowing from banks by a record €73bn in April, driving up money supply by the fastest rate since the 2008 financial crisis, according to European Central Bank data.
The sharp increase reflected businesses rushing to draw down credit facilities in response to the economic impact of the pandemic. It followed a record €121bn increase in eurozone company borrowing in March.
The rise in lending suggests the central bank’s attempts to flood the financial system with cheap money since the pandemic started has so far managed to avoid a potentially damaging credit crunch.
The ECB said overall money supply in the eurozone surged to levels not seen since the global financial crisis 12 years ago, as overnight deposits and currency in circulation both rose rapidly.
Lending to non-financial corporations grew at an annual rate of 6.6 per cent in April, up from 5.5 per cent in March. However, lending to households declined by 3 per cent in April, having fallen by 3.4 per cent in March.
Households and businesses have responded to the pandemic by increasing the amount of money they hold on deposit at banks. The ECB said household deposits grew 6.7 per cent in April, while non-financial corporations increased their deposits by 13.7 per cent. At the same time, non-monetary financial corporations increased their deposits by 12.3 per cent.
Swedish economy bucks European trend to avoid recession
Richard Milne in Oslo
Sweden’s economy expanded in the first quarter as its no-lockdown approach to coronavirus helped prevent the deep recessions suffered by most other European countries.
GDP in the first three months rose by 0.1 per cent from the fourth quarter of last year in Sweden. The government still expects its economy to contract by 7 per cent this year, worse than neighbouring Denmark and Norway but better than many other countries that locked down because of the pandemic.
But private sector economists said the first-quarter figures, which were revised up from the first estimate of a small contraction, suggested they might need to adjust forecasts higher for the full year.
Sweden has suffered a significantly higher death toll than its Nordic neighbours, all of whom locked down, but fared better than the likes of the UK and Spain.
Proponents of its coronavirus approach have argued it would reap an economic benefit. But many economists have said Sweden’s exposure to exports and manufacturing meant that although it would do better than expected it would still suffer its worst downturn since the second world war.
Deflation stalks eurozone as price growth falls to four-year low
Martin Arnold in Frankfurt
The eurozone is on the brink of sliding into deflation after the economic disruption of the coronavirus pandemic dragged price growth in the bloc down to 0.1 per cent in May, its lowest level for four years.
The fall in the inflation rate, which turned negative in 12 of 19 eurozone countries in May, will fuel investor expectations that the European Central Bank will inject more monetary stimulus into the economy when its governing council meets virtually next week.
Falling energy prices were the main reason for the decline in inflation from 0.3 per cent in April to 0.1 per cent in May. Excluding energy, food, alcohol and tobacco, core inflation held steady at 0.9 per cent.
Inflation in the eurozone’s services sector rose slightly to 1.3 per cent in May, but price growth for non-energy industrial goods slowed to 0.2 per cent. Food, alcohol and tobacco prices surged 3.3 per cent, but this was offset by a 12 per cent drop in energy prices.
Price growth diverged between Europe’s largest economies, with inflation of 0.5 per cent in Germany, 0.2 per cent in France and 1 per cent in the Netherlands. But prices fell 0.9 per cent in Spain and 0.2 per cent in Italy.
The ECB is due to update its economic forecasts next week. Isabel Schnabel, one of its executive directors, told the Financial Times this week that its medium-term inflation outlook would be “of particular interest” and it stood ready to “expand any of its tools” if the situation “deteriorated”.
The ECB’s main target for inflation is to be below but close to 2 per cent, an objective it has failed to achieve for several years despite injecting significant amounts of monetary stimulus.
FA Cup final rescheduled for August 1
Samuel Agini in London
The FA Cup, football’s oldest competition, will resume next month and conclude with the final on August 1, the sport’s governing body in England has announced.
With the English Premier League resuming fixtures on June 17, the Football Association said the quarter-finals of the knock-out tournament, part of the football calendar for almost 150 years, would take place on the weekend of June 27-28.
