COVID-19: Daily Dashboard

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

Public health

• Covid-19 has now taken the lives of 40,000 people globally with more than 850,000 reported cases. The global case fatality rate stands at 4.9%, which is higher than China’s 

• In Europe, figures are somewhat mixed. In Italy, the number of cases rose by 4% on 31 March, which is the lowest rate on record. On the other hand, the pandemic shows no sign of slowing in Spain, France and the UK, which all reported their worst daily death tolls 

• In the US, the virus has infected at least 180,000 people, more than the double the number of reported cases in China. New York, the US epicentre of the pandemic, has recorded more than 1,000 deaths. Meanwhile, President Donald Trump has published “The President's Coronavirus Guidelines for America”, urging people at risk to stay home

• In North Asia, China, South Korea and Taiwan continue to show slowing epidemic curves. Japan on the other hand, has seen a significant increase in confirmed cases, especially around Tokyo, and Prime Minister Shinzo Abe’s cabinet is exploring whether to declare an emergency to strengthen the private sector’s compliance with social distancing policies  

• Singapore and Hong Kong have seen a modest rise in their epidemic curves due to imported cases and sporadic super-spread events, prompting their governments to strengthen border controls and social-distancing policies. Their epidemic curves are stabilising. India and ASEAN-5 countries have also reported a rise in cases in the past few weeks, but the trend remains linear, not exponential.  
   
• Testing capacities are beginning to improve substantially. The number of RT-PCR tests (reverse transcription polymerase chain reaction) have risen beyond 1 million as the US, China, Europe and South Korea have significantly expanded testing capacities over last two months. US states New York and Colorado and the German government are now deploying ‘serology’ blood tests for signs of immunity. The UK government is exploring the option. Serology tests could be used for “immunity certificate” schemes and broader surveillance

• Using the RT-PCR tests, the rate of people testing positive for the virus has been exceptionally high in New York City. This suggests that the scale of local transmission has been substantial, compared with positivity rates in Asia which have been very low. South Korea, for instance, never showed rates higher than 6-to-7% of daily tests while in the New York borough of Queens, the rate has been well over 50%. 

Monetary response

• The US Federal Reserve made another significant announcement with the opening of a repo facility for foreign central banks. This would allow non swap-line countries to access USD liquidity. This means that counter-parties such as the People’s Bank of China can now get USD liquidity thanks to holding US treasuries as collateral.
   
• The results of the European Central Bank’s first targeted longer-term refinancing operations (TLTROs) conducted at a rate of -0.75% were announced yesterday. They showed a take-up of EUR43.7 billion, which brings the total TLTRO balance to EUR867 billion. 

Fiscal response

• President Trump has agreed a business proposal to delay tariff payments by 90 days and will sign an executive order giving the US Treasury the authority to defer such tariff collection
   
• Mr Trump also raised the idea of a fourth stimulus bill and specifically mentioned infrastructure, the day after Nancy Pelosi, Speaker of the House of Representatives made a similar call 
   
• Italy is discussing a second stimulus package, including measures such as cash payments for workers. Given the modest side of the first package and the extent of the damage caused by the epidemic, a sizeable new package is both welcome and necessary 
   
• In Germany, 470,000 companies applied for short-time work in March, revealing the huge impact to the labour market. In comparison, the number of applications during the Great Financial Crisis peaked at around 100,000
   
• Also in Germany, talks of backstopping losses for credit insurers by the government emerged
   
• In Japan, and in line with our expectations, the government proposed the ‘boldest ever’ stimulus package worth around JPY60 trillion (USD556 billion) and the equivalent of 10% of GDP. The ruling Liberal Democratic Party’s recommendation includes JPY10 trillion to be transferred directly to households, giving them a boost equivalent to a 5% cut in consumption tax. We expect the details to be finalised in the near-term and approved by parliament in the second quarter.

Portfolio positioning

• Based on the substantial public health, fiscal and monetary measures taken so far, we maintain our scenario of a material but transitory shock, but increase portfolio hedges (Japanese yen and gold) to navigate the current volatility. In addition, we regularly re-adjust the equity exposures to take account of the market drift after the declines, so that portfolios can benefit from the eventual recover

• We have taken the opportunity of improved market conditions to enhance the portfolios’ liquidity profiles by reducing our high yield exposure. We are keeping the proceeds in cash so that we are ready to react rapidly to any change in outlook
   
• We have also increased our GBPUSD allocation in sterling mandates by 2% following the historic collapse of the currency to levels that, in our view, were not consistent with underlying fundamental drivers.

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