Good morning. Global markets are set to slump for a second day following comments from Fed Chairman Jay Powell on Wednesday that the economic recovery could be slow.
Mr Powell said the threat of a lasting downturn could deepen without additional US government spending.
5 things to start your day
1) Raising taxes could hit a recovery from the coronavirus recession following a record-breaking crash in March, economists have warned. Documents seen by The Telegraph show that officials are considering big tax hikes to plug the ballooning budget deficit.
2) Keeping schools closed delivers a double blow to productivity: The 5.3 million workers in the UK’s manufacturing and construction industries – many of whom are parents – are being “positively encouraged” to take up tools after lockdown, while childcare arrangements remain unclear.
3) Housing market could take nine months to recover: As agents and show homes reopen across the country, a closely followed survey by industry trade body Rics revealed that a wave of deals collapsed while the market was shut and many property insiders now expect price falls.
4) Lloyd’s predicts pandemic will inflict record $203bn losses on insurers: Only Hurricanes Katrina, Rita and Wilma in North America in 2005, which resulted in payouts worth $116bn, has inflicted larger claims against insurers.
5) Airbus could axe more than 10,000 staff within days as the European aerospace behemoth slashes costs in the face of a collapse in air travel. Executives are due to hold a high-level conference call next week to thrash out details of where the blow will fall among the company’s 134,000 staff amid the worst ever crisis for the industry.
What happened overnight
Asia’s stock markets fell and gold hit a one-week high today as concern about a second wave of coronavirus infections and a dour assessment of the way back from the head of the US Federal Reserve dashed hopes for a quick recovery.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell one per cent, while Japan’s Nikkei fell about 0.7pc.
US stock futures fell 0.2pc, after the S&P 500 index’s worst two-day drop in nearly a month.
Benchmark indexes in Australia, Hong Kong, Korea and China all fell about one per cent.
Wall Street’s three major indexes closed lower for a second day in a row.
The Australian dollar slipped to a one-week low of $0.6420 after the country posted its biggest plunge in employment on record.
A rising greenback also held the kiwi under 60 cents at $0.5974 and had the euro and pound under pressure.
Coming up today
Interim results: Arrow Global, Countryside Properties, Grainger, Helios Towers, Titon Holdings, WH Smith
Full-year results: 3i Group, Balfour Beatty, Forterra
Trading statement: Hargreaves Lansdown
Economics: Rics housing survey (UK), inflation final reading (Germany), ILO unemployment (France), jobless claims (US)