- Stock markets and oil rise on hopes lockdowns will be eased
- Euro slips after German court ruling on ECB scheme
- Finalised UK composite PMI reading for April comes in at record low
- US PMIs point towards looming recession
- UK new car registrations drop to lowest level since 1946
- Ryanair passenger numbers drop 99.6pc
- 100,000 desperate small firms seek coronavirus Bounce Back loans
- Ben Marlow: Disastrous April car sales mark the end of an era
Well that's all from us today, join us again tomorrow bright and early.
Here's a quick market summary...
Equities rallied as investors cheered a further easing of lockdowns in some countries, which offset fears of a renewed trade war between China and the United States.
Oil also rose as the economic outlook seemed to brighten with the markets' peak-to-trough fall now less than half what it was earlier in the crisis.
With signs that the spread of coronavirus is easing, governments in Europe and parts of Asia-Pacific as well as some US states have begun to allow businesses to reopen.
"Markets have reacted to the fact that it seems that there is a little light at the end of the tunnel," Scope Markets analyst James Hughes told AFP.
"Lockdown easing in the likes of Spain and Italy has led to many looking at timelines for many aspects of life reopening," he said.
What to look forward to tomorrow:
- Interim results: Metro Bank, Virgin Money
- Full-year: Clarkson, Ocado
- Trading statement: Direct Line, ITV, OneSavings Bank, Smith & Nephew
- Economics: Construction PMI (UK); services and composite (eurozone); ADP employment change (US)
Pfizer tests patients in US
Drugs giant Pfizer has begun testing patients in the US for its experimental vaccine to fight Covid-19.
Pfizer, which is working alongside German drugmaker BioNTech to create the immunisation, said it has commenced clinical trials of its vaccine BNT162 in the US after conducting the first tests on humans in Germany last month.
Phase one of the US trials will see up to 360 healthy patients dosed with the vaccine, with subjects aged between 18-55 tested first to determine whether it is safe to be given to older patients between the age of 65 to 85, Pfizer said. The programme includes four vaccine candidates, which contain genetic material called messenger RNA, or mRNA.
Each candidate represents a different combination of the mRNA genetic code which tells cells what to build in order to produce an immune response for the virus.
Grosvenor Group makes properties available to key workers
The Grosvenor Group has made several properties in affluent Mayfair and Belgravia available to key workers to support local communities through the coronavirus pandemic, my colleague Simon Foy writes.
The Duke of Westminster’s property firm said it has provided “practical and financial support” to help businesses and individuals overcome the impact of the crisis.
The group said it has also offered rent deferrals to vulnerable retail tenants, and waived forthcoming rent payments for 26 charities within its London portfolio. It added that it is helping suppliers with cash flow issues by paying them “promptly and in advance”.
Mark Preston, the group’s chief executive, said: “Over the last several weeks, with the full support and encouragement of the Duke of Westminster… [we] have acted quickly to help our tenants, customers, partners, communities and of course our people, deal with the impact of coronavirus.
“As we continue to review the support we are providing on an ongoing basis, adapting our response as needed to ensure we continue to do all we can to help our communities, we are also ready to advance our ambitious business plans to deliver long term growth and social benefit”.
It came as the firm reported a 50pc drop in profits in 2019, following its decision to accelerate UK asset sales in anticipation of a weaker property market. The group said it has “considerable liquidity to weather the impact of coronavirus”.
FTSE 100 edges higher
London's benchmark index ended 1.66pc higher at 5,849.42 while the domestically-focused FTSE 250 climbed 0.89pc to 16,093.14.
Germany’s DAX gained 2.5pc and the Europe-wide Stoxx 600 index rose 2.1pc
BP and Royal Dutch Shell are were some of the biggest gainers on the FTSE 100 thanks to the rally in the oil market.
Total shares were also in demand today after the oil company confirmed that it will keep its first quarter dividend on hold at €0.66.
Air Partner hired to fly in migrants who can pick Britain's crops
Plane charter business Air Partner has been boosted by a scramble to fly in migrant workers who can pick Britain's crops, amid growing fears of a huge staff shortage.
The London-listed firm said demand for its planes hit record levels as the world was gripped by coronavirus lockdowns in April – driven partly by demand for aircraft to bring agricultural labourers to Britain.
It highlights the lengths to which companies are going to recruit fruit and vegetable pickers, as concerns mount that fresh produce could be left to rot in the ground.
Norwegian Cruise: 'substantial doubt to continue as a going concern'
Norwegian Cruise has warned investors that it might be forced to go out of business.
In a statement it said:
Covid-19 has had, and is expected to continue to have, a significant impact on our financial condition and operations, which adversely affects our ability to obtain acceptable financing to fund resulting reductions in cash from operations.
The current, and uncertain future, impact of the Covid-19 outbreak, including its effect on the ability or desire of people to travel (including on cruises), is expected to continue to impact our results, operations, outlook, plans, goals, growth, reputation, cash flows, liquidity, demand for voyages and share price.
Shares are down more than 20pc on the back of the news.
Europe set to close higher
Stocks have been more bullish in Europe today, despite the euro slumping lower, as traders are hopeful the lockdown restrictions will be eased and economic activity will be increased.
David Madden of CMC Markets says:
A number of counties have already reopened sections of their economies, and traders are banking on a continuation of that process.
Earlier in the day, equity markets were pushed lower by a ruling from Germany in relation to the ECB’s asset purchasing programme, but indices have recouped the lost ground.
We will take a closer look at the final numbers once markets close.
Waitrose opens new warehouse in London to double online orders
Waitrose is ramping up its online delivery efforts with a new depot in London to meet the threat from Marks & Spencer, my colleague Laura Onita writes.
The grocer is opening a new warehouse in Enfield on Thursday to double the number of orders in the capital by September when its tie-up with Ocado ends.
Waitrose has ploughed £100m in its online business. The site will create 370 jobs, building to 850 when at full capacity, and it will add up to 13,000 delivery slots for Londoners.
Last year, Ocado ended a 20-year relationship with Waitrose by selling a 50pc stake in its grocery business to M&S.
Since the outbreak took hold, its home delivery arm has been boosted from people staying at home and ordering groceries.
“While doing all possible to respond to the much increased need for slots, demand is still far outstripping the number Waitrose can reach,” it said.
The company said 35pc of orders last week went to vulnerable and elderly shoppers.
US PMIs mixed
April PMI readings for the US’s services industry are in – and they’re bad, but mixed.
On IHS Markit’s gauge, for which we’ve just received finalised readings, both the composite and services gauges dropped below their ’flash‘ readings, crashing to 27 and 26.7 respectively. As a reminder, a reading below 50 indicates contraction.
IHS Markit, which gathered the data, reported:
The latest data signalled a substantial decline in business activity across the U.S. service sector in April, as the COVID-19 outbreak escalated and emergency public health measures intensified. The rate of contraction accelerated to the fastest on record as client demand slumped and many businesses closed temporarily.
We’ve also got the (older, and more closely-watched) ISM non-manufacturing gauge, another measure of services. That’s come in higher than expected at 41.8, versus 42.5 last month. Economists were anticipating a reading of 38. That’s the lowest reading since 2009, but perhaps not as devastating a drop as might be expected:
It appears mobile network O2 is having some issues:
That’s obviously fairly inauspicious following the revelation of the group’s big plans yesterday:
Virgin Atlantic ditches Gatwick and cuts 3,000 jobs
Just in: Virgin Atlantic is to cull more than 3,000 staff and abandon Gatwick airport as it reels from the fallout of the coronavirus epidemic.
My colleague Oliver Gill reports:
Staff at the Sir Richard Branson-backed airline were told on a conference call on Tuesday afternoon.
The cuts, which represent 40pc of the airline's workforce, are the latest move as bosses scramble to secure a future after Covid-19 brought passenger operations to a near standstill.
Last week British Airways and Ryanair announced 12,000 and 3,000 redundancies respectively.
- We have a developing report online here – check back later for updates: Virgin Atlantic cuts 3,000 jobs and ends Gatwick flights
Pound and oil strengthen on risk-hungry mood
The pound has pushed higher against the dollar today, againing ground amid a generally risk-on mood across markets (despite the ECB drama).
Meanwhile, oil prices have also risen amid hopes easing lockdown restrictions will prove a fillip for demand:
Oanda’s Craig Erlam said:
Stock markets are making decent gains across Europe and Wall Street is preparing for a healthy open as well, with futures up around 1pc as the bell nears.
The rebound started late in the US session on Monday and was led by energy stocks as crude prices continue to rebound strongly. Production cuts combined with reopening measures across the US and Europe seem to be behind the rally in oil prices, although we're still at extremely low levels and capacity is still fast running out.
Here are the day’s top stories from the Telegraph Money team:
40m workers furloughed across eurozone
Bloomberg Intelligence’s number wonks have taken a look at furloughing schemes across Europe – and estimate more 40m workers across the continent have been placed on such scheme. Here’s more from Bloomberg’s report:
More than 40 million workers have been furloughed during the shutdowns, based on data from the region’s biggest economies, getting a portion of their pay covered by the state. Without the government support, many might have lost their jobs, sending unemployment soaring to levels never seen before.
Bloomberg Economics estimates if all workers at risk were to become unemployed, the jobless rate across Germany, France, Italy, Spain – the four largest economies in the euro area – could soar as high as 42pc at the peak of the lockdown.
That would be a huge blow to the euro-region economy, where the labor market only slowly improved after the dual devastation of the global financial crisis followed by the region’s sovereign debt crisis. To prevent a repeat of that, governments have stepped up.
Their estimated spend on furlough programs will amount to about €100bn ($110bn) from March to May in the biggest economies.
Lockdown restriction provide a boost for HelloFresh
HelloFresh bumped up sales forecasts for the year as demand for its home delivered meal kits soars under global lockdown restrictions.
My colleague Hannah Uttley reports:
The German company delivered 111m meals to households during the first three months of the year, as sales jumped by two-thirds to €699.1m (£608.8m).
HelloFresh benefitted from a 68pc jump in active customers, which totalled more than four million during the first quarter.
Meanwhile, significantly lower marketing costs during the period helped HelloFresh swing from a €26.1m loss to post a €63.1m profit.
Despite continued uncertainty surrounding the pandemic, HelloFresh now expects full-year sales to increase by between 40 and 55pc, compared with previous forecasts of 22 to 27pc.
HelloFresh is a subscription service which provides ingredients as part of boxed meal kits that customers cook at home. The group has benefitted from the closure of restaurants around the world during the crisis, which has boosted demand for home-cooked meals.
Reaction: Markets digesting complex ruling
Markets.com’s Neil Wilson has summarised some of the thinking around the German court ruling that has rattled markets today:
Without being German constitutional experts, it seems to boil down to the central bank ‘proving’ to a German constitutional court that its actions were taken in good faith and were proportional to the economic risks. Are the German judges saying the ECB didn’t know what it was doing? How do you retrospectively argue that your actions were proportionate? It seems absurd to think that the ECB ever committed to anything that it considered disproportionate.
PEPP is not affected by the decision, despite the looser rules. This may imply that it is already viewed as ‘proportionate’, in the eyes of the judges. However, the point was this case dates back years to PSPP and never was about PEPP – what is to stop cases being lodged now in relation to PEPP?
Fundamentally, anything that throws doubt on the ability of the ECB to provide the backstop to the bond market is a concern. The market is trying to figure this one out as the ruling is complex. For now, downside risks persist for the euro and bonds, especially peripheral debt, will be under pressure. We await the ECB’s response with the utmost interest.
IG Group’s Chris Beauchamp added:
As constitutional experts scramble to work out what the ECB will have to do in order to satisfy the hardliners in the German court, markets have seen a hit to risk appetite, as once again the potentially-fatal weakness of the eurozone system comes into play. Without a single authority to implement fiscal decisions, the nations of the eurozone must find common ground, making coherent and, importantly, rapid policy-making difficult at best.
McDonald’s names sites for re-openings
Dipping away quickly from European economic drama, here’s the latest on, uh, McDonald’s, via PA:
McDonald's has revealed the locations of the 15 restaurants it plans to reopen next week after closing all its sites in March to help slow the spread of coronavirus. The fast-food chain said the sites will open from 11am next Wednesday and will offer a limited menu for delivery only between 11am and 10pm. There will be added safety measures in place.
The sites are largely clustered in and around London, and include three restaurants in Luton, two in Chelmsford, and one in Ipswich. Sites in Tooting, Dalston, Welling and Harrow, Watford and Gillingham are also set to be reopened next week.
Euro weakens in wake of court decision
The euro has slipped slightly in the wake of the German constitutional court’s ruling on whether the Bundesbank can participate in the the ECB’s QE scheme (see 10:33am update), falling about 0.6pc against the dollar.
Meanwhile, stock trimmed back their gains slightly and Italian and German government bonds faced some selling pressure. Market participants will no doubt be looking at the months ahead and wondering whether the substantial support offered by the ECB’s scheme is about to disappear.
US to borrow $3 trillion
The US is set to borrow a record $3 trillion this quarter to deal with the economic fallout of the coronavirus crisis.
My colleague Lizzy Burden reports:
The previous record for borrowing in a quarter was $569bn, set in 2008 during the financial crisis.
The US Treasury Department said the vast sum is needed to finance its unprecedented rescue package of direct payments and loans to support tens of millions of unemployed workers and businesses forced to close by lockdown measures.
It also needs to cover the shortfall in tax revenues because the government has postponed the deadline for tax payments this year from April to June.
The Congressional Budget Office estimates that the government will run a record deficit of $3.7 trillion this year, exceeding the $1 trillion-plus annual deficits of 2009 to 2012.
- Read more: US to borrow record $3 trillion
ECB given three months to fix QE programme
Following a court decision in Germany today, the European Central Bank has been given a three-month ultimatum to fix flaws in its quantitative easing programme.
The ruling temporarily resolves an argument between a German group of businesspeople and academics and the ECB over whether the central bank’s public sector purchase program (PSPP) – a government securities purchasing scheme launched in 2015 – is allowed under German law.
Bloomberg has the details:
In a 7-to-1 ruling, the judges said that the quantitative easing program isn’t backed by European Union treaties. That’s why German authorities acted unconstitutionally by not challenging the 2.7 trillion euro ($2.95 trillion) plan.
The ECB’s controversial asset-purchase program has been a concern for the German court since 2015, when the case was filed. In 2017, the judges asked the EU Court of Justice for an interim ruling aimed at limiting the ECB’s leeway, but the EU tribunal rejected the restrictive reading of the law suggested by their German counterparts...
...Germany’s participation is critical for the success of QE as the country’s own Bundesbank is the biggest buyer of debt under the program.
Markets have slipped slightly following the ruling. Nomura’s Jordan Rochester said the slight sell-off is due to fears the ruling could have negative implications for other elements of the ECB’s response “down the line”. He added the ruling: “will have set off a debate that most folks this morning were not expecting”.
CMC Markets’ David Madden added:
The ruling means the Bundesbank – the German central bank – can’t participate in the ECB’s stimulus scheme beyond three months, unless the ECB can come up with a new arrangement. Today’s news mean the ECB’s pandemic stimulus package could face legal challenges too.
Goldman Sachs: Covid shock will leave scars on UK economy
Goldman Sachs has warned the impact of a “deep” recession could cause long-term ‘scarring’ to the UK economy, hurting growth prospects even after a return to normal life.
The US investment bank’s analysts, led by Chief UK Economist Adrian Paul, predicted Britain’s economy will shrink about 11.5pc in the second quarter of the year (April, May and June).
They warned the shock of coronavirus and the current lockdown will leaves scars, including a surge in unemployment and company bankruptcies, that will slow the pace of any recovery.
But they said the Government’s response was likely to limit the damage caused, adding:
In many ways, the aggressive fiscal and monetary response unveiled by UK policymakers in March means that the scars left by the coronavirus crisis are likely to be less severe than any historical comparison would suggest. In our view, this unusual recession is likely to be shorter, sharper, and less costly than its predecessors analogous in scale.
Vue boss: Cinemas could open in July
UK cinemas could reopen as early as mid-July in time for the release of Christopher Nolan’s latest blockbuster Tenet, according to the boss of Vue Cinemas.
My colleague Simon Foy reports:
Tim Richards, the chief executive of Vue, said the company was working with the Government on ways to ensure social distancing, adding that he expected his theatres to be back in business for the release of the action thriller on July 17.
Mr Richards said cinemas needed to "demonstrate that we're not like sporting fixtures or music concerts" and can control the number of people entering.
He added that the firm was looking to use lessons from the Sars outbreak in Taiwan, where it has 20 screens, to manage a return to business in the UK.
- Read more: Cinemas could reopen in July, Vue boss says
How to read PMIs
No reason not to once again share part of our Economics Editor Russell Lynch’s helpful guide to what PMIs measure– and what they do not:
The PMI is a diffusion index, based on the responses of businesses to whether things like orders or employment have been increasing or decreasing over the month. As such it measures breadth rather than depth.
As the Office for National Statistics pointed out in a comparison of PMIs with the official data last autumn, “diffusion indices, unlike official estimates, do not account for the magnitude of changes in output in individual respondents”.
For example, if two small businesses had seen rising output but one firm had seen a big fall - leading to an overall decline in output – that might not show up in a PMI.
“Even when diffusion indices share the same base data as official estimates of output, the two indicators can give very different conclusions about economic performance,” said the ONS.
‘Unnerving’ scale of slowdown
Duncan Brock, group director at the Chartered Institute of Procurement & Supply, which helps IHS Markit gather data, said:
The services sector reached a stasis in April as the engine of business was put to sleep and the flow of new customers was cut off amidst public health concerns.
The PMI graphs visibly show cataclysmically low levels of domestic and export new orders, along with outstanding business as companies simply shut up shop. Firms also resorted to quick redundancies to avoid bankruptcy or made use of the furlough scheme to suspend operations as job creation halted apart from some online operations or digitally-focused activity.
Though a further downturn was anticipated after last month’s historically low figures, the scale of this fall is unnerving. A significant number of businesses in shutdown now may never reopen. Even with some movement in the lifting of restrictions on business activity, the UK economy is not a tap that can just be turned on. The flow of activity will take planning, Government support and an end to the pandemic in sight to have a strong effect on the biggest driver in the UK economy.
UK PMIs: Key points and analysis
Obviously, much of today’s release was already known, thanks to the preliminary ‘flash’ readings that are issued in advance of the final data. But it’s still worth highlighting just how dire the findings are:
- Around 79pc of survey respondents reported a drop in business activity during April, which was almost double the survey-record set in March (43pc)
- Close to one-in-seven survey respondents (14pc) commented on unchanged business activity since March
- