Boris Johnson is doing his daily briefing on the coronavirus response.

You can follow that here:

Markets have sold the rumour and bought the fact when it comes to recession warnings. With heavy falls behind when the toll of the virus became clear, investors are already looking forward to efforts to pull the economy out of the doldrums.

Yet the effects of the coronavirus outbreak are still in their early stages, as evidenced by the surge in the number of claimants of universal credit, the UK’s benefits system. There was a 477,000 increase in new claims over the past nine day, according to Peter Schofield, a civil servant at the Department for Work and Pensions - 500% higher than the same period last year.

That means the UK is suffering the early stages of an unemployment crisis, said the Resolution Foundation, a think tank whose ideas for paying workers’ wages heavily influenced government policy.

The number of new claims to universal credit in the past nine days is greater than the successful claims made to jobseeker’s allowance in any entire month during the financial crisis.

Karl Handscomb, senior economist at the Resolution Foundation, said:

The unprecedented surge in new Universal Credit claims shows that the UK is already in the midst of an unemployment crisis.

The increase in claims is putting huge pressure on our social security system, and is driven by a huge hit to family incomes.

The government was right to increase the generosity of the benefits system last week. It now needs to ensure the resources are there so that claims are processed quickly, and people receive support as soon as possible.

It was the 13th best day ever for the FTSE 250 index of mid-cap companies.

The FTSE 250 gained 4.57% to reach 14,819.91 points.

Lloyds, Britain’s biggest high street bank, has granted mortgage holidays to more than 70,000 customers in a little over a week.

That’s one of the first tallies we’ve seen since the chancellor announced that homeowners who came into financial trouble as a result of the outbreak would be given up to three months’ relief on their payments.

Lloyds has also confirmed some new emergency measures for personal banking customers - waiving interest on arranged overdrafts of up to £300 for all customers across its Lloyds, Halifax and Bank of Scotland branches from 6 April.

It follows similar announcements by Barclays this morning.

Markets have now closed in Europe for the day, and it looks like there was another late buying spree.

The FTSE 100’s preliminary close shows it pushed to a 3.5% gain for the day, to break through 5,600 points - let’s see if the closing auction can push it higher, as it did dramatically yesterday.

The Stoxx 600 gained 2.5% in preliminary data.

More forecasts of recession for major economies: Moody’s now predicts GDP will fall by 0.5% in the G20 economies in 2020, followed by a pick-up to 3.2% growth in 2021.

In November last year, before the emergence of the coronavirus, the agency was expecting G20 economies to grow by 2.6% in 2020.

In the UK GDP is expected to fall by 2.6%, compared to the (historically weak) 1.2% expansion seen in 2019. Moody’s said:

The G20 economies will experience an unprecedented shock in the first half of this year and will contract in 2020 as a whole, before picking up in 2021.

JCB is suspending UK production until at least the end of April as a result of the coronavirus crisis, the company announced today.

Workers will still be paid under the government’s scheme to pay 80% of the salaries of furloughed employees. Senior JCB directors will not be taking a salary “until further notice”.

The firm’s nine manufacturing plants in Staffordshire, Derbyshire and Wrexham have been closed since 18 March.

JCB CEO Graeme Macdonald said:

These are certainly unprecedented times and none of us expected to find ourselves in this situation. In announcing that all those JCB colleagues asked not to work will receive 80% of their pay, we hope to remove any financial concerns that many people will undoubtedly have had.

The Wall Street rally has picked up again: the Dow Jones industrial average has gained 3.2%.

It looks like it is Boeing that is driving the market. The plane maker is truly a stock market giant, and its shares are up by a whopping 33% today - although still only reaching levels last seen on 13 March.

Boeing has asked for a $60bn bailout for aerospace manufacturers. The company, which is one of the most successful lobbyers of the US government, is already struggling under the weight of the 737 Max safety crisis.

The S&P 500, a broader gauge less likely to be swayed by a single name, is only up by 1.3%.

Choppy trading on the currency markets. Sterling lost another half a cent against the US dollar in the space of a few minutes, before roaring back to trade flat at the time of writing.

One pound will now buy $1.1765 - that’s a fall of only 0.01% today. It’s down by 0.44% against the euro today as well to trade at €1.0857.

Even with the swings in fortune today, it has been a brutal run in recent times for the pound. Indeed, sterling fell to its lowest level on record against the currencies of Britain’s major trading partners earlier this week, points out Nigel Green, chief executive and founder of deVere Group, a financial advisor.

The Bank of England’s sterling effective exchange rate index (ERI) fell to a reading of 73.2 on Tuesday (compared to 100 in January 2005), as this slightly homemade chart going back to 1990 shows:

Green said:

These are unprecedented times. The pound is weaker now than at any point during the Brexit process, the 2008 financial crash, or 1992’s Black Wednesday when speculators forced the government’s hand in pulling the pound from the European Exchange Rate Mechanism.

First, the coronavirus pandemic has triggered a flight-to-safety. As is typical in times of economic turbulence, the US dollar attracts more buyers, in turn pulling down the price of sterling.

Second, investors are seeking liquidity and the most liquid assets of all are US Treasuries, which explains why dollars are always in demand.

Third, before the pandemic, many investors had piled into sterling anticipating more gains following a decisive general election outcome.

Splat. The early Wall Street rally had fizzled out too, leaving the Dow flat and the S&P 500 down 0.9%.

Uh oh.... the pound has lost its earlier gains, and is now down against the US dollar at $1.172, and the euro at €1.084.

A US central bank chief has warned that unemployment will rocket, in the short term, as firms hunker down to help fight Covid-19.

St. Louis Federal Reserve president James Bullard said that around 46 million people currently due jobs with a ‘high contact’ with the public, so are at risk of layoff.

“They are people who are in some kind of occupation where they have interaction with the public and that is exactly what our health authorities say is not supposed to be occurring,”

In February there were 5,787,000 Americans classed as unemployed, down from over 15m in October 2009 - after the 2008 financial crisis.

Bullard predicted “unparalleled” disruption in the next few months -- but hopes that the economy will bounce back. The last quarter of 2020 and the first quarter of 2021 could boom, he suggests.

Nearly every member of the 30-strong Dow Jones industrial average is up in early trading.

Aircraft maker Boeing is leading the way, up 18%, thanks to the Senate’s promise of $500bn in direct loan support to key industries such as aviation and aerospace.

Nike are up 8.8%, with American Express gaining 7.4%, amid hopes that the bailout package will support the US economy.

Christopher Smart, Chief Global Strategist & Head of the Barings Investment Institute, reckons the US fiscal stimulus package is an important step.

It won’t solve the economic crisis overnight, but it’s better than watching the two sides on Capitol Hill tear pieces off each other:

“They say that you can’t just throw money at a problem, but it certainly helps. Last week, the Fed did all it could to stabilise financing channels and to make sure that companies could borrow at reasonable rates in spite of the current health crisis. But access to cheap financing only goes so far when you don’t have any revenues.

“In early reports, the fiscal package that looks like it’s headed for passage seems to have exactly what businesses and households really need right now: loans, tax breaks and benefits that help replace lost revenues and family income. It probably won’t be enough when all is said and done, but it’s much better than nothing at all.

“Besides, when was the last time you saw Mitch McConnell and Chuck Schumer say nice things about the same piece of legislation?

Here’s a breakdown of the stimulus package agreed (provisionally) by US lawmakers last night:

• Direct payment to most Americans.
• $350bn in loans for small businesses that may be forgiven if firms use them to keep workers on payroll.
• $500bn in aid for hard-hit industries and states and $50bn for airlines.
• At least $75bn in aid to hospitals.

More here!

Tomorrow we discover how many Americans lost their jobs last week, as the Covid-19 crisis stuck US firms. And it could be historically bad.

A week ago, the initial jobless claims figure jumped by 70,000, to 281,000 - a two-year high.

But given the wave of layoffs and closures, economists reckon several million Americans may have filed claims for unemployment support. That would be a record, exceeding the previous peak of nearly 700,000 set in 1982.

Wall Street is currently said for a subdued open in 45 minutes, after the Dow’s best day since the 1930s yesterday.

Obviously clothes are still needed, even in an era of home working.

But it’s hard to believe that satisfying online orders for Next’s t-shirts, blouses and kidswear is so essential that staff should be travelling to stores.. lured by a 20% pay rise.

Press Association has the story:

High street fashion chain Next is offering staff a 20% boost to their pay if they turn up to stores on Wednesday, despite Government warnings to stay home.

The retailer is asking workers to travel to shuttered sites and pick clothes for online orders “to keep the company operating”, according to a letter seen by the PA news agency.

Next has told staff that “we desperately need your support to keep the company operating”. But surely the company’s bankers will be understanding, given the stern warning from the Treasury and the Bank of England today?

Several UK manufacturers are ready to join the battle to create desperately needed ventilators, and are waiting for Westminster to pick which proposals to back.

My colleague Rob Davies explains:

Manufacturers including Airbus and Dyson are waiting for the government to give the green light to start producing medical ventilators, after separately finalising plans to make thousands needed to help the NHS fight Covid-19.

The proposals vary, with Dyson offering to design and build a new ventilator from scratch and a consortium called Ventilator Challenge UK, led by Airbus, planning to scale up production of existing models.

The government, which wants to increase the number of ventilators in the NHS from 8,175 to 30,000, is considering which option to choose or whether to press ahead with both. A decision could come as soon as Wednesday, according to sources in Westminster.

Here’s the full story:

Global oil market prices may still be under pressure but the market price for a niche petrochemical used to make hand sanitisers has more than doubled to reach a new record high.

Rising demand for sanitary and hygiene products to help contain the coronavirus outbreak caused the market price of isopropyl alcohol, or IPA, to skyrocket on Tuesday to a fresh record high of €3,100 per metric tonne, according to experts at S&P Global Platts.

The price surge means chemicals giant Ineos, owned by billionaire industrialist Jim Ratcliffe, should make a decent return on plans to ramp up production of the compound from its Grangemouth refinery in Scotland.

The commodity experts said some traders were offering to pay between €5,000 to €6,000 a tonne because the chemical ingredient has become so scarce in the market following a surge in demand for hand sanitiser.

As we reported yesterday, Ineos is planning to build two hand sanitiser factories in just 10 days, and is talks with the NHS on supplying the products to hospitals for free.

The CBI’s latest survey of UK retailers is out....and confirms what we already knew: the public have been buying plenty of food, drink and essential household products, and not much else.

It says:

Grocers reported exceptionally strong growth in sales volumes in the year to March, as did specialist food and drink firms. However, most other sectors reported sharp falls in sales volumes, including clothing, furniture and ‘other normal goods’ (such as flowers, jewellery, cards etc).

So overall retail spending appears to have been flat (meaning a real ‘fast or famine’ for the high street).

You’ll be unsurprised to hear that retail sales volumes are expected to fall sharply in the year to April, with retailers more pessimistic than at any time since April 2009.

Orders placed upon suppliers fell for the eleventh consecutive month, despite a strong rise in orders placed by grocers. Orders are expected to fall across most sectors in the year to April (including grocers), with expectations the weakest since April 2009.

Just in: The government has announced that estate agents, lettings agencies and bingo halls that have closed to help stop Covid-19 spreading will be now be exempted from business rates in 2020-21.

Chancellor Rishi Sunak says the move follows the crackdown on non-essential companies :

We are determined to do whatever it takes to support businesses during Covid-19, which is why we have extended business rates relief for the high street.

Today, I am removing some the exclusions for this relief, so that retail, leisure, and hospitality properties that have closed as a result of the measures announced by the Prime Minister in his statement on Monday will now be eligible for the relief.

As traders take a break for elevenses, the rally has officially fizzled out - with stocks now slightly lower in London and Frankfurt.

Barclays is extending measures for personal banking customers and is automatically waiving interest on all arranged overdrafts from 27 March to 30 April.

It has also set up an online form for mortgage holiday applications for customers in financial difficulty, to speed up the process.
Barclays managing director Fillean Dooney said:

“It’s crucial we offer the right support to our customers through this challenging time. We have therefore decided to waive all overdraft interest until the end of April, meaning there will be no charges for customers to use their arranged overdraft.

We are reviewing all options to help customers after this time to ensure we support those in financial difficulty.”

Back in the markets, the early soaraway rally is running out of gas.

The FTSE 100 is now only 38 points up, or 0.7% - having been 4% higher in early trading.

Not racing to ‘buy the dip’ may prove to be sensible...

As well as help from their banks, UK businesses also want more clarity about whose actually allowed to stay open during the government’s lockdown.

CBI director-general Carolyn Fairbairn has tweeted that many firms are confused by the guidance:

The situation is looking somewhat messy. First, Boris Johnson told the nation to stay at home wherever possible.

Then yesterday, health secretary Matt Hancock said those who cannot work from home should go to work “to keep the country running”. This is creating a grey area for companies -- notoriously with Sports Direct trying to claim it was an essential service.

The list of UK businesses deemed vital at this time has been widened to include off-licenses - welcome news for those struggling to get through the Covid-19 crisis without a stiff drink.

Off-licences will join a list of businesses considered essential to keep the nation running, including supermarkets, pharmacies, banks and petrol stations.

But remember... only shop if it’s essential, and keep away from others where possible.

All economic data are, to an extent, dated. But in the current climate, January’s house price report is from another age.

But we should still note that UK house price growth slowed in January - to just 1.3% per year, from 1.7% in December. Prices shrank in the East and South East, but picked up elsewhere.

On a monthly basis, the average price dipped to £231,185 from £233,739.

The current position, I wager, is rather worse -- with many moves put on ice by the coronavirus crisis.

UK bank chiefs have also been reminded to ensure that credit ratings aren’t damaged by any ‘flexibility’ granted during this unprecedented time.

In other words, a company or individual shouldn’t suffer any damage if they smash through their overdraft limit or delay a loan repayment, due to cashflow problems caused by the coronavirus.

While the markets rally, Germany business confidence has troughed to its lowest level since 2009.

The IFO survey of German business morale, just released, slumped to 86.1 this month from 96.0 in February. Such a sharp slump is confirmation that Germany is heading for a steep recession.

