Daily FX volumes soar to record $2.2 trln in March – CLS

LONDON, April 9 (Reuters) – Average daily foreign exchange trading volumes rocketed 18% year-on-year in March to a record $2.2 trillion, CLS said in a statement on Thursday, as panic over the coronavirus sent currency prices moving wildly.

ClS, a major settler of trades in the foreign exchange market, said five of the 50 largest all-time daily spot volumes came in March, with monthly record volumes in euro/dollar, dollar/yen, sterling/dollar and the U.S. dollar against the Swiss franc and Canadian currency.

Forex trading volumes are closely linked to levels of volatility, as more dramatic market moves encourage more trading.

“The multiple nationwide lockdowns had a significant impact on investor sentiment which led to sharp stock market movements in both directions,” said CLS’s Head of Information Services, Masami Johnstone.

“As a result, the market saw significant demand for dollars as a safe haven. The exchange rates of those currencies that CLS settles against the dollar also experienced the most significant monthly movements of the last decade, an average absolute daily percentage change of 1.14%, almost double the previous monthly high.”

On a monthly basis, FX turnover was up 21% from February 2020. (Reporting by Tommy Reggiori Wilkes; Editing by Saikat Chatterjee)

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UPDATE 1-Brazil central bank eyes up to 1 trillion reais of private sector assets for purchase

(Adds details)

By Jamie McGeever

BRASILIA, April 9 (Reuters) – The value of private sector financial assets potentially available for Brazil’s central bank to buy under new, emergency rules could total almost 1 trillion reais ($197 billion), the bank’s president Roberto Campos Neto said on Thursday.

In a presentation to senators posted on the bank’s website, Campos Neto outlined a range of assets including debentures and mortgage loans that it could potentially buy as part of its new toolkit to ensure financial markets have sufficient liquidity, function smoothly, and provide credit where it is needed.

The 972.9 billion reais list of assets, however, will not include equities or investment funds, according to the presentation.

And the list did not include government bonds, which the constitutional amendment awaiting final congressional approval will authorize, effectively paving the way for “quantitative easing”, or QE.

Campos Neto noted that the scramble for liquidity in times of crisis affects the cost of borrowing for even the strongest companies. Central bank and government intervention can have positive repercussions “for the entire system,” he said.

“Central banks in emerging countries may need to act as the ‘buyer of last resort’ – several are taking steps in this direction,” Campos Neto said.

Campos Neto reminded senators that the central bank’s measures to provide liquidity to financial markets and improve the flow of credit throughout the economy come to 1.2 trillion reais, or 16.7% of gross domestic product.

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Slovakia closes off five Roma settlements due to coronavirus

BRATISLAVA (Reuters) – Slovakia has closed off several Roma settlements in the eastern part of the country after reports of a cluster of coronavirus cases in five of them, highlighting difficulties faced by Europe’s largest ethnic minority during the pandemic.

Roma communities across eastern Europe are impoverished, plagued by high unemployment and historically the target of discrimination, and the coronavirus outbreak has many feeling more vulnerable.

In Bulgaria, some Roma have complained of being locked in ghettos because of strict curbs on movement. In Hungary, Roma leaders said this week the pandemic threatened their already precarious living conditions.

Slovakian Prime Minister Igor Matovic announced on Wednesday that at least 31 people had tested positive for the coronavirus. The Slovak authorities said they would ensure food deliveries and access to healthcare in the enclaves, despite restrictions on movement.

“The measure came into force at midnight. It applies to five locations in two villages and one town,” said Renata Hudakova from the regional public health authority in Spisska Nova Ves.

Slovakia started widespread testing in Roma settlements on April 3 amid concerns crowded living conditions and inadequate hygiene could accelerate infections.

“It is not a hostile act. We want to protect people who are in quarantine as well as those who were in contact with them,” Matovic told the media in the town of Krompachy, where three of the closed settlements are located.

Andrea Najvirtova, head of the rights group People in Need, expressed concern over deepening poverty in the Roma areas as a result of the quarantine as well as nationwide curbs on public life.

