One for the committed central bank watchers among our readers: Tiff Macklem is the new governor of the Bank of Canada (Mark Carney’s alma mater).

The crisis has proved to be something of a reckoning for the oil industry, and ExxonMobil in particular.

The company is facing increasing investor pressure to act on the climate crisis, with the Church of England’s investment fund targeting Exxon’s board over their lack of movement to tackle the biggest issue of the time.

At the same time, ExxonMobil pretty much missed the shale boom in its own back yard, and debt-fuelled expansion has left it vulnerable. In a symbol of the times, Netflix, last month overtook Exxon by market capitalisation.

And that was all before oil prices plunged. One barrel of West Texas Intermediate (WTI), the North American benchmark, will set you back less than $20 (even after rising by 6% today).

Here are WTI futures prices this year, down from above $60:

It is a sign of the strange times that investors around the world are closely following the progress of drug development. The ups and downs of the testing process for remdesivir have caused billions of pounds of money to shift around the world as people hope for an effective antiviral treatment.

Shares in the drug’s maker, Gilead, have risen by 29% this year thanks to hopes the drug (previously developed to fight Ebola) will prove effective at fighting Covid-19.

On Friday its chief executive said he expected the US Food and Drug Administration to act quickly over the company’s application for approval.

Gilead would try to get the drug to as many people as possible if it was approved, he said.

“We’re moving very quickly with the FDA,” Daniel O’Day said in an interview with NBC’s Today show, via Reuters. “And I expect that they’re going to act very quickly.”

Sterling has slipped to a one-week low against the euro, with analysts blaming Brexit back-and-forth and a general aversion to riskier assets (as evidenced by the stock market selloff).

And remember, with many investors in Europe on holiday (even if confined to their homes) it is likely that trading is thinner than normal.

The pound lost 0.7% to hit a low of €1.1408. Against the dollar sterling lost 0.5% to hit lows of $1.2525, after gaining strongly yesterday.

Reuters’ summary of the latest Brexit shenanigans said:

A source close to Britain’s negotiating team said the country was confident it can get a deal on future ties with the European Union if Brussels started treating it as an independent negotiator.

But, underlining what sources in Brussels say is an impasse at talks since Britain left the EU in January, French officials later reiterated the 27-nation bloc’s position that London must make concessions for a deal to be reached this year.

The two sides have been unable to find any compromise on three main areas - the so-called level playing field guarantees of fair competition, governance and fisheries policy, according to the sources in Brussels and London.

Ricardo Evangelista, senior analyst at ActivTrades, a trading platform, said the pound was hit because it is seen as less of a safe haven given the added political risk. He said:

The main driver for sterling’s weakness is the change in market sentiment to a more sombre mood, and this won’t support currencies that are more closely linked to risk.

Heathrow airport has warned that it may soon follow British Airways in announcing mass redundancies unless the government restores confidence by planning for how flying could restart.

The chief executive, John Holland-Kaye, said physical distancing measures could not work in airports and common international standards for health controls were needed, such as temperature screening at the entrance to airports and the wearing of face masks throughout the process to ensure a low risk of transmission.

Passenger numbers at the UK’s largest airport fell by 97% in April, and Holland-Kaye urged the government to take a lead in developing a global agreement for new measures.

Full report here:

An interesting side note to Royal Bank of Scotland’s results this morning: as well as a big impairment for bad debts related to the crisis, it is closing its effort to create a digital-first lender to rival the likes of Monzo, Revolut and Starling.

That project, named (fairly inexplicably) as Bó, appears to have failed - although RBS said it was just deciding to roll the technology and the brand under its Mettle brand for lending to small businesses.

You can read the full report on the RBS results here:

The unions have had some time to swallow the bitter pill that is Ryanair’s decision to cut as many as 3,000 jobs. Unite will argue that the decision should be reversed.

Referring also to British Airways’ decision to cut 12,000 jobs, Unite national officer for aviation Oliver Richardson said:

This is another premature announcement, especially while the government’s job retention scheme remains fully up and running.

Ryanair has significant cash reserves and is in a better place than many airlines to cope with the challenges that the Covid-19 pandemic has created.

The union also called for the government to intervene with aid for the sector, despite concerns over its environmental impact.

Most of Europe may be on holiday today, but for investors in the UK and US May day is not looking very relaxing.

The FTSE 100 has lost 2.1% so far, to 5,775 points. The FTSE 250 is down by 1.7%.

Markets in the US open in just over three hours, and stock market futures are pointing to heavy declines. The Nasdaq is set to fall 2.5%, the Dow Jones industrial average is expected to lose 1.9% and the S&P 500, the most important benchmark, is set to lose 2%.

An interesting story on the insurance industry this morning: the Financial Conduct Authority wants the courts to clarify whether businesses can claim money for business interruption caused by the coronavirus.

The Cit watchdog also told all insurers to assess whether they should be giving partial policy refunds during the pandemic.

A lot of companies have been distraught to hear that their insurance will not pay out because pandemics are not covered by their terms. Fine print like that has helped the insurance industry to weather the first storm (although recession will likely weigh on their profits eventually).

Christopher Woolard, interim chief executive of the FCA, said:

We have been clear that we believe in the majority of cases, business interruption insurance was not purchased to, and is unlikely to, cover the current emergency. However, there remain a number of policies where it is clear that the firm has an obligation to pay out on a policy.

In addition to this court action, the current emergency has altered the value of some insurance products and we believe that insurers should be looking at both whether their products still offer value.

Huw Evans, director general of the Association of British Insurers, said:

This is a welcome step from the FCA and insurers will look to work closely with the regulator to make this process a success.

Although the vast majority of business interruption policies do not cover pandemics and the Government has confirmed it will not seek to retrospectively amend contracts, we support any process that will provide clarity and certainty for the minority of customers who are disputing whether they should be covered.

Battening down the hatches is the metaphor of choice to describe the Bank of England’s lending data, as the coronavirus storm hit.

The data don’t contain any of the government’s emergency loan schemes, so expect much more in April.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said:

April data will be more illuminating, as they will reflect the impact of the furlough scheme and rising unemployment on households’ incomes and cash holdings. But with all households seemingly running a very tight ship at present, excess savings should accumulate this year, potentially laying the ground for a strong rebound in spending in 2021, when the virus should no longer be a threat.

Back on those extraordinary Bank of England data, households paid back £2.4bn of credit card debt - suggesting a huge fall in consumption that almost certainly augurs a recession.

There was £5.4bn less lending to households than February - and that was with only a week of full lockdown. April’s data will certainly be interesting...

Businesses work differently to households: they took on new loans at record rates as they tried to secure liquidity, while also piling up as much cash as possible in their bank accoutns.

Overall sterling money holdings and borrowing - basically what cash companies and households have easily to hand - both rose to their all-time series highs, of £57.4bn and £55.3bn respectively.

It is a torrid time for Trafford Centre owner Intu, facing the prospect of companies unable or refusing to pay rent in its shopping centres.

The Guardian’s Joanna Partridge writes:

Intu says it’s offering monthly rental payments to its retail tenants, but is scathing about “large, well-capitalised brands who have the ability to pay but have chosen not to”.

As it grapples with a collapse in rental income, the owner of the Trafford Centre in Manchester and Lakeside in Essex has agreed waivers with some of its lenders, particularly the seven banks which provide its overdraft facility, to prevent potential breaches. It had warned in late March that it would breach the terms on its debt commitments following a collapse in rent.

The final reading of IHS Markit’s manufacturing purchasing managers’ index (PMI) confirms what we already knew: it is a dire situation for British factories.

The UK’s manufacturing PMI reading came in at 32.6 in April, slightly worse than the flash reading of 32.9. That’s confirmed as a record low.

A reading of 50 is expansion, so 32.6 is... very low.

There were survey-record contractions in output, new orders, employment and new export business. Lead times for products were also at record levels as supply chain disruptions hit.

Rob Dobson, director at IHS Markit,said:

UK manufacturing suffered its worst month in recent history in April, as output, orders books and employment all fell at rates far surpassing anything seen in the PMI survey’s 28-year history.

Huge swathes of industry were hit hard by company closures, weak global demand, lockdowns and social distancing measures in response to COVID-19. The only pockets of growth were seen at firms making medical and food products.

Some interesting moves on currency markets after Donald Trump last night suggested that he might try to hit China with more tariffs in retaliation for its role in the crisis.

