COVID-19: Daily Dashboard

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

Public health

• Confirmed global Covid-19 cases have now passed 1.4 million while total confirmed deaths stand at just over 82,000. Importantly however, the dynamics remain encouraging with the daily growth rate of infections continuing to ease on a trend basis, suggesting that the epidemic curve is closer to a plateau

• The daily infection rate in most major European countries either slowed further (Italy and Switzerland) or remained steady and past its peak (Germany and Spain). The percentage increase in confirmed deaths also eased further. The outlier was France, which saw an increase in total confirmed cases of 11.2%, up from 5.5% the day before, with now more than 10,000 fatalities

• In the UK, confirmed cases grew at 7%, the slowest pace since 19 March. However, the country experienced its deadliest day on record with 786 more deaths and the total exceeding 6,000. Prime Minister Boris Johnson remains in intensive care

• In addition to Austria, the Czech Republic and Denmark have announced that they will start gradually loosening lockdown restrictions in the coming weeks. Italy may also start gradual end of lockdown on 4 May

• Austria is setting out a timetable to reopen. On 14 April, small shops will be allowed to open along with large hardware and garden stores. On 1 May, businesses deemed a higher risk such as hair salons will be allowed to reopen. The government said that it was possible for cafes and restaurants to re-open in mid- May but did not give an exact date. Public events would not be allowed until July with no date set for schools to reopen

• According to Reuters, Germany’s residents are beginning a plan to return to normal life after the lockdown ends (after 19 April at the earliest). The plan assumes a test and trace system is in place that makes it possible to track more than 80% of people with whom an infected person had contract within 24 hours of diagnosis. Strict social distancing measures would remain in place even as shops are allowed to re-open. Large events and private parties would not be allowed. Protective masks would be mandatory on public transportation as well as in public buildings

• This is a slow return to normal and makes a strong recovery unlikely at first. Sequentially, growth will pick up in the second half of the year as economies open

• The US infection rate mirrored that of major European countries, with the daily percentage change declining further. Total confirmed cases are now close to 400,000 with total registered deaths near 13,000

• In Japan, which as of yesterday is in a month-long state of emergency, confirmed cases grew by 9% - which is higher than the previous day - although they remain low compared to other major developed countries, with a mortality rate of 2%

• In China, Wuhan’s lockdown officially ended at midnight yesterday. The country as a whole reported 62 new cases of symptomatic confirmed infections and 137 new cases of asymptomatic infections on 7 April. The report suggests that imported cases remain an issue for China. 59 out of 62 new symptomatic cases and 102 out of 137 new asymptomatic cases were imported, according to the National Health Commission

• A new study from China’s Fudan University on 175 Covid-19 patients discharged from the Shanghai Public Clinical Center suggested that nearly a third of the sample exhibited unexpectedly low levels of antibodies. If true, this could reduce the accuracy of serological tests that could be used to allow recovered patients to go back to work. However, Paul Romer, a Nobel economics prize laureate, recently suggested in a simulation that the test would prove ineffective.

Monetary and fiscal measures

• The European Union teleconference meeting yesterday revealed divisions between member states on the economic rescue package to cushion the virus impact. According to reports, no decision was reached and discussions are scheduled to continue tomorrow

• In the US, the White House is pushing for an additional USD250 billion to its existing programme of loans to small businesses, currently at USD350 bn. A vote in the Senate is likely to take place on 9 April

• South Korea is considering another stimulus package to shore up the economy, worth of USD44 billion. In total, South Korea’s fiscal measures amount to USD124 bn or 8% of GDP. Similarly, Singapore unveiled a third round of fiscal response, bringing the total fiscal package to USD42 bn or 12% of GDP. South Korean President Moon Jae-in’s administration is reportedly trying to submit the new supplementary budget this week, but the passage is not certain as the National Assembly has an election next week

• The European Central Bank has decided to relax rules for its bond-buying programme temporarily; it will now accept junk-rated bonds as collateral. The move is aimed to provide relief to Greece, which, until now was excluded from the asset buying program due to its sovereign rating. Additionally, a rise in the ECB's 'bridge' Long Term Refinancing Operations (LTROs) maturing in June (+EUR19.5 bn to EUR252 bn). Total outstanding LTROs reached a new high of EUR886 bn.

Economic impact

• There are no new developments on this front since 6 April 

Portfolio positioning

• The trend has turned more positive in the past days, but we do not believe that all the conditions for a sustained equity market rally are in place just yet. We continue to monitor the slowdown in European and US infection rates and the likelihood of a second wave of infections in Asia. Market attention will gradually shift away from the outbreak and towards exit strategies and the economic impact. There are both negative and positive catalysts ahead: positive Covid-19 developments may be mitigated by worrisome news flow including weak economic data, dividend cuts and credit rating downgrades

• We continue to adjust our portfolio exposures. Most recently, we have increased exposure to policy-backed, undervalued assets, such as investment-grade credit

• We have also readjusted our global equity exposure in line with our tactical targets, and rebalanced our regional equity allocation by reducing our position in global emerging markets and increasing exposure to Asian equity markets. We have taken profit on the short leg of the put spread trade.

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