IFO chief Clemens Fuest says:

“This is the steepest fall ever recorded since German reunification and the lowest value since July 2009.

The German economy is in shock.

Of course, we did know that already....

The pound is also rallying this morning, up 1.5 cents against the US dollar at $1.19 - its highest level this week.

It’s also up nearly one eurocent at €1.099.

The dollar and the euro have been treated as safe-haven assets in recent weeks. So sterling’s recovery indicates that the markets are becoming less anxious about the future.

Mark Haefele, CIO at UBS Global Wealth Management, says the mood is brightening, thanks to the recent measures taken by central bankers and governments.

We think the actions of monetary and fiscal policymakers should help us prevent a Global Financial Crisis (GFC) style credit crunch. Tuesday’s sharp equity rally shows that the combination of central banks’ entire GFC playbook and substantial, direct fiscal support can be well received by markets.”

The FTSE 250 index of medium-sized companies is also enjoying a good morning, up 5% at 14,935 points.

Pub chain Marstons has gained 30%, while bookmakers William Hill are up 25% -- two stocks badly hit by the government’s isolation rules (you can’t keep away from people at the bar or the bookies).

That’s quite a recovery from Monday, when the FTSE 250 fell below 12,770. But it was trading over 21,000 points in mid-February...

The rally is gathering pace!

After a hour of enthusiastic trading, the FTSE 100 index is now up 250 points or 4.6% at 5699 points (still the highest since 13 March).

Nearly every stock is up, many over 10%. There are only 6 fallers, lead by Rentokil which has lost almost 10% after warning today that Covid-19 will have a bigger impact than previously thought.

The FTSE 100 is still rising -- up 140 points or nearly 3%. That lifts it to its highest level since Friday 13 March.

That was the day after the worst session since 1987 (the index plunged over 10% in a thoroughly scary Thursday).

Fashion chain Burberry (+13%) and hotel group Whitbread (+12%) have also joined the top risers this morning.

They’ve both suffered badly from the Covid-crisis given their respective exposure to the Chinese luxury market and the UK domestic economy.

Shares across Europe are rallying this morning, pushing the Stoxx 600 index of leading companies up by over 2%:

But as you can see, they’re still down a hefty 25% or so this year (with all those losses in the five weeks)

Boom! The UK stock market has jumped at the start of trading, as investors cheer the overnight breakthrough over America’s $2trn stimulus package.

The blue-chip FTSE 100 has surged by 1.85%, or 102 points - back to 5546 points. Retail chain JD Sports are the top riser, up 13%, followed by Barclays Bank (+9.3%) amd publishing and conference organiser Informa (+6%).

That adds to yesterday’s 9% surge -- which added 452 points to the Footsie, lifting it away from its lowest levels since 2011.

Karen Ward, chief market strategist at JP Morgan, says such fiscal stimulus packages are a crucial step forwards..... but probably won’t prevent a jump in US unemployment:

“The Senate’s approval of the $2trn package should provide a positive lift to investors’ moods in the near term, complementing the U.S. Federal Reserve’s aggressive action in the past four weeks. This is particularly important given the aggressive fiscal stimulus from European and Asian governments in the past two weeks. The US government needs to be seen as not just counting on the Fed to do all the heavy lifting, especially when cutting rates and providing liquidity alone are not sufficient to help businesses and households to get through such tough times.

“The key question is whether these policies will be enough to facilitate a rebound once the virus is contained and shutdowns are removed. To answer this question we are following the employment data closely. If government policies prevent people from losing their jobs then a bounce back looks feasible. We are more confident that the stimulus policies put in place in Europe will adequately support employment. We suspect - and believe the jobless claims data out tomorrow will testify - that US unemployment is already on the rise which will prolong the period of weakness.”

Recruitment firm Staffline reports that the UK jobs market has been changed dramatically, if maybe only temporarily, by Covid-19.

It told the City this morning....

There is a marked increase in demand in the food sector, including food processing, logistics and supermarkets....

Conversely, demand from other sectors such as retail, automotive and manufacturing has diminished considerably with the Group’s limited exposure to white collar and permanent recruitment also impacted.

European markets are on track to build on yesterday’s strong gains:

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, cautions against too much exuberance:

It is worth noting that we still have very little visibility on what may happen in the weeks and months to come. With an almost certain worldwide recession looming, the virus-infected economic data will sour the mood practically on daily basis for at least the first half of the year.

In this respect, the preliminary PMI figures released yesterday were cataclysmic for most economies in March, with the services sector which accounts for an overwhelming majority of the developed economies taking an unprecedented hit due to a complete shutdown of activity.

But in the long-term, the equity markets have always recovered from the harshest shocks and came out stronger, at least in terms of pricing, following financial crisis.