“They live in poverty and many have lost their sources of income, such as seasonal work, and their children had free meals in schools, which are now closed. The measures should take this into account,” she said.

Slovakia has identified more than 1,000 locations with 260,000 inhabitants it considered at high risk because of high density of population and poor living conditions.

Officials say that hundreds of Roma returning from western Europe in recent weeks may have arrived infected with the novel coronavirus.

“(It) will spread much faster in the Roma communities,” said Peter Pollak, member of the European Parliament from Matovic’s Ordinary People (OLANO) party and of Roma origin.

Slovakia has reported 682 cases of the coronavirus and two deaths, with 101 new cases reported on Tuesday.

Slovakia has already banned international passenger transport, closed schools and most shops and banned all public events. The government also restricted free movement of people as of Wednesday until next Monday, to curb internal travel during Easter holidays in the majority-Catholic country.

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Another 6.6. million U.S. workers applied for unemployment last week including 45k in Colorado

The blistering pace of new unemployment filings in the U.S. continued last week when another 6.6 million people applied for financial support, according to numbers released Thursday morning by the U.S. Department of Labor.

It’s a figure that brings the country’s three-week total to roughly 16.8 million claims as the COVID-19 pandemic continues to wreak havoc on medical systems and the economy. Roughly 10% of U.S. workers have lost their jobs in the last three weeks, the fastest and largest decline on records that date back to 1948.

The 6,606,000 unemployment claims reported to the department of labor for last week mark a 261,000-worker decline from the week prior. Numbers for the week ending March 28 were revised upward. Almost 6.9 million Americans filed for benefits that week.

In Colorado, initial claims volume last week slowed down from the record-shattering 61,838 filed during the week ending March 28, according to statistics provided to the U.S. Department of Labor Still, the 45,494 people who filed for unemployment insurance last week is the second-highest single week total on record.

Over the last three weeks, 127,077 people have filed claims in the state. Just 102,000 people did so over the entirety of 2019, state labor economist Ryen Gedney said last week.

There is little sign that things will be getting back to normal in the near future. Many Colorado school districts have announced students will not return to the classroom this spring, and Gov. Jared Polis has extended a statewide stay-at-home order until at least April 26. At least 14 large companies have announced mass layoffs in the state this week, including ski industry giant Vail Resorts.

Some economists predict up to 20 million Americans will lose their jobs this month, a total that would set new records for national unemployment levels.

The Associated Press contributed to this report.

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Morgan Stanley CEO James Gorman recovers from COVID-19

(Reuters) – Morgan Stanley’s (MS.N) Chief Executive Officer James Gorman said he has fully recovered from the illness caused by the novel coronavirus, according to a video that was sent to the bank’s employees on Thursday.

Gorman released the 10-minute video to staff by email in which he said he had tested positive for coronavirus and had been fully cleared by doctors more than a week ago.

Gorman is currently undergoing self-isolation at home and working remotely, according to the video.

A Morgan Stanley spokesman confirmed the contents of the video, adding the development was not considered to be material because Gorman was not incapacitated at any time.

The board of Morgan Stanley was informed when he was confirmed positive for the disease, the spokesman added.

The bank had not publicly disclosed earlier that Gorman had tested positive for the respiratory disease.

Gorman said in the video he began experiencing flu-like systems in mid March. He later tested positive for the disease, but was able to continue to work from home as he was not incapacitated, he said.

The bank held daily operating committee calls since the positive coronavirus test and Gorman led every call, the spokesman added.

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'Sadness in my heart': Residents of China's Hubei, freed from lockdown, face suspicion

BEIJING (Reuters) – Driving to a factory in China’s southeastern province of Fujian to meet a friend, Ye Jing was stopped by a security guard soon after returning from two months of lockdown in Hubei, the province hardest hit by the coronavirus outbreak.

“His whole manner and actions changed,” the shoe factory manager said, after the guard spotted her Hubei licence plate and asked where she was from.

“He immediately went to put on gloves and distanced himself from me. And he wouldn’t let me in.”

