Name calling

In the latest chapter of its dispute with the U.S. over the coronavirus outbreak, Chinese state media have rounded on Secretary of State Michael Pompeo,  calling him evil and a liar. The outlets, however, did not directly attack President Donald Trump, a tactic which authorities there have used to avoid direct confrontation with him while satisfying their domestic audience. The tensions do mean  increasingly distant chances of the “phase one” trade deal reached in January becoming part of a broader truce between the nations.

Germany says…

The European Central Bank was given a three-month ultimatum by Germany’s top court this morning to fix its asset purchases program after judges ruled it is unconstitutional. The 7-to-1 ruling said the purchases aren’t backed by European treaties, and ordered that the Bundesbank no longer participate in the program and sell its already substantial holdings should the ECB fail to satisfy the court’s demands for an explanation as to how the purchases are proportional. The court said that while the buying does not breach the rules prohibiting monetary financing, the German government should have challenged the March 2015 ECB decision.

Getting out

California, the first state to shut down its economy, will start loosening its lockdown on Friday as Governor Gavin Newsom expressed confidence the coronavirus outbreak had reached a peak. In Europe, most economies are taking steps to unwind the curbs introduced to stop the spread of the disease. The evidence of the damage already done is mounting, with unemployment in Spain surging again in April, and U.K. car registrations falling to the lowest since 1946 last month. The OECD is warning that a quick rebound to pre-virus levels of global growth looks unrealistic.

Markets rise

The reopening of economies continues to boost sentiment, pushing global equities higher. The jump in oil prices driven by further production cuts is also helping risk appetite. Overnight, the MSCI Asia Pacific ex-Japan Index added 0.7% overnight, which much of the region still on holiday. In Europe, the Stoxx 600 Index had risen 1.4% by 5:50 a.m. Eastern Time, holding gains despite a brief wobble in the wake of the German court decision. S&P 500 futures pointed to more green at the open, the 10-year Treasury yield was at 0.675% and gold slipped below $1,700 an ounce.

Coming up…

U.S. March trade balance data is at 8:30 a.m., with April services and composite PMIs at 9:45 a.m. and ISM non-manufacturing at 10:00 a.m. Chicago Fed President Charles Evans, Atlanta Fed President Raphael Bostic and St. Louis Fed President James Bullard all speak today. Trade talks between the U.K. and the U.S. kick off. In earnings today, Walt Disney Co. is expected to show a severe hit to its performance with theme parks closed and movie releases halted. DuPont de Nemours Inc., Fiat Chrysler Automobiles NV, Beyond Meat Inc. and Electronic Arts Inc. are among the many, many other companies announcing results.