European airlines resist mounting coronavirus refund claims

PARIS (REUTERS) – European airlines waiting in line for coronavirus bailouts want to tap another source of interest-free loans: their customers.

Cash-strapped carriers are seeking to suspend European Union rules requiring refunds for cancellations and instead issue vouchers to clients left out of pocket as hundreds of thousands of flights are grounded by the pandemic.

Refund claims, if honoured, would be a big additional cash drain on many airlines already in need of government aid to survive a sustained travel slump.

Consumer organisations say some major airlines are already flouting the refund rules and condemn what they describe as an attempt to force consumers to lend them cash.

“We’ve been absolutely inundated with passengers complaining they can’t get a refund from their airlines,” Mr Rory Boland of British consumer group Which? said on Friday (March 27).

The European Commission has rejected industry calls to relax the requirement in EU regulations to refund cancellations within a week, but the airlines say they are unable to comply.

“Faced with a cashflow catastrophe, many airlines can only offer vouchers in lieu of immediate cash refunds for cancelled flights,” their lobby group Airlines for Europe (A4E) said.

A prolonged shutdown would make about 3.5 billion euros (S$5.6 billion) of Lufthansa revenue eligible for refund in the second quarter, Citi estimates – ahead of the 3 billion euros at British Airways parent IAG or Air France-KLM, 770 million euros at easyJet and 760 million at Ryanair.

“Basically, we are trying to push as many vouchers as possible, and not allow for cancellations just to be refunded immediately,” Lufthansa’s finance chief Ulrik Svensson told investors last week.

A Lufthansa spokesman said on Friday that refunds remain”possible in principle,” but not “within the usual time limits.”

EasyJet and British Airways are among airlines that have made it harder to obtain refunds, by disabling them online and offering only vouchers.

Twitter on Friday was aflame with customers who had been referred to swamped call centres.

BA and easyJet said cash reimbursements remained available through their contact centres.

Air France-KLM, which like Lufthansa has grounded the vast majority of its flights, is telling clients it no longer offers the immediate refunds required under European law. Instead it is issuing a customer credit valid for one year that can be refunded only at the end of that period.

“Air France recognises clients would normally receive immediate reimbursement,” its website says, blaming exceptional circumstances and “a very high number of refund requests.”

Airlines are now asking European authorities to waive refund requirements on condition that vouchers are reimbursable after a minimum of 12 months, an A4E spokeswoman said.

The EU has already relaxed airport slot rules and passenger compensation and will offer airlines more help, Transport Commissioner Adina Valean told Reuters. “But people have to receive their money back if that is what they want.”

Consumer groups remain unmoved by the industry’s pleas. “It isn’t fair to people who have been left out-of-pocket and may be in financial difficulties themselves,” said Boland at Which? – who cited the example of a family denied a refund on their annual holiday booking to Florida.

“The airlines should not be asking to keep that family’s 2,000 pounds (S$3,556),” he said.

Citi analyst Mark Manduca said airlines must do everything they can to ensure that “fees and taxes and anything that involves complaint money can be held to an absolute minimum during this tough time.”

But he added: “As a voucher holder, you end up effectively becoming an unsecured creditor of an airline.”

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No half measures for Singapore

Having decided that this is no time for half measures, Singapore has come up with a surprisingly large stimulus package to take the edge off the coronavirus-induced economic pain.

While it may not stave off a recession, powered mainly by the panic in the global financial markets, Singapore’s response is among the most focused and forceful globally.

The total stimulus of about $55 billion represents roughly 11 per cent of Singapore’s gross domestic product (GDP), making it the largest among advanced economies after Germany and Britain.

By that measure, Singapore’s stimulus is way bigger than some of its closest competitors.

For instance, Hong Kong’s $22.4 billion aid package is about 4 per cent of its GDP. South Korea’s $13.7 billion stimulus is just 0.6 per cent of its GDP.

