(Bloomberg) -- China rejected U.S. President Donald Trump’s claim that Beijing was trying to damage his re-election chances with its handling of the coronavirus outbreak. Spain recorded steep declines in new cases, Germany is set to extend restrictions, and Britain will probably miss its daily testing target.
The European Central Bank intensified its response to the crisis as shutdowns pushed the region’s economy into a record contraction, and President Christine Lagarde gave a dour projection for this year. Millions more Americans filed for unemployment benefits.
The U.S. government’s top infectious-disease expert, Anthony Fauci, said he expects an FDA decision on remdesivir relatively soon. Gilead has more than 50,000 courses of the experimental Covid-19 therapy ready to ship as soon as the drug is authorized for emergency use by U.S. regulators.
Key Developments
Virus Tracker: global cases exceed 3.2 million; deaths top 228,000Dueling data on Gilead treatment leaves many questionsDead coronavirus particles muddy outcome of test resultsChina data shows global slump undercut nascent recoveryWorld embraces contact-tracing technology to fight Covid-19Road to easing lockdowns is paved with economic trade-offs
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Euro-Area Economy Could Shrink as Much as 12%: Lagarde (8:36 a.m. NY)
The economy could shrink from 5% to 12% this year, Lagarde said during the opening statement of the ECB’s monetary policy press conference in Frankfurt.
The ECB unveiled a further facility to inject liquidity into the economy after data showed the worst three-month contraction in a quarter of a century of data. It delivered a new lending salvo that includes a so-called “PELTRO” measure to further assist growth, and will keep asset purchases and interest rates unchanged.
The bank said the lowest interest rate on a program that gives banks incentives to lend to companies and households will fall to 50 basis points below the deposit rate, currently at -0.5%. Interest on the new, non-targeted facility will be 0.25% below the main refinancing rate that currently is zero.
Singapore Cases Must Ease Before Economy Restarts (7:41 a.m. NY)
Singapore Prime Minister Lee Hsien Loong cautioned that things won’t ever get back to the way they were before. He warned “significant structural changes” to the economy are likely even after the virus abates, with some industries disrupted permanently, companies having to change their business models to survive and some jobs simply disappearing. Many workers will have to accept pay cuts so their companies can survive, he said.
When Singapore does reopen, it won’t happen all at once, Lee said. Rather, it will reopen step by step, with critical industries and those connected to global supply chains going first. Places that draw crowds, such as entertainment outlets and large-scale sporting events, will have to wait.
Germany Sets Out Terms For Lufthansa Aid (7:35 a.m. NY)
Deutsche Lufthansa AG is expected to accept a significant government stake and state veto rights in exchange for a multibillion-euro package of assistance, according to people familiar with the matter.
While details are still being negotiated, the economy and finance ministries have ironed out disagreements that dragged on for weeks. The plan foresees Germany taking a least a 25% stake in the airline and receiving at least one seat on the firm’s supervisory board, the people said. The assistance could run to 10 billion euros ($11 billion).
Children May Be Just as Infectious as Adults (7:30 a.m. NY)
Children with the new coronavirus may be as infectious as adults, according to a study from Germany that recommends caution against an unlimited reopening of schools and kindergartens.
While children have a lower risk of developing severe illness from Covid-19, they may be no less capable of spreading it. Levels of virus in the respiratory tract -- the main route via which the pathogen is transmitted -- don’t appear significantly different across age groups, Christian Drosten, director of the Institute of Virology at Berlin’s Charite hospital, and colleagues found.
The WHO says more research is needed on the topic. For now, household transmission studies indicate that children are less likely to transmit Covid-19 to adults than the reverse, WHO epidemiologist Maria Van Kerkhove told reporters in Geneva on Wednesday.
Conoco Deepens Production Cuts (7:21 a.m. NY)
ConocoPhillips estimates that it will voluntarily curtail production by 420,000 net barrels per day. Cuts for May are estimated to be 230,000 barrels per day. Future decisions to curtail will be made on a month-to-month basis.
Shell, Europe’s largest oil company, earlier cut its dividend for the first time since at least the Second World War and signaled demand may not fully recover once the pandemic is over.