Mark Bullingham, chief executive of the FA, said: “This has been a difficult period for many people and, while this is a positive step, the restart date is dependent on all safety measures being met.”
The quarter-finals see Arsenal, which has won the FA Cup more than any other club, take on Sheffield United, Leicester host Chelsea, and Norwich City against Manchester United.
Newcastle United, the subject of a £300m takeover bid from Saudi Arabia’s sovereign wealth fund, are up against Manchester City, whose Abu Dhabi-controlled parent attracted a $500m investment from private equity firm Silver Lake last year.
The Premier League has 92 matches left to complete the domestic season. Failure to finish the season would leave the league facing losses of at least £1bn.
Poland to open stadium doors to football fans from mid-June
James Shotter in Warsaw
Poland is to allow football fans back into stadiums from June 19, in the latest loosening of the rules put in place to fight the spread of coronavirus.
A quarter of stadium capacity would be allowed to be used, the prime minister said, adding that the admission of fans to football grounds would be done in such a way that they did not gather in big groups.
“For me this is a sign of the return to a new normality,” Mateusz Morawiecki said during a media conference on Friday at Warsaw’s national stadium.
The choice of June 19 as the start date will allow time to put hygiene measures in place, he added.
“Sport is necessary for all of us, so that the sweat and tears … gives joy not just to fans, but to all Poles.”
Poland has recorded 22,964 Covid-19 infections and 1,043 deaths, far fewer than in many western and southern European nations. But unlike other countries in central Europe, it has not yet had a big decline in new daily cases. On Thursday, 350 tested positive for the virus.
Stocks slip as geopolitical fears outweigh lockdown optimism
Investor optimism over the easing of lockdowns prompted by the coronavirus pandemic is at risk of being overshadowed by simmering tensions between the world’s two biggest economies.
US President Donald Trump is scheduled to hold a news conference regarding China on Friday, after Beijing pushed ahead with legislation that has raised concerns about Hong Kong’s future as a financial centre.
Geopolitical tensions dented global stocks on Friday, with London’s FTSE 100 falling 1 per cent as European markets recorded broad losses. Asian shares largely fell, while on Wall Street futures tied to the S&P 500 were down 0.2 per cent, off their worst levels of the session.
Norway opens up to Danes but snubs Swedes
Richard Milne in Oslo
Norway and Denmark have agreed to let each other’s tourists visit their countries from mid-June but excluded Sweden from their initial opening amid fierce debate about its coronavirus strategy.
Denmark is also opening up to tourists from Germany and Iceland from June 15 but not neighbouring Sweden, according to Danish prime minister Mette Frederiksen.
Norway will enter talks with Sweden as well as Finland and Iceland and will look closely at the infection rate, Erna Solberg, the prime minister, said on Friday.
Sweden has a death rate per capita almost 10 times that of Norway and four times that of Denmark after looser lockdown restrictions and keeping its borders and schools open.
Finnish health authorities have expressed scepticism about opening borders to Sweden because of the high infection rate there, instead looking towards the so-called Baltic travel bubble set up between Estonia, Latvia and Lithuania.
Brazil heads for recession after fall in first-quarter GDP
Andres Schipani in São Paulo
Brazil’s economy shrank in the first quarter of this year, paving the way for a recession as the country became a global coronavirus hotspot in the wake of a botched response to the pandemic from right-wing President Jair Bolsonaro.
Gross domestic product in Latin America’s largest economy plunged by 1.5 per cent in January to March compared with the last quarter of 2019, official data showed.
“The same thing happened in Brazil that happened in other countries affected by the pandemic, which was a drop in services to families due to the closure of establishments,” said Rebeca Palis at the national statistics institute, IBGE. “Durable goods, vehicles, clothing, beauty salons, gyms, accommodation, food have all suffered a lot from social isolation.”
Compared with the same period last year, the economy shrank 0.3 per cent. “Even if the quarantine is lifted, economic recovery will be very slow in Brazil. Lots of companies will fail, lots of people will be unemployed,” warned Luana Miranda, a researcher at the Brazilian Economy Institute.