In the Asean region, only Malaysia has pledged more – a stimulus package of $89 billion, nearly 18 per cent of the country’s GDP.

Singapore’s political leadership has taken a risk in forking out such a large amount from a shrinking economy – a risk made more manageable by salting away large reserves in good times.

Nevertheless, economic thinking that champions free markets considers the state an inefficient conduit of income distribution.

Singapore, however, has a reputation of efficiently targeting policy measures, unlike places like Malaysia and India where fiscal leakages have been a perennial problem.

That may have been a source of confidence in the decision-making process, allowing Singapore to boldly confront the crisis with the full force of the resources available.

Despite the pace at which the economic outlook has deteriorated, prompting a second official downgrade of GDP growth in less than six weeks, the framework of the stimulus package shows no signs of haste or desperation.

Headline numbers may suggest the bulk of the stimulus is targeted at business and industry.

But the way the aid is designed will ultimately benefit the unemployed and those who may get retrenched.

The threat to jobs is real.

DBS Bank estimates total retrenchments this year will top 24,500, up from an annual average of about 14,500 in a normal year.

Referring to the stimulus, OCBC Bank’s head of treasury research and strategy Selena Ling said: “The focus is still squarely on protecting jobs, incomes and the livelihoods of Singaporeans.”

For instance, the wage offsets will help with cost relief for companies and, as a result, may protect jobs. “That’s where the up to 75 per cent wage offset will come in, very quickly and very usefully, over the next few months,” Ms Ling said.

Compare this with the US$2 trillion (S$2.9 trillion) rescue package which includes a US$500 billion fund to help industries, and a comparable amount for direct payments of up to US$3,000 apiece to millions of American families.

Several Republicans insist the Bill does not ensure that laid-off workers would not be paid more in unemployment benefits than they earned on the job.

Some Democrats have called it “a historic corporate giveaway”.

Singapore’s package, on the other hand, is more targeted.

“It is in line with the philosophy of the Singapore Government – to provide targeted help when needed, and to make good use of resources, not frittering away fiscal resources they have accumulated,” Ms Ling said.

The hardships of average Singapore families have not been forgotten.

The Government is tripling the handout each individual gets, as well as parents of young children, and also giving cash top-ups to PAssion cards, aimed at helping individuals.

Yet these particular measures will in turn help the worst-hit segments of the service sector that accounts for about two-thirds of the nation’s GDP and employment.

The payments to citizens will boost consumer confidence and their purchasing power, in turn helping the retail sector and other service providers.

The overall fiscal deficit will rise to $39.2 billion, or 7.8 per cent of GDP, according to DBS Bank’s estimates.

Still, given Singapore’s track record of fiscal prudence, a historically high deficit is unlikely to shake investor confidence in its economic management.

In fact, Singapore’s “whatever it takes” stance is probably what is really required to put a floor under this economic downturn, which has largely been a crisis of confidence.

The supply chain disruptions caused by measures to contain the spread were made worse by panic in the financial markets.

Then desperation by certain central banks virtually froze lending and borrowing.

DBS senior economist Irvin Seah said there could be more downside risks to the global outlook.

“Singapore is heading into uncharted waters, which calls for unprecedented fiscal push to buffer the economy from the incoming storm,” Mr Seah said.

The Monetary Authority of Singapore stands ready to do its part, while the Government has promised more measures if the situation demands it – whatever it takes to overcome an unprecedented crisis.

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Bank of Korea to offer $12 bln in dollar lending from Fed currency swap

SEOUL, March 29 (Reuters) – South Korea’s central bank said on Sunday it will draw on its new currency swap with the U.S. Federal Reserve to provide $12 billion of U.S. dollar funding to local banks via auctions on March 31.

The Bank of Korea will auction the dollars for seven-day, and 84-day terms at 25 basis points over the overnight index swap rate, it said in a statement.

The Fed said on March 19 the BOK is one of nine central banks it will sign new dollar swap lines with in a coordinated action to prevent the coronavirus epidemic from causing a global economic rout.