Ye reassured the guard that she had tested negative for the virus, but he responded, “I don’t trust your test results.”

She added, then, “I really felt sadness in my heart.”

Ye is just one of many people from the central province who say they face fear and rejection after its capital of Wuhan lifted on Wednesday a lockdown against the virus that had stretched more than two months.

The move allowed those with a green health code, a QR code that contains their health information, to leave the city. Curbs elsewhere in Hubei were lifted late last month. [nL4N2BW044].

But since leaving, say many Hubei residents, they have faced discrimination in the job search.

“When they see I’m from Hubei, they immediately say sorry, or they directly say you’re not suitable,” said a 25-year-old from the province, who would give only her last name, Li.

She said she had sent her resume online to nearly 50 firms since mid-March, after a job offer fell through during the outbreak, which has spread globally since emerging in China last year to infect 1.4 million and kill 83,400 worldwide.

News reports and social media posts reveal many instances of stricter treatment for Hubei people, whether landlords who refuse to rent to them or tougher quarantine measures.

Li Guoqiang, a Hubei lawyer who offers free advice to those facing discrimination, said he understood employers’ concerns, given the potential impact if staff caught the virus.

“If there’s a single case in returning to work, then a whole company must stop,” Li said.

‘HUBEI PEOPLE ARE NOT A VIRUS’

Chinese state media have lauded people from Wuhan and Hubei as heroes. In late March, an anchor for state broadcaster CCTV hosted a segment urging people not to discriminate against those from Hubei but show them “kindness and understanding” instead.

“Hubei people are not a virus,” was the phrase around which CCTV built a social media campaign.

As more people leave Hubei and China’s economy returns to normal, many have recently become worried about the risk from “silent carriers”, or those who don’t show symptoms, cases that China only began reporting last week.

Ye Xiaotian, 25, who recently returned to the southern city of Xiamen from his hometown in Hubei said he waited 30 minutes to be interviewed for a job at an internet marketing firm, Xiamen Piaoxue Internet Technology Inc. on April 1.

Then he was told it was not accepting candidates from Hubei.

“They said the epidemic situation is quite severe and Hubei people are coming from a place where the epidemic is quite severe,” Ye added.

Xiamen requires a virus test for arrivals from Hubei, which Ye had done at a central facility that cleared him to go about his daily activities. But that was not enough to allay the fears of those worried about test accuracy.

“He didn’t tell us he was from Hubei,” said a man who described himself as a project leader at the firm.

“We would have told him immediately, don’t come here now,” the man, who gave his surname as Wang, told Reuters. “If he came after 14 days, it would be OK.”

Interactive graphic tracking global spread of coronavirus: open tmsnrt.rs/3aIRuz7 in an external browser.

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May is crunch time for U.S. auto suppliers amid coronavirus shutdown

DETROIT (Reuters) – Auto parts maker Kevin Clay landed a series of new contracts from customers early this year, and was bullish on 2020 after two challenging years.

“I had the audacity or stupidity to say in January ‘I can’t imagine what could happen this year that could slow us down,’” said Clay, president and third-generation owner of Grand Rapids, Michigan-based Pridgeon & Clay, which supplies stamped steel and stainless steel parts to automakers and which has annual revenue of close to $350 million.

But now, with much of the United States at a standstill due to the coronavirus outbreak, one of the company’s two U.S. plants is idled and the other has a skeleton staff producing parts for commercial trucks. Pridgeon & Clay is juggling pressure from lenders, automakers and its own suppliers, gambling that automakers can restart North American production by mid-May before the auto parts maker’s money begins to run out.

“If we weren’t working on special deals with our suppliers, with our customers and with our banks, then the music would stop for us some time in mid-May, as it will for virtually everybody,” Clay said.

Suppliers and restructuring experts say major automakers are still paying bills, and suppliers received checks recently for goods shipped in February and March before factories shut down.

The real crunch for suppliers will come by mid-May. That is when the cash backlog runs out unless automakers are able to restart assembly lines, industry executives and consultants said.