Official data on Thursday showed 4.9m Brazilians lost their jobs in the three months to the end of April, pushing the number of people out of work to 12.8m after lockdowns to fight the pandemic started in late March.
“We expect Brazil to experience a sharp contraction of activity in 2020, concentrated in the first half of 2020, which is likely to lead to a significant further deterioration of the already weak labour market,” said Alberto Ramos, Latin America economist at Goldman Sachs, who forecast the economy would shrink 7.6 per cent in this year.
“In recent weeks Brazil became one of the global hotspots for new infections and so far there is no clear indication when the curve peak will be reached,” he added. The number of infections topped 438,000 on Thursday.
Mr Bolsonaro has frequently played down the seriousness of the virus, putting him in conflict with state governors and alarming business.
US spending falls by most on record in April
US household spending posted a record decline in April amid lockdowns even as incomes unexpectedly jumped boosted by jobless benefits.
Consumer spending fell 13.6 per cent in April from the previous month, the commerce department said on Friday, marking the steepest decline on records going back to 1959. Economists had forecast a 12.6 per cent drop, according to a Reuters survey of economists. Spending slid as governments issued stay at home orders and non-essential businesses closed.
Meanwhile, incomes jumped 10.5 per cent in April from the previous month, compared with expectations for a 6.5 per cent decline. “The increase in personal income in April primarily reflected an increase in government social benefits to persons as payments were made to individuals from federal economic recovery programmes in response to the Covid-19 pandemic,” the commerce department said.
Donald Trump , US president, in March signed into law a historic $2.2tn stimulus package that included an extra $600 a week in unemployment insurance for those without work and direct deposits or cheques of up to $1,200 for individuals. The House has since passed a Democratic plan for $3tn more in stimulus despite Republican objections that extending the extra payments will force businesses to “compete” with unemployment benefits for workers.
Moscow increases its official death count for April
Henry Foy in Moscow
Moscow has more than doubled its official April death toll from coronavirus, having once refuted suggestions that its previous tally understated the number.
The health department of Russia’s capital said in a statement that its new toll for last month came to 1,561 people, up from 636 previously announced deaths, after including people who were infected with Covid-19 but who had been registered as dying of other causes.
The revision comes after an analysis by the FT of all-cause mortality figures for the city found a rise in fatalities over a long-term average that was significantly larger than the official number of Covid-19 deaths.
Russia’s government responded to that article by saying the country never manipulates statistics and has a more reliable method for determining cause of death than other countries.
Moscow’s revised total has not been included in Russia’s official number of coronavirus deaths, which rose on Friday by a record daily amount to 4,374.
US-China fears dent recovery in global markets
Geopolitical tensions dented global stocks on Friday as investors braced themselves for potential retaliation from Washington after Beijing approved a sweeping national security law for Hong Kong.
The S&P 500 slipped 0.3 per cent in the opening minutes of trading on Wall Street, while the Nasdaq gained 0.1 per cent. London’s FTSE 100 led European markets lower with a decline of 1.3 per cent, while in Frankfurt the Dax fell 0.9 per cent.
Investor optimism over the easing of lockdowns is at risk of being overshadowed by simmering tensions between the world’s two biggest economies.
US President Donald Trump is scheduled to hold a news conference regarding China on Friday, after Beijing pushed ahead with legislation which has raised concerns about Hong Kong’s future as a financial centre. Critics have warned that the new law would curtail political freedoms in the city.
Mr Trump tweeted “China!” on Friday morning, but gave no indication of what he planned to announce.
“The agenda is unclear but given the recent mood . . . it is likely to be confrontational,” Deutsche Bank strategist Jim Reid said.
India’s economy slows in first quarter to lowest rate in 10 years
Benjamin Parkin in New Delhi
India’s economic growth slowed to 3.1 per cent in the quarter ending in March, the lowest in a decade, as the arrival of coronavirus began to knock the economy off course.
