Financial Times Europe - 20.03.2020

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Briefing

iDrugmakers join forces to find vaccine

Six of the world’s biggest drugmakers will jointly

work to try to find treatments and a vaccine to tackle

the virus pandemic. The groups include Roche,

Sanofi Pasteur and Johnson & Johnson.— PAGE 11

iCarriers seek air traffic payment delay

Airlines are pushing back on making payments to

Europe’s air traffic controllers, worth some €500m a

month, as they tackle a cash crisis from a virtual

shutdown of international travel.— PAGE 13

iFord dumps payout and taps credit lines

Ford has suspended its dividend

and drawn down $15.4bn from

two credit lines to bolster its

balance sheet, as the pandemic

forces it to shut plants in North

America and Europe.— PAGE 11

iLondon specialist trio’s oil punt pays off

Three energy hedge fund managers have made big

gains after betting on a fall in the oil price — this week

it sank under $25 per barrel for the first time in 17

years — hit by the Saudi-Russia price war.— PAGE 17

iBarnier tests positive for coronavirus

Michel Barnier, the EU’s chief negotiator on the UK’s

EU withdrawal, has tested positive for coronavirus,

becoming the first senior Brussels policymaker to

confirm that they have Covid-19.— PAGE 3

iSwedbank fined $400m for lax controls

The lender has been handed a record SKr4bn

($400m) fine for deficiencies in its anti-laundering

controls and for withholding documents from

Swedish and Estonian regulators.— PAGE 12

iItaly and Greece lead Europe debt surge

Eurozone bond prices soared as the ECB announced

a €750bn growth of its debt-buying plan to try to

contain the market fallout from the virus. Yields in

Italy and Greece were pulled sharply lower.— PAGE 17

Datawatch

FRIDAY 20 MARCH 2020 WORLD BUSINESS NEWSPAPER EUROPE

World Markets

STOCK MARKETS

Mar 19 prev %chg

S&P 500 2423.07 2398.10 1.

Nasdaq Composite 7173.53 6989.84 2.

Dow Jones Ind 20097.69 19898.92 1.

FTSEurofirst 300 1132.57 1096.46 3.

Euro Stoxx 50 2460.29 2385.82 3.

FTSE 100 5151.61 5080.58 1.

FTSE All-Share 2788.37 2764.48 0.

CAC 40 3855.50 3754.83 2.

Xetra Dax 8610.43 8441.71 2.

Nikkei 16552.83 16726.55 -1.

Hang Seng 21709.13 22291.82 -2.

MSCI World $ 1682.25 1772.93 -5.

MSCI EM $ 787.81 826.68 -4.

MSCI ACWI $ 402.73 424.21 -5.

CURRENCIES

Mar 19 prev

$ per € 1.070 1.

$ per £ 1.166 1.

£ per € 0.918 0.

¥ per $ 110.060 108.

¥ per £ 128.335 127.

SFr per € 1.053 1.

€ per $ 0.935 0.

Mar 19 prev

£ per $ 0.858 0.

€ per £ 1.090 1.

¥ per € 117.781 117.

£ index 74.397 75.

SFr per £ 1.148 1.

COMMODITIES

Mar 19 prev %chg

Oil WTI $ 25.42 20.83 22.

Oil Brent $ 28.27 24.88 13.

Gold $ 1498.20 1536.20 -2.

INTEREST RATES

price yield chg

US Gov 10 yr 1.12 -0.

UK Gov 10 yr 0.72 -0.

Ger Gov 10 yr 102.44 -0.20 0.

Jpn Gov 10 yr 0.09 0.

US Gov 30 yr 116.14 1.76 0.

Ger Gov 2 yr 105.60 -0.69 0.

price prev chg

Fed Funds Eff 1.58 1.55 0.

US 3m Bills 0.02 0.19 -0.

Euro Libor 3m -0.39 -0.40 0.

UK 3m 0.53 0.51 0.