Fiat Chrysler Automobiles NV (FCA) (FCHA.MI) (FCAU.N) and Honda Motor Co Ltd (7267.T) said this week they aim to gradually restart production in early May. General Motors Co (GM.N) and Ford Motor Co (F.N) have not set reopening dates. Some Asian and European automakers are aiming to restart U.S. production later this month.

“If the auto industry starts back up in early May, most suppliers should be able to turn the lights back on,” said Steve Wybo, a senior managing director at consultant Conway MacKenzie. “But the longer the shutdown lasts, the harder it will be for them to get the lights on.”

STRONG STARTING POSITION

Many larger auto suppliers were in better shape financially when the coronavirus shutdowns came than they were when the 2008-2009 financial crisis hit.

But Laurie Harbour, CEO of Harbour Results Inc, a manufacturing consulting firm that works with suppliers, said she is concerned about smaller companies farther down the supply chain.

“If you weren’t strong going into 2020, your challenges are going to be significant for the balance of the year to get yourself back up to speed.”

Suppliers like Bob Roth are counting on a return to work by May.

In March, Roth and his staff at RoMan Manufacturing took swift action as the COVID-19 crisis intensified. The Wyoming, Michigan, maker of transformers for automotive and other industries is classed as an essential business, so it remains busy as demand for robots that use their transformers remains high.

But staying open has come at a cost. Roth, co-owner and CEO of RoMan, had to raise pay for many of his 150 workers by $7 an hour to compete against enhanced unemployment benefits included in the recently passed federal relief package.

He is also providing health insurance to workers staying at home to take care of their children or cope with other health issues.

One of Roth’s critical suppliers in Pennsylvania is under lockdown due to the COVID-19 pandemic. Roth has just four to six weeks’ supply of that product and his team has figured out a way to make it in-house. But the part would cost $50 versus the $10 he pays his supplier – money he cannot recoup from customers.

“We’re willing to take the margin hit now to keep the business moving forward,” Roth said. “But at some point in time, we won’t be able to support higher wages or healthcare benefits for people who aren’t working.”

‘WATCHING OUR SUPPLY BASE CAREFULLY’

The global auto supply chain is robust, but automakers can still rely on a single supplier for a key part. Automakers and big top-tier suppliers will need to use some of their cash to prop up small but critical suppliers, industry executives and consultants said.

Last week transmission maker Delphi Technologies Plc (DLPH.N) identified up to 40 suppliers now experiencing financial difficulties, CEO Rick Dauch said.

“In two cases we’ve gone in and given them some financial assistance, either by buying their raw materials for them or expediting payment to them so they can pay their bills,” Dauch said.

BorgWarner Inc (BWA.N) last week threatened to walk away from a $951 million deal to buy Delphi, after Delphi tapped its $500 million revolving credit facility to help weather the pandemic without its acquirer’s approval.

Scott Turpin, CEO of North America for Aisin Seiki Co Ltd (7259.T), the world’s largest transmission maker, said one of his main concerns is how well suppliers farther down the chain conserve cash.

“Unfortunately there will be some suppliers that cannot survive this,” Turpin said. “So we’ve all got to watch that very closely.”

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Cash-strapped Virgin Australia grounds almost all domestic flights amid virus crisis

SYDNEY (Reuters) – Virgin Australia Holdings Ltd (VAH.AX) said on Thursday it would ground all domestic flights, except a single daily Sydney-Melbourne service through June 15, as it continues to seek government aid to weather the coronavirus crisis.

Australia’s second-biggest airline has asked the government for a A$1.4 billion loan that could be converted to equity in certain circumstances.

To date such aid has not been forthcoming and ministers have said that any help is likely to be on an industry-wide basis rather than specific to Virgin.

Virgin is in a financially weaker position than its larger rival Qantas Airways Ltd (QAN.AX) and lacks an investment grade credit rating.

“As a result of government restrictions, less people are travelling and we have made changes to our schedules to reflect this,” Virgin said of the latest capacity reduction.

