COVID-19: Daily Dashboard

* LO estimate or reported figures
Sources: Bloomberg, IMF, World Bank, Lombard Odier calculations

Public health

• The Covid-19 daily global infection rate fell to 5.7%, its lowest rate since 10 March. Once again, improvement was widespread with most major European countries recording further declines in daily growth rates. Total deaths are now close to 75,000, with the daily percentage change also slowing on a trend basis. The fatality rate, a lagging indicator, stands at 6%

• There are more signs that in Italy the worst part of the pandemic is behind, with the daily infection rate falling to a low and a stable mortality rate. In Spain, total infections have surpassed Italy but here too, the daily infection rate fell to its lowest level. The latest French numbers now include residential care home infections, making them difficult to compare, but show a clear improvement from late March. Germany also experienced a further decline in infection growth and has one of the lowest mortality rates among developed countries

• In the UK, total confirmed cases surpassed 50,000 but the daily growth rate fell to 7.9%, the lowest since mid-March. Total deaths stand at 5,385 with a fatality rate of 10%. Last night, Prime Minister Boris Johnson was transferred to the intensive care as his infection symptoms worsened. Downing Street said Mr Dominic Raab would “deputise where necessary”

• Austria announced that it would progressively lift confinement measures after Easter by phasing-in shop re-openings followed by other services and schools. Other European countries are currently considering similar exit strategies. Denmark reopens primary schools and nurseries next week. The German interior ministry proposed opening retail stores and restaurants on 14 April but limiting numbers in closed rooms

• The US has now reported more than 350,000 cases and 10,000 deaths, with the daily infection rate trending lower. New York State, the epicentre of the country’s outbreak, continued to report a flattening of confirmed deaths, as well as a reduction in hospitalisation and intensive care entries. The state has extended its confinement measures until 29 April

• Following increased pressure from public health officials, Japanese Prime Minster Shinzo Abe said on 6 April that he will declare a state of emergency The measure will cover Tokyo, Osaka and five other prefectures. Although total confirmed cases in Japan are still low, the growth rate accelerated over the weekend, putting pressure on Mr Abe and officials who had resisted more drastic measures. The state of emergency is expected to last one month, the Prime Minister said. Under a recently amended law, the government can compel organisations to comply with the government’s measures, but individuals can only be “requested.” We expect employers to tighten social distancing measures across the country

• One of South Korea’s major hospitals released a paper that suggested the injection of blood plasma from recovered individuals appears to have worked for two Covid-19 patients. The discussion of this antibody prophylaxis approach will receive more attention in coming months as it may contribute to both the treatment of patients as well as the protection of medical staff.

Monetary and fiscal measures

• European leaders meet today to discuss a rescue package for virus-affected countries. The proposed measures include some or all of the following:
• Deploying European Stability Mechanism (ESM) funds whose current capacity is EUR410 billion. The ESM can provide credit lines to economies, subject to conditionality. Eurosceptics in Italy oppose such a measure because of fears that it will include conditions including reforms. Klaus Reigling, the ESM’s managing director, has said that conditions will be lax and targeted, to ensure that the funds address the virus’ impact.
• Second, a pan-European guarantee fund managed by the European Investment Bank (EIB) and potentially providing a boost to European banks and facilitating loan provisions across the region.
• Third, the European Commission is considering the creation of an EU unemployment scheme. It would provide loans to countries in order to cover costs related to short-term working schemes, which are likely to burden national budgets following the confinement measures. To do so, the European Commission would obtain money from capital markets with a target of EUR100 billion, in part backed by member states. Beyond these options, 11 member states support the issuance of Eurobonds, but at this stage they seem unlikely to get universal approval

• According to press reports, the Italian government will expand its guaranteed programme for bank loans to companies, from EUR400 bn to EUR750 bn

• Germany unveiled a credit programme aimed at small and medium sized enterprises, guaranteeing 100% of loans up to EUR800,000, which will initially bear a 3% interest rate

• In line with the state of emergency, likely be announced in Japan today, Prime Minister Abe is also likely to unveil a stimulus package worth JPY108 trillion, equivalent to 20% of Japan’s GDP

• The Federal Reserve announced the creation of a new programme to finance loans to small businesses through the emergency Small Business Association Paycheck Protection Programme (PPP)

• The European Central Bank bought EUR30.2 bn of bonds in the first five days of its newly launched PEPP asset purchase programme

• The International Monetary Fund is working on a programme to offer a short-term facilities for developing countries that lack access to Federal Reserve facilities.

Economic impact

• There are no new developments on this front since yesterday.

Portfolio positioning

• The Investment Committee decided to reduce exposure to emerging market debt in hard currency across all profiles to further enhance the liquidity
   
• We will hold the sale proceeds in cash
   
• Following the recent relief rally, the committee rebalanced the equity allocation in line with the tactical asset allocation targets. We re-adjust the equity exposures to take account of the market drift

• We are buying some protection by implementing put spreads to cover parts of the equity notional.

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