• Sentiment remains subdued, in a turnaround from yesterday, as focus turns from stimulus measures back to rising virus case counts
• Spain's coronavirus cases increase to 64059 from 56188; deaths at 4858 from 4089
• US confirmed cases stand at 81,378 - highest in the world, according to a Reuters calculation
• US House set a two-hour debate on coronavirus relief bill on Friday 0900 ET/1300 GMT, according to House officials
• In FX, the USD is firmer as the index fights back from a week which has featured hefty losses; though the 100.0 mark remains elusive
• UK PM Johnson has tested positive for the virus, reports which caused immediate and ongoing downside for GBP
• Looking ahead, highlights include US Personal Income, University of Michigan (Final) & PCE Price Index

CORONAVIRUS UPDATE

Spain's coronavirus cases increase to 64059 from 56188; deaths at 4858 from 4089. (Newswires)

UK PM Johnson has tested positive for Corona virus. He has mild symptoms and will self-isolate in Downing Street. but he will still be in charge of the government's handling of the crisis, according to BBC's Kuenssberg. (BBC)

President Macron said he and US President Trump are preparing "a strong new initiative" with other nations; to be unveiled in the coming days (Newswires)

China mainland reported 55 new virus cases (vs 67 on Thursday); total case count 81,340 as of end-26th March; 5 new deaths in the period (vs 6 reported on Thursday); no new cases in Hubei, though 5 new deaths reported                                                                                            . (Newswires) South Korea total covid-19 case count 91 today, taking the total to 9,332, according to KCDC. (Newswires)

US confirmed cases stand at 81,378 - highest in the world, according to a Reuters calculation. (Newswires) NOTE: This data is a tally by Reuters; official data earlier showed the covid case count rise to 68,440 on Thursday (from  54,453), while the official death toll was up to 994 from 737

US House set a two-hour debate on coronavirus relief bill on Friday 0900 ET/1300 GMT, according to House officials. The Bill may not be able to pass via voice vote, and it was unclear on the timings of the next step, like a roll-call vote, the House Majority Leader's office said. (Newswires)

US President Trump said he will early next week provide information on relaxing guidelines on social distancing. US VP Pence says President Trump will be presented with options on opening the economy up this weekend. Bipartisan group of US lawmakers have urged the Trump administration to defer all tariffs during the covid pandemic, for at least a 90-day period, or until the crisis has passed. US President Trump said there is "no way" that he would cancel the Republican National Convention in August due to the virus, according to Fox (Newswires)

Japan Economy Minister said there was no need to declare a state of emergency over covid-19. (Newswires)

OECD says for each month of containment there will be a 2% loss in annual GDP growth for major economies. (Newswires)

ASIA

Major APAC indices initially took their cues from Wall Street, rising firmly at the open, amid optimism that policymakers will continue to roll-out stimulus measures to guard economies against covid-induced downside. However, as the European day comes into focus, the picture is mixed, as Aussie shares turned negative, and other bourses off highs. US indices finished up around 6%, with the Dow seeing its strongest three day run since 1931 and re-entering a bull-market, while the S&P had its best three-day performance since 1933. Gains were led by defensive sectors (utilities, telecoms, health care). Equities shrugged-off the highest weekly jobless claims print on record. Some desks also noted that month/quarter-end rebalancing will see 850bln of flows into equities. US equity futures opened firmer, though subsequently gave up gains, and are trading lower, albeit off worst levels. ASX 200 (-5.3%) was led lower by its heavyweight financial and mining sectors, while the Nikkei 225 (+3.8%) shrugged off a firmer JPY, with some optimism in the country emanating from Japanese Economy Minister Nishimura who stated that there was no need to declare a state of emergency over the outbreak. Elsewhere, Hang Seng (+0.6%) and Shanghai Comp. (+0.3%) remained in positive territory and were buoyed by increased efforts from Chinese officials to stem a substantial second wave of the virus in the country, with reports yesterday noting that airport tests will be ramped up for people arriving from abroad.