Virgin had already cut all international flights except government rescue charters, put most of its workforce on leave and permanently cut all pilots at low-cost arm Tigerair Australia and all crew based in New Zealand.

It will continue local and international cargo flights, the airline said.

Virgin’s shares are tightly controlled by a group of foreign airlines including Singapore Airlines Ltd (SIAL.SI), Etihad Airways and Chinese conglomerate HNA Group that have also seen a sharp deterioration in revenues due to the coronavirus crisis.

The Australian government has already announced some aid to the broader airline industry, including refunding and waiving charges such as domestic air traffic control fees worth A$715 million and A$198 million in support for regional aviation.

The novel coronavirus has infected about 1.5 million people globally, while over 87,000 have died, disrupting lives and businesses as governments impose lockdowns to curb the outbreak.

For an interactive graphic tracking the global spread of the virus: open tmsnrt.rs/3aIRuz7 in an external browser.

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President Halimah assents to draw on $21 billion from past reserves for historic Resilience and Solidarity Budgets

SINGAPORE – President Halimah Yacob has given her assent to the Resilience and Solidarity Budgets, including a draw of up to $21 billion from Singapore’s past reserves.

Assenting to the revised Supplementary Supply Bill on Thursday (April 9), an act which formally authorises the Resilience and Solidarity Budgets announced in March and April respectively, Madam Halimah said the Government’s support measures should be rolled out quickly given the escalating Covid-19 pandemic, which has impacted economies, societies and livelihoods.

“It is important that we cushion this impact for Singaporeans, and help everyone tide through this challenging period,” she said in a Facebook post.

“The situation is still extremely fluid, so it is important that we implement the measures well, yet remain responsive to the changing needs on the ground.”

On Monday, an additional $5.1 billion was announced to cushion the impact of the Covid-19 circuit breaker measures, which will see most businesses and all schools shuttered until May 4.

Together with the Unity Budget announced in February, the Resilience and Solidarity Budgets have some $59.9 billion in support measures to deal with the impact of the outbreak.

The country will chalk up its largest Budget deficit ever at $44.3 billion. Both the size and close timing of the announcements are unprecedented in Singapore’s history.

Madam Halimah, who as President is responsible for protecting Singapore’s past reserves, has held several rounds of discussions with Prime Minister Lee Hsien Loong and Deputy Prime Minister Heng Swee Keat since February.

While they agreed there was no need to draw on past reserves then, given the scale of the support package envisaged at the time, the issue was revisited in March after the World Health Organisation declared Covid-19 a global pandemic. The President gave her in-principle support to draw on past reserves to fund part of the second support package.

Following the spike in local cases in late March and early April, she discussed with PM Lee and Mr Heng the need to provide additional support, in view of the further economic impact caused by the impending circuit breaker measures.

After Parliament debated and passed the revised Supplementary Supply Bill on April 7, the Supply Bill was sent to Madam Halimah for assent.

Following her assent, the Bill will be enacted into a law called the Supply Act, which controls the Government’s spending in the coming financial year.

This will be the second time the Government has drawn on past reserves and the largest amount to date, eclipsing the $4.9 billion then President S R Nathan approved during the 2008-2009 global financial crisis.

“We are able to do this decisively because of the substantial reserves built up over the years,” said Madam Halimah. “We should be thankful for the discipline of our forebears in spending prudently and saving up in the past.”

This year’s Budget and two waves of supplementary measures have seen new and enhanced schemes relating to jobs and wage support, cash handouts to households to defray living expenses, and help for the self-employed.

Examples include a Jobs Support Scheme to cover 75 per cent of all local employees’ wages this month, up to a salary ceiling of $4,600, and a Self-Employed Person Income Relief Scheme that will disburse $9,000 in cash over nine months to eligible self-employed people.

Last Friday, Madam Halimah had said that the next few weeks will be critical in the fight against Covid-19.

“It is crucial that all of us comply with safe distancing measures, even though they may be inconvenient in the near term,” she said.

Urging Singaporeans to stay home to stay safe, she added: “If we stand united as a nation, I am confident that we will be able to weather this storm together and emerge stronger as one people.”

