Singapore Stimulus; Germany to Bail Out Lufthansa: Virus Update

Dominic Cummings, one of Boris Johnson’s closest allies, refused to quit his job in the U.K. government, refuting claims he flouted lockdown rules that he had helped to draft. Germany agreed on a 9 billion euro ($9.8 billion) bailout for virus-hit airline Lufthansa.

Japan ended its state of emergency everywhere in the country and made reviving the economy its top priority. Singapore’s president said she has given her in-principle support to tap the government’s past reserves for a fourth support package for the economy.

The World Health Organization temporarilyhalted tests on hydroxychloroquine in its Covid-19 drug trials pending more data because of safety concerns.

Key Developments:

  • Virus Tracker: Cases top 5.4 million; deaths over 345,000
  • Spaniards inface masks return to Madrid’s bars as crisis eases
  • Germany totake Lufthansa stake in landmark $9.8 billion bailout
  • Johnson aiderefuses to quit over claim he breached lockdown
  • WHO’s hydroxychloroquine trialsuspended pending safety data

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20,634 in U.S.Most new cases today

-13% Change in MSCI World Index of global stocks since Wuhan lockdown, Jan. 23

-1.​073 Change in U.S. treasury bond yield since Wuhan lockdown, Jan. 23

-4.​8% Global GDP Tracker (annualized), April

Singapore Slashes Growth Target With 7% Contraction Possible (8:01 a.m. HK)

Singapore’s economy will probably contract 4% to 7% this year as the coronavirus outbreak and measures to contain it pummel the trade-reliant city state.

The government revised its forecast from a previous projection for a contraction of 1% to 4% as the outlook for external demand deteriorates, the Ministry of Trade and Industry said in a statment.

“There continues to be a significant degree of uncertainty over the length and severity of the Covid-19 outbreak, as well as the trajectory of the economic recovery, in both the global and Singapore economies,” the MTI said.

U.S. Resets Brazil Travel Limit (6:40 a.m. HK)

The Trump administration advanced the effective time for limiting the entry of non-U.S. citizens traveling from Brazil, a nation that has the world’s second-most infections. The order will take effect at the end of Tuesday, two days earlier than stated in a proclamation issued Sunday by the White House.

Air New Zealand Forecasts Loss (6:30 a.m. HK)

Air New Zealand forecast its first full-year loss in 18 years as the pandemic halts travel, grounds aircraft and forces the layoff as many as 4,000 workers.

The carrier will post an underlying loss in the year ending June 30 but can’t provide a range, it said Tuesday in Wellington. The airline will post an impairment charge on aircraft of at least NZ$350 million ($213 million), restructuring costs of as much as NZ$160 million and losses on fuel hedges of as much as NZ$105 million, it said.

Airlines are reeling from the impact of the pandemic, forcing them to review fleets, routes and spending and seek government help. Germany on Monday offered Deutsche Lufthansa AG a $9.8 billion bailout. Air New Zealand agreed a NZ$900 million debt facility with the government in March.

U.S. Says 200 Million Tests Possible (5:55 p.m. NY)

The Trump administration said sufficient quantities of Abbott Laboratories’ ID NOW Covid-19 test and Quidel Corp.’s Sofia 2 instruments exist to support 200 million U.S. tests per month.

The Department of Health and Human Services, in a report to Congress, said 18,000 ID NOW devices and 20,000 Quidel instruments are available to states. The U.S. also is buying 100 million swabs and 100 million tubes of viral transport media to help states meet testing goals.

“This large-scale acquisition reflects a significant expansion of current capacity,” according to the report, and reflects use of the Defense Production Act to increase swab manufacturing.

Minneapolis Mayor Worried by Church Rules (5:30 p.m. NY)

Minneapolis Mayor Jacob Frey said he is concerned by Minnesota state guidelines taking effect on Wednesday that let churches resume services, with limits on attendance and requirements to follow social-distancing measures.

“A move up to 25% capacity and up to 250 people in places of worship is a recipe in Minneapolis for a public health disaster,” Frey said Monday on CNN. “That is not the route that we can or should be going on right now.”

Novavax Starts Vaccine Study (4:35 p.m. NY)

Novavax Inc. began human testing of its coronavirus vaccine candidate and anticipates providing a first look in July at what sort of immune responses are generated.

In the first phase, 130 healthy adult volunteers at two sites in Australia will get two doses of NVX-CoV2373, the biotech’s experimental vaccine. If initial results look promising, the company plans to quickly move into the second phase -- expand testing to other countries and age groups outside of 18 to 59.