PBoC set USD/CNY mid-point at 7.0427 vs. Exp. 7.0531 (Prev. 7.0692) (Newswires). PBoC skipped open market operations

US is moving forward with plans to limit chips to Huawei, according to the WSJ, citing sources. The proposal would require export licenses for many of the chips that are sold to Huawei that are made by US manufacturers. (WSJ) US President Trump said it looks like the US can do another trade deal with China, though it will have to wait until after the Presidential election. (Newswires) US President Trump confirmed his conversation with China President Xi and said both nations agree to work closely together on virus. (Twitter)

South Korea Consumer Sentiment Ind* (Mar) 78.4 (Prev. 96.9, Rev. 96.9). (Newswires) China Industrial Profits (Jan-Feb) declined 38.3% Y/Y (previous -3.3%)

Australia PM Morrison said government is preparing a third tranche of economic relief. (Newswires)

RBI cuts rates by 75bps to 4.4%; voted 4-2 to cut rates; reverse repo rate lowered to 4.15%. Governor Das said the move was designed to mitigate effects of the virus, revive growth and preserve financial stability. He added that the RBI's response must involve conventional and unconventional measures. Das noted that inflation was running higher than projections in January and February, and that aggregate demand may weaken, and ease inflation further due to Covid-19. Das also said projections for growth and inflation will be dependent on how Covid progresses; he noted that uncertainties in the outlook and explained that is why the MPC has refrained from providing growth and inflation forecasts. Das also announced targeted long-term repo operations, offering up to INR 1trln.

US

US banks had USD 50.8bln of outstanding loans via the discount window, as of Wednesday (vs USD 28.2bln last week), according to Fed data. (Newswires)

UK/EU

EU leaders gave finance ministers two weeks to sort out technical details of bailout fund credit lines for the Eurozone to fight the crisis. German Chancellor Merkel said that, for Germany, the ESM is the main instrument to help other European countries during the virus crisis. (Newswires)

GEOPOLITICS

Saudi-led coalition said it intercepted and destroyed missiles fired by Yemeni Houthis, according to Saudi state news. (Newswires)

EQUITIES

A downbeat session thus far for European equities (Euro Stoxx 50 -3.3%) as the bourses look set to snap its three-day rally heading into another risky virus-focused weekend. US equity futures follow suit from Europe with losses currently tallying to around 2% per index – with eyes State-side on the virus bill which is poised to make its passage through the House later today. Back to Europe, UK’s FTSE 100 (-3.9%) underperforms the region with a number of its stocks at the foot of the Stoxx 600 index as caution arises from the prospect of delayed UK/EU FTA negotiations, despite the already-tight schedule – whilst housing and banks names also see headwinds from the UK govt calling for the halt of home purchases/sales.  Meanwhile, Italy’s FTSE MIB (-2.3%) continues to feel some support from the ECB dismissing the 33% issuer limit for its emergency program purchases. European sectors reside largely in the red but reflect risk aversion, whilst underperformance is seen in the Energy sector on account of the downside in Brent prices. The sector breakdown meanwhile sees Travel & Leisure pressured on the ongoing virus-induced demand woes for the sector. Looking at individual movers, ProsiebentSat1 (+7.0%) sees upside amid the immediate resignation of its CEO, and with potential tailwinds from work-from-home flows. LafargeHolcim (-3.5%) and Safran (-2.3%) shares are pressured after the Cos withdrew their respective FY targets.

FX

USD - The Greenback has regained an element of composure after yesterday’s slide and extended losses across the board, with some analysts suggesting that the DXY eventually found technical respite in the form of Fib support around 98.840 and others noting that the index is correlating quite well with moves in the VIX. Both theories appear credible and are backed up by price developments given the DXY’s subsequent recovery to 99.500+ and the so called fear gauge climbing to 67 from around 61 at settlement on Thursday. Certainly, traditional fundamentals and data do not seem to be driving sentiment or direction as the focus remains firmly on COVID-19 amidst the backdrop of swings in global stock markets and risk assets vs safe-havens.