Prices are latest for edition Data provided by Morningstar

BRENDAN GREELEY AND

DEMETRI SEVASTOPULO— WASHINGTON

The US faces a tsunami of unemploy-

ment claims as the number of people

losing their jobs surged in recent days

in states from Ohio to Pennsylvania,

overwhelming labour agencies as

cities shut down to halt the spread of

coronavirus.

A report by the US labour department

yesterday showed a steep rise in claims

for unemployment insurance: 281,

for the week that ended March 14, up

from 211,000 the previous week.

More recent numbers, confirmed by

individual states, are even starker. In

the first three days of this week, about

78,000 people in Ohio filed unemploy-

ment insurance claims, compared with

5,400 people for the full previous week,

according to Ohio’s labour department.

The situation was repeated in Penn-

sylvania, where 121,000 people filed

claims from Monday to Wednesday,

more than 10 times the number who

had filed for the whole of last week,

according to the state’s labour officials.

“In the 12 years I’ve been an elected

official, I’ve never been more inundated

than [in] the last three days,” said

Brendan Boyle, a Democratic congress-

man from Philadelphia. “It’s people

from all walks of life too.”

He said Philadelphia’s stagehands

union had gone from 100 per cent empl-

oyment two weeks ago to 2 per cent.

The perilous rise in numbers of claim-

ants in the rust belt states came one day

after Steven Mnuchin, Treasury secre-

tary, said the US jobless rate could soar

to 20 per cent. President Donald Trump

played down the warning, saying: “I

don’t agree with that [20 per cent].”

As the number of people who have

lost their jobs spirals upwards, unem-

ployment insurance claims have over-

whelmed the state agencies that admin-

ister the programmes, due to reductions

in staffing levels over the past few years.

The numbers that have emerged from

some states are far more dramatic than

even the claims made at the height of

the global financial crisis, when national

unemployment rose to 10 per cent.

“There’s no world where all 50 states

will be able to handle the influx,” said

Peter Ganong, a labour economist at the

University of Chicago. “One way to

think about the question is: are there

states able to handle the influx?”

Strains at state employment offices

are already clear, underlining how diffi-

cult it will be for any local or national

government to get cheques to citizens as

quickly as they will need the cash.

Rust belt states swamped by jobless

claims as US brings down shutters

©THE FINANCIAL TIMES LTD 2020

No: 40,353★

Printed in London, Liverpool, Glasgow, Dublin,
Frankfurt, Milan, Madrid, New York, Chicago, San
Francisco, Orlando, Tokyo, Hong Kong, Singapore,
Seoul, Dubai, Doha

AnalysisiPAGE 3

Testing slowed by lack of

kits and strained systems

Austria €3.90 Malta €3.
Bahrain Din1.8 Morocco Dh
Belgium €3.90 Netherlands €3.
Bulgaria Lev7.50 Norway NKr
Croatia Kn29 Oman OR1.
Cyprus €3.70 Pakistan Rupee
Czech Rep Kc105 Poland Zl 20
Denmark DKr38 Portugal €3.
Egypt E£45 Qatar QR
Finland €4.70 Romania Ron
France €3.90 Russia €5.
Germany €3.90 Serbia NewD
Gibraltar £2.90 Slovak Rep €3.
Greece €3.70 Slovenia €3.
Hungary Ft1200 Spain €3.
India Rup220 Sweden SKr
Italy €3.70 Switzerland SFr6.
Latvia €6.99 Tunisia Din7.
Lithuania €4.30 Turkey TL
Luxembourg €3.90 UAE Dh20.
North Macedonia Den

Six in 10 Britons

think it is not

acceptable during

the coronavirus

crisis to bulk buy

personal-hygiene

products such as

hand sanitiser,

non-perishable

foodstuffs such

as pasta and rice,

and goods such

as toilet roll

UK stockpiling

  