While the data beat many economists’ expectations, they captured only the first week of the country’s continuing lockdown.
Much of the economy has since ground to a virtual halt as the government of Prime Minister Narendra Modi imposed a nationwide curfew and strict restrictions on economic activity.
The “data provide barely a hint of what is to come”, said Capital Economics in a note, arguing that the government’s stimulus response will struggle to revive demand. “As such, we think India will suffer one of the slowest recoveries among major economies.”
Poorer countries join WHO call for virus patents to be shared
Donato Paolo Mancini in London and Michael Peel in Brussels
Thirty mostly low-income countries have joined a World Health Organisation push for the sharing of patents for coronavirus drugs and vaccines but they lack support from powerful governments and large pharma groups.
The WHO on Friday unveiled an initiative dubbed the Covid-19 Technology Access Pool, or C-Tap, which aims to make treatments, vaccines and tests accessible to all.
It comes amid growing tension over how to ensure fair access for all countries to Covid-19 interventions. While many poorer countries worry they will be squeezed out unless patents are shared, countries that are home to big pharmaceutical groups view such sweeping moves with concern.
C-Tap’s backers include Argentina, Brazil, Mexico, Pakistan, Indonesia, South Africa and Sudan. Its limited number of rich world supporters are Norway, the Netherlands, Luxembourg and Portugal.
Tedros Adhanom Ghebreyesus, the WHO’s director-general, said: “Based on strong science and open collaboration, this information-sharing platform will help provide equitable access to life-saving technologies around the world.”
Greece bans UK, US and French tourists but allows in ‘low-risk’ citizens
Kerin Hope in Athens
Greece will open its borders to tourists from 29 countries from June 15 while banning visitors from others that have been hit hard by the pandemic, the tourism ministry said on Friday.
The list of “low-risk” countries includes the neighbouring Balkan countries, central and Eastern Europe, the Baltic states, China, Germany, Israel, South Korea, New Zealand and Australia. Tourists will be able to fly direct to Athens and the northern city of Thessaloniki. Health authorities will carry out random tests at both airports.
Visitors from France, Spain, Italy, Turkey, the Middle East, Russia, the UK and the US are banned. The list will be expanded on July 1, when direct flights to the Greek islands will restart following consultations with local epidemiologists, the ministry said.
Five new confirmed cases of coronavirus were reported on Friday, bringing the total number to 2,909. No deaths were recorded, while 16 patients were being treated in intensive care units. The number of fatalities stood at 175, the public health organisation EODY said.
Powell says Fed ‘strongly committed’ to bolstering US economy
James Politi in Washington
Jay Powell, the chairman of the Federal Reserve, said the US central bank was “strongly committed” to supporting the US economy during the pandemic.
In a conversation with Alan Blinder, the former Fed vice-chair at Princeton University, Mr Powell said the US central bank was “strongly committed to using our tools to do whatever we can for as long as it takes to provide some relief and some stability” to help the recovery of the world’s largest economy after the coronavirus shock.
Fed officials have repeatedly said they were ready to take further action to help the US cope with Covid-19, but Mr Powell’s addition of the word “strongly” is a slightly more emphatic pledge compared to that made by the FOMC in late April, the last meeting of Fed policymakers.
Mr Powell was initially asked by Mr Blinder if he was “sleeping well” under the circumstances and the Fed chair responded that he was sleeping better compared to late February and early March.
Consumer spending shows improvement, say Citi and Wells bosses
Robert Armstrong in New York
The chief executives of Wells Fargo and Citigroup said on Friday that consumer spending is beginning to recover as the Covid-19 lockdowns ease.
Charlie Scharf of Wells said that, while debit card spending had been down 20-25 per cent earlier in the crisis from the year before, “now, depending on the week, spend is up 5 to 10 per cent [from the week before] and it’s pretty broad … a little bit of travel, a little bit of restaurants, you still wouldn’t call it healthy growth, but a marked improvement”. Credit card spending remains weaker, he said, but even there there were “incremental” increases.