The agreement with South Korea is a $60 billion bilateral currency swap facility for at least six months.

The BOK said it will hold additional auctions to inject dollar liquidity if needed. (Reporting by Cynthia Kim, Yena Park; Editing by Simon Cameron-Moore)

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UPDATE 2-Brazil's current account deficit widest in over four years

(Adds central bank comments, forecasts)

By Jamie McGeever

BRASILIA, March 25 (Reuters) – Brazil’s current account deficit widened and financial market outflows accelerated in February, figures showed on Wednesday, highlighting the country’s deteriorating financial position even before any impact from the coronavirus outbreak had been felt.

The current account deficit widened to 2.91% of gross domestic product, the widest since December 2015, while investors pulled more than $3 billion out of Brazilian investment funds, the central bank said.

Including Brazilian stocks traded abroad, the net outflow of $4.4 billion in February was the biggest since October 2008, the central bank said.

The figures reflect the intensifying pressure on Brazil’s currency, which has lost more than 20% of its value against the dollar this year and earlier this month traded at a record low near 5.25 per dollar.

The monthly current account deficit was $3.9 billion, wider than the $3.45 billion shortfall forecast in a Reuters poll, while foreign direct investment was exactly in line with the forecast of $6 billion.

The central bank said it expects the deficit to shrink to $1 billion and net FDI flows to rise to $7 billion in March, but said a full-year deficit and FDI flows forecast will be announced on Thursday in its quarterly inflation report.

A goods trade surplus of $2.5 billion in February was wiped out by a services deficit of $2.6 billion and a primary income deficit of $3.9 billion, the central bank said.

On the portfolio side, a net $4.5 billion was pulled from Brazilian stock funds in February and $1.1 billion was poured into domestic debt securities. This resulted in a net portfolio outflow of $3.4 billion, the central bank said.

That brought net portfolio outflows in the first two months of the year to $1.9 billion, compared with a net inflow $10.7 billion in the same period last year. (Reporting by Jamie McGeever Editing by Bernadette Baum and Paul Simao)

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Coronavirus: Hong Kong booze ban may wipe out thousands of bars and restaurants

HONG KONG (BLOOMBERG) – The normally packed streets of Hong Kong’s Lan Kwai Fong bar district were virtually empty on Monday night (March 23). So too was a popular Italian eatery in Wan Chai, a neighborhood known for some of the city’s best restaurants and nightlife. In the SoHo area frequented by expat bankers and lawyers, the crowds were unusually thin.

Hong Kong’s sprawling drinking and dining scene has long been a cornerstone of life in the financial hub, where apartments are so tiny that hosting friends at home is often unfeasible. But after nearly nine months of turmoil – first caused by anti-government protests and now by the coronavirus outbreak – concern is growing that thousands of bars, clubs and restaurants across the city will be forced to close as their losses mount.

Hong Kong chief executive Carrie Lam delivered the latest blow this week, saying she would ask bars and restaurants to stop selling alcohol in an attempt to dissuade residents from gathering in large groups.

On Tuesday, Singapore followed that move by announcing a shutdown of all bars, cinemas and religious services as of midnight on Thursday. While the UK also recently shut down eateries and pubs, Boris Johnson’s government has pledged to pay rent and 80 per cent of staff salaries for the duration. Lam said Hong Kong would “certainly consider” measures to help the establishments affected, but she didn’t elaborate.

“Last summer there were 15,000 restaurants in Hong Kong, and I anticipate that by this summer there will be less than 10,000,” said Syed Asim Hussain, co-founder of hospitality group Black Sheep Restaurants, which operates Hong Kong eateries popular with expats, including two venues that have been temporarily closed in a building visited by an infected guest. “We and others are looking at three successive quarters of financial losses. So we squarely are between a rock and a hard place.”

