Following last week’s announcements and counter notifications, Gilead is the first company to receive marketing authorization for an anti-COVID-19 drug. This is valid for the U.S. Europe has not made any announcement.
Singular Bank | According to the International Monetary Fund (IMF), governments have so far adopted expansionary fiscal policy measures worth $8.5 trillion (9.8% of world GDP in 2019). These are aimed at addressing the socio-economic consequences of the Covid-19 crisis, in a context of global recession.
Jorge Guira via The Conversation |How much US shale oil is worth saving in these straitened circumstances is key. Some estimate as many as 70% of firms will go out of business overall, with some never coming back until oil stabilises above US$50. Others may be taken over by companies prepared to wait for higher prices.
Mark Shirreff Matthews (Head Research Asia, Julius Baer)| We remain Overweight on China. Of the major world economies, it will be the least impacted by the coronavirus. It is impacted nonetheless, but China’s economies of scale, and financial and technological resources, mean it can develop “new infrastructure” even more than it had previously planned to. Our recommendation for long-term investors is to be positioned in that space, and all its ancillaries, while in the short-term, “old infrastructure” (like cement and construction equipment) will also receive a boost.
Transportation has been severely impacted by the implementation of widespread travel restrictions. These restrictions have resulted in a 30 pct drop in global air traffic and an around 40% decline in road traffic. Firms that survive the “high oil saturation” could benefit once demand recovers and supply has been reduced.
Konstantin Veit, PIMCO, Senior Portfolio Manager European Rates Desk | The ECB meets on Thursday, and while we believe the Governing Council will strongly reiterate its readiness to do whatever it takes we don’t think any far reaching monetary policy decision will be taken at the April meeting. There is a chance for the ECB to clarify the treatment of “fallen angels” within the various asset purchase programs, whereby we expect grandfathering in line with the recent changes to the collateral eligibility framework to make head against pro-cyclicality.
Union Bancaire Priveé (UBP) | Fixed-income frontier markets have seen significant growth in both importance and liquidity over the past decade. While still mainly thought of as part of global EM investments, frontier markets have “grown up” and deserve to be considered separately.
There has been a setback in the progress of a treatment to cure Covid-19. It was learned that remdesivir (Gilead’s antiviral) had not shown sufficient clinical improvement in the first clinical trial and even had important side effects. According to the company, these conclusions are associated with the trial that had to be stopped in China due to a lack of patients.
Bank of America Global Research | The size of major central bank balance sheets has been stable at 21 to 28% of GDP in the past decade just like the gold price. As central banks and governments double their balance sheets and fiscal deficits we up our 18m gold target from $2000 to $3000/oz. Still, a strong USD backdrop, falling equity market volatility, and weak jewelry demand in India and China may remain headwinds.
Julius Baer | The oil market continues to write history. The past days and weeks brought us an unprecedented demand collapse, unprecedented oil politics and the absolute novelty yesterday: negative oil prices. The US benchmark West Texas barrel sank by -305% and became negative at -37.63 $/b. Before you rush to the petrol station, negative prices are a temporary glitch reflecting stressed flows in the futures markets and stressed storage conditions somewhere in the US Midwest.