Michael Corbat of Citigroup also reported spending growth, but described it as uneven. “In essentials, spending is up and we continue to see depressed levels in travel and dining … but we are seeing some pick up” though still at lower levels than a year ago.
Mr Corbat said that while 1.5m of Citi’s consumer borrowers, or about 4-5 per cent of the bank’s consumer loans, have requested payment forbearance, “a significant percentage of those who signed up have not taken advantage of the programmes” which “speaks volumes to the positive effects government programmes have had”.
Mr Scharf painted a similar picture, saying that 25-35 per cent of those who have requested forbearance “want to make payments and are making payments.” The question, he said, is “what happens when these [forbearance] periods end”.
Mr Corbat noted that in capital markets “we’ve seen great momentum, coming to a strong close to the first quarter and that momentum has continued in particular on the fixed income side”, in capital-raising and trading. He declined to give specific estimates for revenues in the banks’ capital markets businesses.
Both chief executives also echoed other banks that have spoken this week in saying that corporate customers are reducing their draws on credit lines as capital markets have reopened, and that more reserves for credit losses are likely in the second quarter.
López Obrador to resume Mexican trips despite rising cases and deaths
Jude Webber in Mexico City
Andrés Manuel López Obrador, Mexico’s president, will resume nationwide tours on Monday, even though Covid-19 has yet to peak and the number of cases and deaths is still rising.
The president will kick off a week’s trip to southern states by travelling to Quintana Roo and the tourist capital Cancún, where he will inaugurate work on Maya Train, one of his signature infrastructure projects.
Before the Covid-19 crisis, Mr López Obrador spent every weekend criss-crossing the country. He defended his decision to resume travel, saying it was necessary to transit to “the new normal”.
Mexico reported 81,400 confirmed cases as of Thursday night and 9,044 deaths, an increase of almost a third in Covid-19 deaths in a week, but Mexico’s low levels of testing point to a far higher spread.
On June 1, Mexico lifts two months of national quarantine but moves to a traffic light system under which states can open businesses, offices, shops and schools gradually, depending on the spread of the virus.
All states in the country with the exception of Zacatecas in the north are on “red”.
Mr López Obrador said his public events would be limited to 50 people, including the media, in order to comply with social distancing instructions.
UK chancellor unveils plans to avoid mass UK unemployment
George Parker in London
The UK chancellor has set out plans to stave off mass joblessness in Britain, extending a £6.8bn support package for the self-employed and confirming massive wage subsidies for employees until the end of October.
Rishi Sunak said the package of measures, which are more generous than had been expected, will act as a “lifeline” for millions of jobs and businesses blighted by the lockdown, as ministers pin hopes on an economic upturn in the autumn.
Boris Johnson is discussing with ministers a big job creation scheme, possibly to be announced before the summer break, focusing on upgrading infrastructure.
“We are trying to identify shovel-ready projects — we want to get a move on with this,” said one minister. Transport projects and environmental schemes are among the priorities.
Unemployment could rise by 2m because of the crisis, according to the independent Office for Budget Responsibility, and has become a focus for Mr Johnson. Gavin Williamson, education secretary, is drawing up a skills package to retrain workers, particularly the young.
The UK registered 324 coronavirus deaths in the latest 24-hour period, bringing the total to 38,161.
Employers to pay in to furloughed workers’ UK scheme from August
Laura Hughes in London
Companies will have to start contributing to the government’s furloughed workers’ scheme from August, the UK chancellor has said.
Employers will gradually pick up more of the wage bill from August 1, starting with employer national insurance contributions and pension contributions, Rishi Sunak said at Friday’s Downing Street briefing. For the average employer this would amount to 5 per cent of employment costs.
The scheme will be made more flexible to allow furloughed workers to be brought back part-time in July, Mr Sunak said.
From September, employers will be asked to pay 10 per cent of furloughed workers’ wages and this will rise to 20 per cent in October.