Lam’s announcement followed a recent jump in the number of Hong Kong residents who’ve tested positive for the virus, several of whom had reportedly been out drinking in Lan Kwai Fong. Front-page photos of expats gathered at bars have featured prominently in local news outlets, alongside articles admonishing drinkers for potentially spreading the virus. Lam has indicated that she would prefer voluntary compliance with the alcohol ban, but would implement legislative measures if necessary.

Other major metro areas, including New York City and San Francisco, have effectively shut down restaurants and bars or limited establishments to takeout and delivery as the virus spreads globally. Italy, Spain and France have implemented blanket closures.

Some Hong Kong residents have questioned whether bars are truly the hot beds of transmission the government is making them out to be. “They are clearly making these decisions on the fly and with bad inputs – a few photos of people chatting in bars and a few cases from LKF, and suddenly alcohol is the cause because it lowers inhibitions,” said David Webb, an investor and corporate governance activist who has lived in Hong Kong since 1991.

At the Italian restaurant in Wan Chai, the general manager said an alcohol ban could shrink his business to less than 10 per cent of the level before protests kicked off last June.

“I can’t count how much money we’re losing,” the manager said Monday night, identifying himself as Mr Chan as he wasn’t authorized to speak about the alcohol ban. The government’s move “will kill our business a lot because our business is mainly connected to selling alcohol. We are an Italian restaurant and if you come to an Italian restaurant and you don’t drink wine or alcohol, it’s really useless. Everyone in town is really worried about this.”

Restaurant and bar receipts in Hong Kong totaled about HK$26 billion (S$4.85 billion) in the fourth quarter of 2019, down 14 per cent from a year earlier.

Some in the industry expressed frustration with a lack of information from the government, including when a ban might start.

“I think we have a responsibility to encourage people to enact social distancing – and since local media started pointing the finger at Lan Kwai Fong, customers aren’t coming anyway,” said Ravi Beryar, operations manager at Rula Live, a music and sports bar. “But my staff need to know how long it’ll be until we reopen, and my landlord needs to know.”

Allan Zeman, chairman of the Hong Kong real estate firm that developed the Lan Kwai Fong area, told Bloomberg TV that his company was appealing to Lam for government assistance for local bars and restaurants. As a landlord, he said, he could only help “up to a certain point.”

“You still have payments to banks, and repayments and other things,” Zeman said. “The operators themselves also need to be able to help themselves, but we’ll do whatever we can to tide us through this difficult period.

“The problem that my tenants have, and many of the operators have, is that if you can’t serve alcohol they’ll go out of business because they’re bars or clubs,” he said. “That’s the only thing they sell.”

Some bar operators are hoping they can find ways to keep serving alcohol while complying with the government’s calls to promote social distancing.

“We’re famous for mixed drinks and draft beer, but if we have to stop that, I hope we can sell bottled beers to customers to take home,” said Annie Lam, who runs The Beer Bay, a popular haunt for commuters transiting through Hong Kong’s central ferry pier. On Monday night, just hours after the government announced plans to ban alcohol sales, clusters of patrons were gathered around Lam’s waterfront stand.

Ronny Daswani, co-founder of carry-out craft beer shop Craftissimo in the trendy Sheung Wan neighborhood, said his store didn’t appear to be immediately included in the government’s ban and that he tentatively planned to remain open. But he added that Craftissimo sometimes attracts crowds outside, and that he was willing to shut down temporarily if it would help curb the outbreak.

“A ban would really impact Hong Kong Island,” Daswani said. “Alcohol was one of the only resorts in these hard times.”

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GLOBAL MARKETS-Asian stocks rebound, Fed soothes with boundless QE

* Asian stock markets : tmsnrt.rs/2zpUAr4

* S&P 500 futures bounce in Asia, Nikkei jumps

* Investors relieved as Fed pledge eases bond market stress

* Dollar off peaks on promise of bottomless liquidity

* Factory surveys to show extent of economic damage

By Wayne Cole

SYDNEY, March 24 (Reuters) – Asian stocks rallied on Tuesday as the U.S. Federal Reserve’s promise of bottomless dollar funding eased painful strains in financial markets, even if it could not soften the immediate economic hit of the coronavirus.

