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Eurogroup flunks it

Emily Nicol
Chris Scicluna
  • After the ECB took further action to boost the flow of credit to the euro area economy, the Eurogroup flunked its latest test, failing to agree new pandemic crisis support mechanisms. The Bank of France, meanwhile, estimated that French GDP suffered its worst ever quarterly decline in Q1, with worse to come in Q2.  

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Over to Abe

Emily Nicol
Chris Scicluna
  • Ahead of the key Eurogroup videoconference to agree common pandemic crisis support, PM Abe will declare emergency in seven prefectures and unveil his fiscal support package. The headline figure of more than ¥100trn will seek to impress. But the size of direct government support to the economy might be better judged by the increase in new JGB issuance, which will be less than one fifth that amount.

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Abe’s package firming up

Emily Nicol
Chris Scicluna
  • As Abe put the finishing touches to his fiscal support package, and also prepared to declare an emergency in seven prefectures, risk appetite responded positively to some better weekend news on the spread of Covid-19.

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Services PMI signal significant slump

Emily Nicol
Chris Scicluna
  • The March services PMIs point to a significant contraction as the coronavirus crisis hit activity in the sector, with close attention paid to the impact on Italian and Spanish services in particular. And after yesterday’s shocking US jobless claims figures, focus later today will turn to the latest payrolls report.

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Pain ahead

Emily Nicol
Chris Scicluna
  • The latest BoJ Tankan, final PMIs and Donald Trump all signalled pain ahead. And Asian markets reflected that pessimism, with stocks and major bond yields down across the board.

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