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Taiwan rejects as 'groundless' accusations it attacked WHO chief

Taipei says Tedros’ claim that racist slurs against him had originated from Taiwan are ‘imaginary’ and ‘irresponsible’.

Taiwan’s has condemned what it described as “groundless” accusations from the head of the World Health Organization (WHO) that racist slurs against him had come from the island, amid deteriorating relations with the UN’s health agency.

In a statement on Thursday, the territory’s Foreign Ministry expressed “strong dissatisfaction and a high degree of regret, and raised the most solemn protest”. Taiwan is a “mature, highly sophisticated nation and could never instigate personal attacks on the director-general of the WHO, much less express racist sentiments,” it added. 

More:

  • Politics of coronavirus: Taiwan, China and WHO

  • How to control the spread of the coronavirus: Lessons from Taiwan

  • Coronavirus: How much more time are people spending at home?

Taiwan’s 23 million people have themselves been “severely discriminated against” by the politics of the international health system and “condemn all forms of discrimination and injustice,” the statement said.

Taipei has been barred from the United Nations and the WHO, due to pressure from China which claims the island as its own and even stripped of its observer status at the annual World Health Assembly. 

On Wednesday, WHO Director-General Tedros Adhanom Ghebreyesus accused Taiwan’s foreign ministry of being linked to a months-long campaign against him amid the COVID-19 pandemic. At a press briefing, Tedros said that since the emergence of the novel coronavirus, he has been personally attacked, including receiving at times, death threats and racist abuse.

“This attack came from Taiwan,” said Tedros, who is a former Ethiopian health and foreign minister and the WHO’s first African leader.

He said Taiwanese diplomats were aware of the attacks but did not dissociate themselves from them. “They even started criticising me in the middle of all those insults and slurs,” Tedros said. “I say it today because it’s enough.”

‘Groundless, imaginary’

The accusations were “groundless” and “imaginary”, Taiwan’s foreign ministry said, calling on Tedros to apologise for his “irresponsible” comments.

Taiwan condemns any form of discrimination and any attacks on the internet against the WHO’s boss have nothing to do with Taiwan’s Foreign Ministry nor have been instigated by it, the ministry added.

Taipei has been proud of its early and so far effective measures against the coronavirus, logging just 379 cases and five deaths to date, far lower than many of its neighbours.

Taiwan has never been ruled by China’s Communist Party, but Beijing claims the island and has long blocked it from the UN and membership of its agencies.

Taiwan says the WHO ignored its questions at the start of the coronavirus outbreak and has not shared with member states information Taiwan provided on the coronavirus, including details on its cases and prevention methods.

The Geneva-based agency has been in a difficult position regarding Taiwan for some time and its staff have faced uncomfortable questions about the matter that have become more pointed in recent weeks. Confronted with them, the organisation released a statement last week saying that it was taking into account Taiwan’s contributions to the virus fight.

“The question of Taiwanese membership in WHO is up to WHO Member States, not WHO staff,” it said.

Global influence

Meanwhile, in the United States, President Donald Trump’s administration has seized the opportunity of the coronavirus pandemic to boost Taiwan’s status in the international arena.

The State Department announced last week it had convened a virtual conference to promote “expanding Taiwan’s participation on the global stage”. Just days before, on March 26, the White House announced that Trump signed a law requiring the US to press for Taiwanese recognition in international forums and to take unspecified action against countries that “undermine the security or prosperity of Taiwan”.

China has made clear its displeasure, noting “the frequent exchanges between the US and Taiwan in the recent days” and ridiculing Washington’s praise of Taipei.

“It seems that the US standard is not that high since Taiwan has donated two million masks and then becomes a model of democracy and a true friend of the US,” Chinese foreign ministry spokeswoman Hua Chunying said last Friday.

“In the current extraordinary period, mutual assistance and support are all welcomed. But I still want to remind the US and Taiwan that if someone tries to take advantage of the epidemic to impair China ‘s core interests, they must be cautious.”

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