While Wall Street seemed unimpressed, investors in Asia were encouraged enough to lift E-Mini futures for the S&P 500 by 2.7% and Japan’s Nikkei 4.7%. If sustained it would be the biggest daily rise for the Nikkei since late 2016.

Europe also looked a shade brighter as EUROSTOXXX 50 futures climbed 2.6% and FTSE futures rose 2.9%.

MSCI’s broadest index of Asia-Pacific shares outside Japan jumped 3.5%, to more than halve Monday’s drop.

South Korea’s ravaged market climbed 5.2% after the government doubled a planned economic rescue package to 100 trillion won ($80 billion).

In its latest mold-breaking step, the Fed offered to buy unlimited amounts of assets to steady markets and expanded its mandate to corporate and municipal bonds.

The numbers were certainly large, with analysts estimating the package could make $4 trillion or more in loans to non-financial firms.

“What they did, more than just starting up some new programs, was to drive home they are willing to do whatever it takes,” said Tom Porcelli, chief U.S. economist at RBC Capital Markets. “We would not call into question their resolve.”

“We have every expectation that where a facility/program has some dollar limitation, that it is just the starting point,” he added. “Upsizing is a foregone conclusion. The spigots are open. Now let’s see how well they work.”

The plan helped calm nerves in bond markets where yields on two-year Treasuries hit their lowest since 2013. Ten-year yields were at 0.82%, from last week’s peak of 1.28%.

Still, analysts cautioned it would do little to offset the near-term economic damage done by mass lockdowns and layoffs.

Speculation is mounting data due on Thursday will show U.S. jobless claims rose an eye-watering 1 million last week, with forecasts ranging as high as 4 million.

Economists at JPMorgan expect claims to surge by a record 1.5 million and forecast a 14% annualised fall in U.S. gross domestic product for the second quarter. They see European GDP down almost 24% and Latin America 12%.

A range of flash surveys on European and U.S. manufacturing for March are due later on Tuesday and are expected to show deep declines into recessionary territory.

Surveys from Japan showed its services sector shrank at the fastest pace on record in March and factory activity at the quickest in about a decade.

DOLLAR OFF HIGHS

While governments around the globe are launching ever-larger fiscal stimulus packages, the latest U.S. effort remains stalled in the Senate as Democrats said it contained too little money for hospitals and not enough limits on funds for big business.

The logjam combined with the stimulus splash from the Fed to take a little of the shine off the U.S. dollar, though it remains in demand as a global store of liquidity.

“The special role of the USD in the world’s financial system – it is used globally in a range of transactions such as commodity pricing, bond issuance and international bank lending – means USD liquidity is at a premium,” said CBA economist Joseph Capurso.

“While liquidity is an issue, the USD will remain strong.”

For now, the prospect of massive U.S. dollar funding from the Fed saw the currency ease back to 110.22 yen from Monday’s one-month top of 111.56.

The euro bounced 0.7% to $1.0799, up from a three-year trough of $1.0635. The dollar index slipped 0.4% to 101.720 and off a three-year peak of 102.99.

Commodity and emerging market currencies that suffered most during the recent asset rout also benefited from the Fed’s steadying hand. The Australian dollar climbed 1.6% to $0.5925 and away from a 17-year low of $0.5510.

Gold surged in the wake of the Fed’s pledge of yet more cheap money, and was last up 1.5% at $1,576.61 per ounce having rallied from a low of $1,484.65 on Monday.

There were also signs that gold metal itself was in short supply with the premium on exchange for physical blowing out.

Oil prices also bounced after recent savage losses, with U.S. crude up 82 cents at $24.18 barrel. Brent crude firmed 64 cents to $27.67.