Fauci Expects FDA Decision on Remdesivir Soon (7:15 a.m. NY)
“It’s going to be really quickly,” Anthony Fauci, the head of National Institute of Allergy and Infectious Diseases, said on NBC’s Today Show about an emergency use authorization on remdesivir.
He said he spoke to the FDA Commissioner last night and they haven’t made a final decision but Fauci expects one relatively soon. “I do,” he said separately, when asked if a vaccine for coronavirus in January is in the realm of possibility.
McDonald’s Flags ‘Dramatic’ Changes in Behavior (7:10 a.m. NY)
The global crisis caused by the Covid-19 pandemic has significantly disrupted business, the company said. “The resulting operational impact brought on by several related factors, including restaurant closures, limited operations and dramatic changes in consumer behavior, led to a marked decline in sales during the second half of March and significantly affected the company’s first quarter results.”
Nissan Sunderland Production Won’t Start Until June (7 a.m. NY)
Vehicle Production at Nissan’s U.K. Sunderland plant will continue throughout May, and the company is currently planning a phased resumption of production in early June. Output has been suspended since March 17. The majority of employees at the plant will remain furloughed.
That comes as manufacturers from Volkswagen AG to Renault SA and Daimler AG are restarting factories in Europe with little visibility about how much actual demand there will be once customers emerge from restrictions. Aston Martin said last week it intends to reopen its St. Athan factory in Wales on May 5, while operations at its main site in Gaydon, England, “are planned to resume later.”
Japan’s Abe Signals Plans to Extend Emergency (6:45 a.m. NY)
Japanese Prime Minister Shinzo Abe signaled that he plans to extend a national state of emergency, saying that current conditions make it difficult to stick to the current end date of May 6. Abe told reporters in Tokyo it would be difficult to return to the previous way of life on May 7. The country’s parliament passed a $240 billion extra budget for this fiscal year, securing part of the funding for a record stimulus package and clearing a major hurdle for aid getting to small businesses.
Separately, Fuji News Network reported that Japan will call for creating a joint fund to combat the pandemic at a teleconference later in the day by Group of Seven finance chiefs. The fund’s main role would be helping make medicines and vaccines against the illness widely available in the world.
Continental Shelves Unit Spinoff (6:36 a.m. NY)
Continental AG said it’s postponing the planned spinoff of its Vitesco powertrain division due to market disruptions sparked by the coronavirus crisis. Continental won’t put the transaction up for a vote at its July 14 shareholder meeting, but still plans to pursue the spinoff at a later stage. Vitesco makes engine components, electronics and sensors.
Study Suggests Third of U.K. Covid-19 Hospital Patients Die (5:35 p.m. HK)
About a third of patients in U.K. hospitals with Covid-19 died from the disease, according to the findings of a study of more than 16,000 people with the virus. The research, which hasn’t been peer-reviewed and has yet to appear in a scientific journal, is an early insight into the deadliness of the virus in the U.K., which has one of the highest tolls from the pandemic in Europe.
Led by researchers from Edinburgh University, Liverpool University and Imperial College London, the study pulled information from 166 hospitals in England, Wales and Scotland about Covid-19 patients.
Italy May Remove More Curbs (5:22 p.m. HK)
Prime Minister Giuseppe Conte is preparing to further ease Italy’s lockdown beginning in mid-May if there is no spike in new virus cases. “We could continue easing the restrictive measures” by mid-May Conte said in parliament on Thursday. “If the contagion curve doesn’t grow, we are going to allow reopenings of shops, restaurants and services,” the premier said, warning that the country is not “free of pandemic yet.”
Spain Records Fewest Deaths in Six Weeks (5:16 p.m. HK)
Spain recorded steep declines in the number of new coronavirus deaths and cases, as the nation begins gradually relaxing a strict lockdown regime after weeks of confinement. The number of fatalities rose by 268 to 24,543 in the 24 hours through Thursday, the smallest increase in six weeks and compared with Wednesday’s of 325, according to Health Ministry data. Total infections rose by 1,309 to 213,435 after the previous day’s gain of 2,144.
Indonesia Cases Top 10,000 (5:13 p.m. HK)
Indonesia’s coronavirus cases exceeded 10,000 as infections showed no signs of slowing even with partial lockdowns and travel restrictions in the nation’s main cities. The number of confirmed cases rose by 347 to 10,118 on Thursday with the death toll jumping to 792.
While the number of people infected in the world’s fourth-most populous nation is fewer than those in China, India and Singapore, it has the highest mortality rate in the region, according to data from Johns Hopkins University. Confirmed cases have soared more than six-fold in April alone after the country reported its first cases only in early March.
Germany Could Help Neighboring Countries Test (5 p.m. HK)
Germany’s testing labs could in theory use some of their extra capacity to process samples from other European countries, Lothar Wieler, director of the Robert Koch Institute, said at a briefing in Berlin.
Some large laboratory groups span several countries, Wieler said. Though German labs processed about 467,000 coronavirus tests last week, they had capacity to process twice as many. RKI, the German public-health authority, is also encouraging doctors to test more. “The earlier we test, the better,” Wieler said.
Separately, the Netherlands declined an offer from a German lab to increase the country’s testing capacity by about 5,000 a day for a two-month period, Dutch broadcaster NOS reported, citing a spokesman for the diagnostics task force. The offer was made about two weeks ago and would have added to the country’s current capacity of about 7,000 daily tests.
Germany Poised to Prolong Most Curbs (4:40 p.m. HK)
German officials signaled there won’t be a significant further easing of restrictions on public life for at least another week as data showed coronavirus infections in Europe’s biggest economy rose the most in four days.
Chancellor Angela Merkel is due to consult with state premiers later on Thursday on whether to lift more of the curbs imposed to stop the disease from spreading. Helge Braun, who heads Merkel’s office, said limits on public contact will be extended at least until May 10, in line with a strategy already adopted by regions including Bavaria.
Both Braun and Stephan Weil, the premier of Lower Saxony, said that officials want to wait for data on the impact on the outbreak of this week’s reopening of some shops.
U.K. Concedes It Won’t Hit Testing Target (4:16 p.m. HK)
Justice Secretary Robert Buckland said on Thursday the government is unlikely to meet its deadline for carrying out 100,000 daily Covid-19 tests by the end of April. Capacity has dramatically increased, but officials have struggled to get people to testing centers. About 52,000 tests were carried out on Tuesday.
Prime Minister Boris Johnson will return to lead the U.K.’s daily televised coronavirus briefing on Thursday, with his government weighing options for easing a nationwide lockdown that officials warned will not be lifted any time soon. An effective testing regime is a crucial piece in the track-and-trace strategy outlined by officials to enable some lockdown restrictions to be lifted, as the government seeks to rebuild the battered U.K. economy.
Two-thirds of U.K. firms have applied to make use of the government’s wage subsidy program -- an indication of the widespread impact on businesses. More than half of firms that continue to trade reported a drop in turnover between April 6 and 19, with 1 in 4 saying it had dropped by more than half.
Separately, as part of a home testing program to track community spread across the U.K., 100,000 randomly selected people from 315 local authorities across England will be invited to provide nose and throat swabs.
China Says Not Interested in Interfering in U.S. (3:48 p.m. HK)
China has no interest in interfering in internal U.S. affairs, Foreign Ministry spokesman Geng Shuang said after Donald Trump blamed Beijing’s response to the coronavirus outbreak on a desire to see him lose in November. Geng said China is a victim of the virus, “not an accomplice”
Trump -- speaking in an Oval Office interview with Reuters published Wednesday -- didn’t provide evidence to support the claim that China would deliberately mishandle an outbreak that has killed more than 4,600 of its citizens. The president said that he was considering various ways to punish the Chinese government, which he has blamed for allowing the virus to spread across the world.
“China will do anything they can to have me lose this race,” Trump said in the interview. He didn’t say what punitive actions he might take, but added: “There are many things I can do.”
AstraZeneca to Partner With Oxford on Vaccine (2:32 p.m. HK)
AstraZeneca Plc agreed to make and distribute the a potential vaccine against the coronavirus pandemic that Oxford University scientists are working on. The experimental shot is already in early clinical tests and could reach late-stage trials by the middle of the year, ranking as one of the most advanced vaccine projects. Astra said in an email on Thursday it would pick up the development as well as manufacture and distribute the product.
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