Morning Report – Monday 27th April

Main Headlines

Nations in Europe are making plans to partially reopen their economies as infections and deaths decline, with Italy starting to allow families to visit each other and France aiming to ease its lockdown on May 11.

European equity futures rallied with Asian stocks, S&P 500 contracts erased losses and haven assets beat a retreat. Japanese benchmarks led gains after the BOJ joined global counterparts in boosting monetary stimulus. Industrial metals also surged, but oil remained gloomy even as Saudi Arabia started its production cuts a little early. Treasuries slid.

Boeing walked away from its proposed $4.2 billion deal with Embraer’s commercial-aircraft business, ending years of talks. Boeing faces a $100 million termination penalty. And Airbus warned it’s “bleeding cash” and needs to quickly cut costs. The companies likely burned through record amounts in the first quarter: 6.5 billion euros for Airbus and $8 billion for Boeing, according to Melius Research.

GBP

Pressure is building on Boris Johnson to follow suit and ease lockdown restrictions, as he returns to work today. Dominic Raab rejected that idea Sunday, telling Sky News the outbreak is still at a “delicate and dangerous” stage. So are the EU-U.K. trade talks, the Guardian reported.

EUR

Italian Prime Minister Giuseppe Conte said his country will start easing lockdown restrictions on May 4, setting up a key test of Europe’s efforts to restart public life and economies immobilised by the coronavirus. With a cautious reopening under way in several countries such as Germany, pressure in Italy has been building even as it suffers Europe’s highest virus-related death toll. Conte warned that a second wave of infections would cause a resurgence of deaths and “irreversible damage” to the economy. The Euro has rallied somewhat but still trades with a bearish bias.

USD

The dollar weakened and this may be a medium term consequence of any improvement in coronavirus conditions. There is some comfort that the number of jobless claims in the US has declined for the third consecutive week however, the US economy has now erased 25 million jobs in the past five weeks which it took twelve years for it to create.

Main Economic Data/Central Banks/Government (All Times BST)

• 10:30 a.m.: Germany sells bills
• 1:50 p.m.: France sells bills
• 2:00 p.m.: Russia March retail sales

Corporate Events

Earnings include Bayer, Adidas, NXP Semiconductors, Keurig Dr Pepper.