“As we reopen the economy, there is broad consensus across the political and economic spectrum, the furlough scheme cannot continue indefinitely,” he said.
Our economic response to coronavirus was designed to keep people in work, protect people’s incomes and support businesses, all to give us the best chance of recovering quickly as the economy reopens.
“In June and July the scheme will continue as before with no employer contribution at all,” the chancellor added.
In August, the taxpayer contribution to people’s wages will stay at 80 per cent. Employers will only be asked to pay National Insurance and employer pension contributions, which, for the average claim, account for just 5 per cent of total employment costs.
Teachers give governments poor grades on virus response, survey shows
Andrew Jack in London
Teachers around the world have given low marks to their governments in the handling of coronavirus and expressed concerns about plans to rapidly reopen their schools.
A survey of 4,253 teachers from 33 countries registered to attend T4, an education conference taking place this weekend, showed 56 per cent graded the official response to the pandemic between a D and an F, with only 8 per cent granting an A grade.
Four-fifths said they did not believe the conditions were right to return to the classroom yet, and many said they needed more support in using technology, which they believed would become more important following the move to online learning in response to Covid-19.
New York City on track to begin first phase of reopening on June 8
New York City is on track to begin its first phase of reopening in the second week of June, bringing back about 400,000 workers in the process as the US’s hardest-hit state continues its gradual recovery from the coronavirus pandemic.
Governor Andrew Cuomo said progress in the US’s most populous city was being made, including ensuring hospitals there had adequate quantities of protective medical equipment, the setting up of testing facilities and tracing services and the reopening of the public transport.
“We think all of this can be done by next week and we would be on track to open the week afterwards,” Mr Cuomo said.
A phase one reopening for New York City on June 8 would involve 400,000 people coming back to work, the governor said, including many in the construction industry.
New York City mayor Bill de Blasio joined Mr Cuomo by videoconference and pointed to data ranging from hospitalisation rates, deaths and new infections. “Indicators were moving in the right direction,” he said.
Five regions in upstate New York are ready to move to phase two, Mr Cuomo said, meaning workers in offices, retail services and barbershops can return to work. Employees and customers entering those premises will still be subject to guidelines limiting occupancy to 50 per cent and physical distancing. Employees in barbershops and hair services will need to be tested every two weeks and keep a log of customers to assist with tracing efforts.
A further 67 people in New York died from coronavirus over the past day, a smaller increase than the 74 reported on Thursday, but still hovering about the slowest rate of one-day increase in two months
Minutes of UK scientific advisers’ meetings show concerns about safety
Clive Cookson in London
Sage, the UK government’s science advisory group, today published minutes of its first 34 meetings on coronavirus, from late January to early May. The documents show the stress of trying to convey sound advice to ministers in the face of an epidemic that turned out to be far more serious than the advisors had imagined during their early discussions.
The most recent meeting for which minutes were released, on May 7, notes the need for and availability of “pastoral support” for Sage members. This related both to personal safely — some scientists felt vulnerable to verbal or physical attack — and overwork.
The scientists asked government to confine its requests for advice to matters that were really urgent. “This will help the resilience of participants of Sage who will continue to work under intense pressure on the Covid-19 response for many more months,” the minutes said.
A huge range of issues was covered in that one Zoom meeting. One was “bubbling” — allowing friends and family to meet in bubbles of limited size — which the scientists thought carried potential unforeseen risks. Another was the risk of “infection transmission in protests”, with Sage advising that as the lockdown was eased the health justification of remaining restrictions would need very clear communication to avoid potential public disorder.
Occidental Petroleum cuts dividend to one cent
Myles McCormick in London
Occidental Petroleum, the biggest onshore oil producer in the US, has slashed its dividend to just a penny as it struggles with a collapse in crude demand and price as a result of the pandemic.
The drop in the price of oil has ramped up pressure on a company already suffering under a heavy debt load accumulated in a $55bn deal to take over rival Anadarko last year.