JPY/GBP/AUD - Bucking the overall trend, or resisting the broad Dollar revival to be more precise, as the Yen retains its renowned safe-haven allure above 109.00, while Sterling appears to have formed another higher platform on the 1.2100 handle to probe above 1.2300 and match a key chart resistance level (50% retracement of reversal from 1.3200 to 1.1412), albeit with the aid of Eur/Gbp tailwinds as the cross recoils from almost 0.9100 to sub-0.9000, with month/quarter end positioning cited on top of possible official Pound buying interest. Elsewhere, the Aussie is holding up relatively well and again month-end demand has been touted alongside exporter bids, leverage stops and momentum accounts joining the break of 0.6100 to the overnight highs.

CAD/EUR/NZD/CHF - The Loonie is underperforming after failing to sustain momentum through 1.4000 and record low Canadian crude prices may be weighing along with contagion from the coronavirus after the huge spike in US weekly claims that is expected to be evident in domestic data given reports that 500k people applied for benefits last week. Similarly, the Euro topped out ahead of 1.1100 and is waning on the ongoing spread of pandemic cases and fatalities across the common currency community, with particular focus on Italy and Spain. However, decent option expiries at the 1.1000 strike (1 bn) may provide a buffer for Eur/Usd. In contrast, the Franc and Kiwi are both rangebound within 0.9645-0.9587 and 0.6126-0.5921 respective bands.

EM - Broad retracements as the Usd consolidates off its lows, but the Zar also conceding ground in the run up to Moody’s SA ratings review that could well see the sovereign lose its last non-junk standing. Note also, the Rand has been ruffled by the first COVID-19 deaths as the country starts a 3 week lockdown.

Notable FX Expiries, NY Cut:

-        EUR/USD: 1.0900 (1BLN), 1.0915-20 (480M), 1.0950 (375M), 1.1000 (1.1BLN), 1.1025 (600M), 1.1150 (570M)

-        USD/JPY: 108.00 (250M), 108.35 (360M), 109.50-60 (1BLN), 110.00 (1.4BLN), 110.20-30 (900M)

-        EUR/JPY: 120.85 (1.8BLN)

Riksbank business survey notes that the COVID-19 pandemic has had a substantial effect on large companies and the situation has deteriorated extremely rapidly. Companies are affected on three different fronts: through disruptions to production, reduced demand and financing difficulties. (Riksbank)

FIXED

Buying has been much more measured and gradual, but after a period of consolidation and mild retracement the core Eurozone bond has crept closer to the next upside chart target at 172.47 (March 17 peak), at 172.43 so far, and the steady incline is dragging Gilts and USTs higher, as stocks hand back more of Thursday’s gains. Pre-weekend positioning that often favours safe-havens is also at play, although month/Q1 end rebalancing models have been signalling hefty equity requirements for asset portfolios

COMMODITIES

WTI and Brent front-month futures see divergence, with outperformance seen in the former after yesterday’s -7.7% settlement, whilst ICE Brent closed lower by around 4% yesterday. Today’s narrowing in spread seems to be more of a consolidation of the prior session’s widening – which emanated from reports that the US Department of Energy suspended its SPR refill after the DoE failed to secure funding. ING notes that “The US government was keen to fill up the SPR in a bid to help domestic producers, however, news of the suspension has weighed heavily on WT.” Meanwhile, on the OPEC front, the Algerian Oil minister has called for an extraordinary meeting of the OPEC economic panel to assess current conditions and immediate prospects of the oil market, whilst Russia noted that its oil output could decline by 1.5mln BPD this year if prices meander around USD 30-35/bbl – levels above current oil prices, although communication with OPEC+ members remain. Desks note that production cuts needed to counter the sharp decline in demand would be too much for OPEC+ producers to cope with. WTI futures pulled back from ~USD 23/bbl whilst its Brent counterpart treads water just under USD 26/bbl. Elsewhere, spot gold remains lacklustre above USD 1600/oz as the Dollar recoups some of yesterday’s losses. Copper meanwhile remained largely uneventful around USD 2.2/lb following a mixed APAC session.

Algerian Oil Minister has called for an extraordinary meeting of the OPEC economic panel in order to asses current conditions and immediate prospects for the oil market; requests meetign is held no later than April 10th. (Newswires)