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GLOBAL MARKETS-Asia stocks rally, Fed launches limitless QE against economic reality

* Asian stock markets : tmsnrt.rs/2zpUAr4

* S&P 500 futures bounce in Asia, Nikkei jumps

* Investors relieved as Fed pledge eases bond market stress

* Treasury yields fall, drag down yields globally

* Dollar off its peaks, supported by liquidity flows

By Wayne Cole

SYDNEY, March 24 (Reuters) – Asian stocks rallied on Tuesday as the U.S. Federal Reserve’s sweeping pledge to spend whatever it took to stabilise the financial system eased debt market pressures, even if it could not offset the immediate economic hit of the coronavirus.

While Wall Street seemed unimpressed, investors in Asia were encouraged enough to lift E-Mini futures for the S&P 500 by 1.9% and Japan’s Nikkei by 4.9%.

MSCI’s broadest index of Asia-Pacific shares outside Japan added 1.2%, though that followed a drop of almost 6% on Monday. South Korea and Australia also recouped a little of their recent losses.

In its latest drastic step, the Fed offered to buy unlimited amounts of assets to steady markets and expanded its mandate to corporate and muni bonds.

The numbers were certainly large, with analysts estimating the package could make $4 trillion or more in loans to non-financial firms.

“This open-ended and massively stepped-up programme of QE is a very clear signal that the Fed will do all that is needed to maintain the integrity and liquidity of the Treasury market, key asset-backed markets and other core markets,” said David de Garis, a director of economics at NAB.

“COVID-19 developments remain the wild card, as is the development of government policies to support cash flow and the economy.”

The Fed’s package helped calm nerves in bond markets where yields on two-year Treasuries hit their lowest sine 2013, while 10-year yields dropped back sharply to 0.77%.

Yet analysts fear it will do little to offset the near-term economic damage done by mass lockdowns and layoffs.

Speculation is mounting data due on Thursday will show U.S. jobless claims rose an eye-watering 1 million last week, with forecasts ranging as high as 4 million.

Goldman Sachs warned the U.S. economic growth could contract by 24% in the second quarter, two-and-a-half times as large as the previous postwar record.

A range of flash surveys on European and U.S. manufacturing for March are due later on Tuesday and are expected to show deep declines into recessionary territory.

While governments around the globe are launching ever-larger fiscal stimulus packages, the latest U.S. effort remains stalled in the Senate as Democrats said it contained too little money for hospitals and not enough limits on funds for big business.

The logjam combined with the stimulus splash from the Fed to take a little of the shine off the U.S. dollar, though it remains in demand as a global store of liquidity.

“The special role of the USD in the world’s financial system – it is used globally in a range of transactions such as commodity pricing, bond issuance and international bank lending – means USD liquidity is at a premium,” said CBA economist Joseph Capurso.

“While liquidity is an issue, the USD will remain strong.”

The dollar eased just a touch on the yen to 110.90 after hitting a one-month top at 111.59 on Monday, while the euro inched up to $1.0754 from a three-year trough of $1.0635.

The dollar index stood at 102.120, off a three-year peak of 102.99.

Gold surged in the wake of the Fed’s promise of yet more cheap money, and was last at $1,564.51 per ounce having rallied from a low of $1,484.65 on Monday.

Oil prices also bounced after recent savage losses, with U.S. crude up 64 cents at $24.00 barrel. Brent crude firmed 53 cents to $27.56.

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Australia c.bank to buy up to $2.4 bln in govt bonds as part of QE

SYDNEY, March 24 (Reuters) – The Reserve Bank of Australia (RBA) proposed on Tuesday to buy A$4 billion ($2.35 billion) in government bonds as part of its quantitative easing (QE) programme to keep short-term yields around the cash rate of 0.25%.

The RBA will buy bonds maturing in December 2021, July 2022, April 2026 and November 2028, it said.

The RBA has purchased A$9 billion in Australian government bonds since it launched QE on March 20 in a bid to ensure credit was cheap and freely available across the economy as the hit from the coronavirus pandemic deepens. ($1 = 1.7013 Australian dollars) (Reporting by Swati Pandey; Editing by Muralikumar Anantharaman)

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Fed goes all in with new, unlimited bond-buying plan

WASHINGTON • The US Federal Reserve said it would buy as much government-backed debt as needed to soothe fraught markets and it unrolled a series of programmes meant to shore up both large and small businesses, unveiling a whatever-it-takes effort to cushion the brutal economic blow of the coronavirus.

“Aggressive efforts must be taken across the public and private sectors to limit the losses to jobs and incomes and to promote a swift recovery once the disruptions abate,” the central bank said yesterday morning, adding that “the Federal Reserve is using its full range of authorities to provide powerful support for the flow of credit to American families and businesses”.

The United States central bank, which restarted its massive bond-buying programme eight days ago, said it would expand well beyond the US$700 billion (S$1.02 trillion) in Treasuries and US$200 billion in mortgage-backed securities the Fed initially said it would buy.

Instead, officials will buy bonds “in the amounts needed to support smooth market functioning” – including buying government-backed debt tied to commercial real estate.

The central bank also announced that it will wade into corporate bond purchases for the first time and committed to a new small business lending programme, going far beyond its playbook from the 2008 global financial crisis.

The scope of the package is a clear indication that the Fed is throwing its full weight at confronting the economic fallout from the coronavirus, which poses a severe threat as factories shut down, people lose jobs and the economy grinds to a halt. It comes as lawmakers in Congress continue to struggle to find a fiscal response.

The Fed’s plan to bolster the corporate bond market, which has been under pressure as companies shut down in the face of the virus, is without precedent. The central bank has never before bought longer-dated corporate debt.

The two new programmes, both of which are established using the Fed’s emergency lending powers, will help companies fund themselves and ease the trading of corporate debt in the secondary market.

Federal Reserve Bank of St Louis president James Bullard predicted the US unemployment rate may hit 30 per cent in the second quarter because of shutdowns to combat the coronavirus, with an unprecedented 50 per cent drop in gross domestic product (GDP).

Mr Bullard called for a powerful fiscal response to replace the US$2.5 trillion in lost income for that quarter to ensure a strong eventual US recovery, adding that the Fed would be poised to do more to ensure markets function during a period of high volatility.

“Everything is on the table” for the Fed when it comes to additional lending programmes, Mr Bullard said in a telephone interview on Sunday from St Louis.

“There is more that we can do if necessary” with existing emergency authority. “There is probably much more in the months ahead depending on where Congress wants to go,” he added.

Mr Bullard’s grave assessment of the world’s largest economy underscores the critical need for Congress and the White House to quickly find agreement on a massive aid programme.

The Fed last week restarted financial crisis-era programmes to help the commercial paper and money markets, after cutting interest rates to near zero and pledging to boost its holdings of Treasuries and mortgage-backed securities.

“This is a planned, organised partial shutdown of the US economy in the second quarter,” he said.

“The overall goal is to keep everyone, households and businesses, whole” with government support. “It is a huge shock and we are trying to cope with it and keep it under control,” Mr Bullard added.

NYTIMES, BLOOMBERG

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U.S. clinical trials of possible coronavirus treatments to start in NY on Tuesday -Trump

WASHINGTON, March 23 (Reuters) – President Donald Trump on Monday said a clinical trial for possible treatment of the deadly coronavirus will begin in New York soon, reiterating his belief that a combination of anti-malaria drug hydroxychloroquine and the antibiotic azithromycin could beat back the global pandemic.

“Clinical trials in New York will begin on existing drugs that may prove effective against the virus,” Trump said. “We have 10,000 units going and it will be distributed tomorrow.” (Reporting by Lisa Lambert, Jeff Mason, Alexandra Alper, Steve Holland, Lisa Lambert, and Makini Brice; Editing by Sandra Maler)

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