The Gaithersburg, Maryland-based company is one of about 10 that are testing vaccines, according to the World Health Organization. Moderna Inc.reported the first Covid-19 vaccine results in humans last week.

U.S. Cases Rose 1.3%, Less Than Week’s Average (4 p.m. NY)

U.S. cases increased 1.3% from the same time Sunday to 1.65 million, according todata collected by Johns Hopkins University and Bloomberg News. The increase was below the average daily increase of 1.4% over the past week, and has the same for three days.

Deaths rose less than 1% to 97,948 from 97,424 -- the smallest one-day increase in more than a week.

  • New York had 1,249 cases, bringing the total to 362,764, and 97 deaths, for a total of 23,488, the health department said.
  • New Jersey had 965 cases, for a total of 155,092, with 16 deaths, for a total of 11,144, Governor Phil Murphy said.
  • Illinois reported 1,713 cases, for a total of 112,017, with 31 deaths, for a total of 4,884.
  • California cases rose 1,848, or 2%, for a total of 94,558, while 21 deaths were added, a 0.6% rise, to 3,795.
  • Pennsylvania added 473 cases, for a total to 68,186, and 15 deaths for a total of 5,139, the health department reported.
  • Michigan reported 202 new cases for a total of 54,881, with 12 additional deaths for a total of 5,240.
  • Connecticut added 405 cases, for a total of 40,873, with 49 new deaths, for a total of 2,742, Governor Ned Lamont said.

California Sets Church Limits (3:45 p.m. NY)

California will limit attendance in houses of worship to 25% of building capacity or 100 people and is discouraging choir singing, group recitations and passing of the collection plate.

“Convening in a congregational setting of multiple different households to practice a personal faith carries a relatively higher risk for widespread transmission of the Covid-19 virus, and may result in increased rates of infection, hospitalization, and death, especially among more vulnerable populations,” according to theguidance.

The state is also discouraging potlucks or similar family-style eating and drinking events that increase the risk of cross contamination.

Denmark Funding Needs Triple (3:10 p.m. NY)

Denmark needs more than $40 billion in financing -- more than triple its previous estimate -- to help pay for an historic set of emergency measures to fight the pandemic. The government will need to tap bond markets and its account at the central bank to generate the needed 294 billion kroner ($43 billion), the Finance Ministry said.

AAA-rated Denmark has so far been able to tap markets at historically low rates. Its benchmark 10-year bond trades at a negative yield, and its entire yield curve up to 20 years traded below zero not that long ago.

England to Reopen Showrooms, Stores (2:50 p.m. NY)

England’s outdoor markets and car showrooms can reopen from June 1, as soon as they can meet guidelines to protect shoppers and workers, Prime Minister Boris Johnson said as he urged the public to spend money in stores when the curbs are lifted.

All other non-essential outlets including shops selling clothes, shoes, toys, furniture, books and electronics, plus tailors, auction houses, photography studios and indoor markets, are on track to reopen June 15 if the government can control the spread of the virus, Johnson told a daily news conference. Scotland, Wales and Northern Ireland are on a different timetable determined by local administrations.

U.K. cases rose to 261,184. The government reported 121 new deaths, up from 118 a day earlier, bringing the total to 36,914.

Dubai to Ease Limits Wednesday (2:20 p.m. NY)

The emirate of Dubai will resume economic activities and ease lockdown restrictions starting Wednesday, the emirate’s media office said in a statement.

Travel will be allowed from 6 a.m. to 11 p.m. local time. The airport will operate only for residents leaving Dubai, some clinics will reopen and elective surgeries that take up to 2 1/2 hours will be allowed, the statement said.

Training academies, indoor sport venues, gyms and movie theaters will be open with social distancing in place.

ECB’s Villeroy: More Stimulus Probable (1:30 p.m. NY)

A key European Central Bankpolicy maker signaled the institution is very likely to boost its emergency bond-buying program to fight the pandemic.

With inflation low, there is room to innovate and act “rapidly and powerfully,” Bank of France Governor Francois Villeroy de Galhau said in Paris. He also signaled he’d like more loosening of limits on the 750 billion-euro ($817 billion) plan.

The ECB’s next policy meeting is June 4 and economists are increasingly forecasting that the central bank will use that session to add more stimulus.

— With assistance by Steve Geimann

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