Personal-hygiene products

Cold & pain-relief medicine

Frozen foodstus

Long-life milk

Toilet roll

Vitamins

Not acceptable to bulk buy

Source: Ipsos Mori, Mar -

 who think the following items are

acceptable to buy in large quantities

Non-perishable food items

MILES JOHNSON— ROME
CHRIS GILES— LONDON,
MARTIN ARNOLD— FRANKFURT
JAMES POLITI— WASHINGTON

Italy’s premier has demanded the EU
use “the full firepower” of its €500bn
rescue fund to confront the continent’s
economic crisis, as he warned against
relying on monetary policy to counter a
“global shock that has no precedents”.
With coronavirus deaths in Italy over-
taking those in China, Giuseppe Conte
told the Financial Times it was time for
the European Stability Mechanism to
offer emergency credit lines to coun-
tries reeling from the pandemic.
“Monetary policy alone cannot solve
all problems; we need to do the same on
the fiscal front and, as I already men-
tioned, time is of the essence,” the Ital-

ian prime minister said. “The route to

follow is to open ESM credit lines to all

member states to help them fight the

consequences of the Covid epidemic.”

His call for Europe to tap the bailout

fund that it established for the eurozone

debt crisis was made as central banks

around the world tried to calm fearful

markets with a fresh round of aggressive

rate cuts and bond buying.

In the past 24 hours the European

Central Bank has revealed plans to buy

an additional €750bn of bonds, the US

Federal Reserve stepped in to shore up

the dollar funding market, and the Bank

of England cut rates to 0.1 per cent and

flooded the government bond market

with £200bn of printed money to shock

it back to life.

The central banks’ efforts have only

blunted the blow from the pandemic,

which has brought parts of the world

economy to a stop and sent the S&P 500

down almost 30 per cent in a month.

The latest initiatives helped calm

markets after a brutal week of trading.

The S&P 500 was up about 2 per cent,

while the Europe-wide Stoxx 600 com-

posite also gained more than 2 per cent.

The new Bank of England governor,

Andrew Bailey, said the volatile markets

were “bordering on disorderly” during

“an absolutely unprecedented situa-

tion”. Earlier this week he said that mar-

kets would need to be shut if they

became disorderly.

Christine Lagarde, ECB president,

called her fellow rate-setting officials

into an emergency session on Wednes-

day to increase the size and scope of its

action, just days since the bank unveiled

its initial response to the crisis.

The US Fed yesterday broadened

the swap lines it set up to boost US

dollar funding markets to additional

countries, from Brazil and Australia to

Denmark and Sweden. The Fed had

already set up similar swap lines with

the ECB, the Bank of Japan and the BoE

on Sunday.

The move was intended to help cen-

tral bankers deal with the financial

stress from the sharp rise in the dollar,

the world’s reserve currency.

In less than five days, the Fed has also

slashed its main interest to near zero,

announced $700bn in asset purchases

and revived three big lending facilities

designed to shore up credit markets that

it used during the 2008 financial crisis.

Italy tells EU to unleash €500bn

rescue fund to fight coronavirus

3 Conte wants bailout reserve tapped 3 Central banks ease rates 3 Bond buying increased

3 Virus reports

Pages 2-

3 Editorial

Comment &

LettersPage 8

3 Opinion:

Chris Giles,

Gillian Tett &

Philip Stephens

Page 9

3 LexPage 10

3 Corporate

fallout

Pages 11-

3 Markets

Pages 19 & 20

Inside

Coronavirus: the

economic cure

3 Christine Lagarde‘Monetary policy has a vital role to play’

3 Philip Stephens‘Centres of global power must work hand in hand’

3 Gillian Tett‘Toilet rolls and Treasury bonds tell the same story’

OPINION, PAGE 9

Deserted: New York’s

Times Square emptied

by the outbreak

Jeenah Moon/Reuters

MARCH 20 2020 Section:FrontBack Time: 19/3/2020 - 19: 06 User: julian.summers Page Name: 1FRONT USA, Part,Page,Edition: EUR, 1, 1