The US president said last night that a trade deal with China was now of secondary importance to the coronavirus pandemic. He also threatened new tariffs on Beijing and said he had seen evidence for the unproven theory that Sars-CoV-2 originated in a Wuhan infectious disease lab.

The prospect of another bout of economic warfare has weighed on the Chinese yuan traded in Hong Kong.

The British and Irish aviation industry appears to be running what basketball fans might term a full court press when it comes to requesting state aid: Heathrow Airport’s boss is also asking for help.

John Holland-Kaye, according to Reuters, has said the government maybe doesn’t understand how important aviation is for the rest of the economy. Virgin Atlantic (a major presence at Heathrow) may go bust without help, he said.

It is disappointing that the UK stands out from other countries in not offering state aid to its airline industry, he said.

That echoes the criticisms of Ryanair’s chief executive. However, the UK government has been wary of bailing out airlines and their wealthy shareholders - particularly the billionaire-controlled Virgin Atlantic.

There has also been sustained pressure for the government not to help some of the economy’s biggest polluters without conditions that they cut emissions.

Heathrow’s comments came as it reported that passenger numbers declined by 18.3% during the first three months of 2020 to 14.6m and are expected to bedown by around 97% in April.

Spending has been reduced by £650m. The airport could sustain itself for 12 months even with no passengers, it said.

In the barrage of corporate news earlier, we didn’t cover Nationwide’s house price index, which showed that the housing market was actually heating up before the crisis.

Annual house price growth increased to 3.7% in April, up from 3% in March-the fastest pace since February 2017 (when annual growth was 4.5%).

That was the seventh month of growth in a row. The average price was £222,915.

But with something of a caveat: it didn’t take into account the biggest health and economic crisis of our lifetime. Before the lockdown unemployment and borrowing costs were low, while the general election had given buyers some short-lived certainty.

Robert Gardner, Nationwide’s chief economist, said:

It’s important to note that the impact of the pandemic is not fully captured in this month’s figures. This is becauseour index is constructed using mortgage approval data, and there is a lag between mortgage applications being submitted and approved.

Indeed, circa 80% of cases in the April sample relate to mortgage applications that commenced prior to the lock-down, and hence before the full extent of the impact of the pandemic became clear.

Here are the graphs. Note the recent pick-up:

Refunds for customers with cancelled flights will be issued “in a month or two”, O’Leary added.

Ryanair’s regional bases (outside major hubs such as Stansted, Gatwick, Manchester and Birmingham) could shut, O’Leary said.

There will be final announcement by 1 July, he said:

Some of the other regional bases will be very marginal this winter.

The return to normal tourism volumes could take as long as three years, O’Leary said.

Ryanair’s O’Leary has also hammered home his point about state aid, saying that his airline and others that don’t have government support face a “torrid couple of years”.

He said:

When we have to come back we’ll have to compete with airlines that have limitless state aid funds to enable them to engage in below-cost selling.

It’s going to be a torrid couple of years for airlines like Ryanair, BA, and others who don’t get state aid.

It’s going to be a great couple of years for passengers: you will see lower air fares, you will see, certainly this summer, lower hotel prices in place like Spain, Portugal and Italy as they try to recover something of their tourism season.

Ryanair’s job cuts will start in July, subject to consultations with unions.

The airline said:

As a direct result of the unprecedented Covid-19 crisis, the grounding of all flights from mid-March until at least July, and the distorted state aid landscape in Europe, Ryanair now expects the recovery of passenger demand and pricing (to 2019 levels) will take at least two years, until summer 2022 at the earliest.

The job cuts will hit pilot and cabin crew jobs mainly. There will also be unpaid leave, and pay cuts of up to 20%, and the closure of a number of aircraft bases across Europe until traffic recovers. Job cuts and pay cuts will also be extended to head office, Ryanair said.

Group chief executive Michael O’Leary has extended a 50% pay cut from May until the end of March 2021.

Our early report is available here:

The FTSE 100 has lost 2.1% in the opening minutes of trading.

RBS is actually one of only four risers this morning - thanks largely to its continued profitability.

Oil companies are dragging back the index, while Ryanair’s budget airline rival easyJet is down 4.9%.