Benchmark US oil prices are trading around $35 a barrel, down by about a half since the beginning of the year as global lockdowns sap demand. This has come as a massive blow to producers, many of whom are unable to turn a profit at this level.
Occidental, which is backed by Warren Buffett’s Berkshire Hathaway, had already cut its dividend from 75c to 11c in March and sought to slash costs. Mr Buffet – who holds preferred shares – took his dividend in the form of stock.
Shares in Occidental, already down more than 70 per cent this year, slipped 5 per cent following the dividend announcement.
Trump targets China in move to revoke Hong Kong privileges
Demetri Sevastopulo in Washington
Donald Trump said the US would revoke special trade privileges for Hong Kong and sanction officials from the territory and mainland China, worsening relations between Washington and Beijing that were already strained amid the pandemic.
The US president announced several measures targeting China on Friday after Beijing moved to impose new security laws on Hong Kong earlier this week.
Mr Trump said he would ban some Chinese nationals entering the US, in an effort to enhance national security and protect American scientific research. He said he would also order his team to examine the practices of Chinese companies listed in the US “with the goal of protecting American investors investment firms”.
Additionally, the US will withdraw from the World Health Organisation, the president said. Mr Trump has over the past few months blamed China and the global health body for the spread of the pandemic.
“This week China unilaterally imposed control over Hong Kong security. This was a plain violation of Beijing’s treaty obligations with the United Kingdom,” Mr Trump said about the 1984 Sino-UK joint declaration that paved the way for Britain to hand back its former colony to China in 1997.
The move will further stoke tension in the US-China relationship, which has become increasingly strained in recent months as Mr Trump has blamed the Chinese government for coronavirus.
US stocks ride back-to-back weekly gains to 12-week high
US stocks finished the week at a 12-week high, with investors extending the market’s recovery despite renewed tension between the US and China following Beijing’s move to impose new security laws on Hong Kong.
The S&P 500 overcame early declines to close 0.5 per cent higher on Friday at its highest since March 4. For the week, which was truncated by Monday’s public holiday, the benchmark added 3 per cent and notched its first back-to-back weekly gain since mid-April.
A switch to economically sensitive stocks propelled the S&P 500 on Wednesday to its first close above 3,000 since early March. Oil companies and banks were among those to gain, buoyed by the continued winding back of lockdowns by governments globally. Although those sectors did not fare so well during Friday’s session, the index has closed above the milestone level for the past three days.
The Nasdaq Composite rose 1.3 per cent to its highest since February 21 as tech stocks found favour, leaving the index up 1.8 per cent for the week.
Government bonds rallied, pushing yields lower. The benchmark 10-year US Treasury’s yield was down 0.05 percentage points to 0.65 per cent on Friday.
New Jersey and California lead latest rise in US Covid-19 deaths
The one-day coronavirus death rate in the US hovered above 1,000 for the third straight day, boosted by a jump in fatalities in California and New Jersey.
A further 1,186 people in the country died from Covid-19 over the past 24 hours, according to data compiled on Friday by the Covid Tracking Project. That is down from 1,353 on Thursday and is the slowest rate since May 23.
As the daily death rate in New York — which remains the hardest hit state overall — retreats and remains below 100 at a two-month low, the stubbornly lofty rates in other heavily affected states is becoming more visible.
California had the second-biggest one-day increase, with a further 95 deaths over the past 24 hours, up from 89 on Thursday and representing the state’s highest rate in just over a week. The state, which has recently begun to loosen lockdown restrictions, is the sixth-hardest hit, with a total of 4,068 fatalities.
The Golden State was sandwiched by New Jersey and Pennsylvania, which had 130 and 91 deaths over the past day, respectively. Those two are the second- and fourth-hardest hit states overall.
Since the pandemic began, 96,891 people in the US have died from coronavirus, according to Covid Tracking Project, which chooses not to count so-called probable deaths. Johns Hopkins University does include that category and puts the nation’s overall fatalities at 102,686.