Fed rolls out $2.3tn stimulus as US jobless claims surge by 6.6m

The dance towards an oil production cut continues.

Russia’s wealth fund head has told Reuters that Saudi Arabia and Russia have overcome their differences – but that it is very important that countries outside the Opec+ cartel (such as the US, Canada and Brazil) share the pain.

The number being bandied about is edging back up to the 20m barrels per day mark that caused the spike in oil prices earlier this afternoon.

From Reuters:


OPEC, Russia and other allied producers, a grouping known as OPEC+, are considering cutting their oil output by more than 12m barrels per day and want other producers to contribute cuts of 5m, an OPEC+ source said on Thursday.

Dominic Raab, standing in for Boris Johnson, is giving the government’s daily briefing.

Johnson remains in intensive care.

You can follow Raab here:

There is a lot going on in markets today: while the Eurogroup wrangling nears its end and markets digest the Federal Reserve’s massive stimulus, the oil price surge has pretty much reversed.

Brent crude futures prices are now only up by 1.2% today, at $33.23 per barrel. They broke through the $36 mark barely 90 minutes ago.

Take a look at the spike in the below graph. Opec meetings are always the occasion for oil price volatility, but with so many factors in play (Russia, the US, the coronavirus recession) there is a lot of scope for big swings.

Opec sources told Reuters a production cut of 20m barrels per day could be in order – about a fifth of global supplies – but there are doubts as to whether that is achievable.

Brent crude prices spiked on Thursday.

Brent crude prices spiked on Thursday. Photograph: Refinitiv

EU finance leaders are “very close” to a deal, says Eurogroup president Mário Centeno. Remember, there is €500bn (£438bn) in economic aid on the table.

There are some very pointed references to the need to compromise to get the rescue package through in Centeno’s video message. He said:


We either sink or swim together. This is a true emergency. This is global.

Mário Centeno
(@mariofcenteno)

We are very close to an agreement. I trust – I still trust – that this time we will ALL rise to the occasion. And show the necessary spirit of compromise, which is the bedrock of our Union #Eurogroup #COVIDー19 pic.twitter.com/C6TVYSbIET

April 9, 2020

FTSE 100 records strongest weekly gain since January 2009

That final bump (with markets closed tomorrow, Good Friday) means that the FTSE 100 has enjoyed its best week since the global financial crisis a decade ago.

The FTSE 100 gained 2.9% today*, closing at 5,842.66 points, the final figures show. That’s a weekly gain of 7.8%, the biggest since January 2009.

Germany’s Dax has also jumped this week, with its best weekly performance since November 2008 – after a 10.9% gain.

The gains on Wall Street are even bigger at this point: the S&P 500 is on track for a 12.2% increase, its biggest weekly rise since 1974. Otherwise only the dead cat bounces of the Great Depression rival this week’s move.

*This post has been corrected: the FTSE 100 gained 2.9% today, not this week as was initially said.

Updated

Mark Sweney

Aerial view of the Millennium Dome structure with masts and roof structuure in place.

Aerial view of the Millennium Dome structure with masts and roof structuure in place. Photograph: qaphotos.com/Alamy Stock Photo

London’s O2 arena, once known as the Millennium Dome, is to be turned into a training facility for NHS staff working at the new Nightingale field hospital set up nearby.

The 20,000 seater stadium, which was due to host acts including Snoop Dogg, the Pussycat Dolls and Whitesnake, will be used as an educational training facility. No patients will be treated on site.

Mobile phone company O2, which has a £125m naming rights deal for the east London venue, has handed over the keys until 29 June. The company said the NHS is not being charged a hire fee.

European stock markets have just closed – with the Fed’s huge stimulus package (I believe Jerome Powell said there were nine separate programmes) buoying shares.

The FTSE 100 has provisionally gained 2.8% to reach 5,837 points.

Germany’s Dax gained 2.2%, while France’s Cac 40 rose by 1.2%.

The broad Stoxx 600 index gained 1.6%.

EasyJet defers aircraft purchases amid shareholder row

EasyJet aircrafts parked at an empty Schiphol Airport.

EasyJet aircrafts parked at an empty Schiphol Airport. Photograph: Niels Wenstedt/SOPA Images/REX/Shutterstock

Budget airline easyJet has said it has agreed with Airbus to defer the delivery of 24 planes as it tries to placate its largest shareholder’s demand they cancel the orders.

EasyJet will delay the receipt of 10 planes, this year, 12 next year, and two in 2022, according to a stock market announcement. It could defer another five in 2022 if demand does not pick back up. Within the next 16 months easyJet also has 24 operating leases due for renewal which it could delay or cancel.

Airbus has cut back its plane production rate to cope with lower demand, with airlines trying to hoard cash as they go for months without revenues.

And easyJet’s founder and largest shareholder, Stelios Haji-Ioannou, has repeatedly called (in very colourful terms) for the airline’s orders for new planes to be scrapped.

Johan Lundgren, easyJet chief executive, said:


Our industry is facing unprecedented challenges which require unprecedented action. As we have consistently said, we remain completely focused on improving short term liquidity and reducing expenditure across the business. Today I am pleased to announce that we have agreed with Airbus to amend our delivery schedule by deferring the purchase of 24 aircraft, providing a significant boost to our cash flow and a vast reduction to our near-term capex programme.

In addition, we have 24 leases up for renewal over the next 16 months, which gives us another level of flexibility to respond to future demand.

Euro gains as Germany hints at EU recovery deal

The euro has risen to its highest level today after Germany’s finance minister, Olaf Scholz, said it appeared that the EU would reach a deal on an economic support package.

EU finance ministers had reconvened today after failing to agree a deal on Tuesday in 16-hour talks. A dispute between Italy and the Netherlands over possible debt sharing had held up agreement.

Italy’s prime minister, Giuseppe Conte, has warned of the break-up of the European Union, as unprecedented pressure was piled on northern states to give way and unlock €500bn (£438bn) of economic support for the countries hit hardest by the coronavirus pandemic.

The euro hit a hig of $1.0943 against the US dollar. It has gained 0.7% today.

Stefan Leifert
(@StefanLeifert)

German Finance Minister Olaf Scholz on today´s Eurogroup meeting: “It looks like an agreement is possible today.”

April 9, 2020

Updated

Here is a flavour of the big jump in oil prices in recent minutes.

Brent crude futures prices, the North Sea oil benchmark, rose to almost $36 per barrel, slightly below their highest level since the crisis hit Europe in the middle of March. Prices have fallen as low as $33 per barrel today.

Brent crude futures prices have risen after reports of a possible cut to output.

Brent crude futures prices have risen after reports of a possible cut to output. Photograph: Refinitiv

Oil prices jump on reports of deal to cut production

Oil prices have surged after reports that a production cut is imminent. Brent crude futures prices have risen by as much as 10%.

Here’s the Reuters report on the potential deal:


OPEC and other oil producers will debate on Thursday oil cuts as big as 20m barrels per day, equivalent to about 20% of global supplies, one OPEC source and a Russian source told Reuters.

“That is a global deal,” the OPEC source said.

He did not specify if the United States would be involved – something Russia and OPEC producers have insisted on.

Another OPEC source and a separate Russian source told Reuters that Russia and Saudi Arabia had managed to remove their main obstacles to agreeing a new deal on oil cuts.

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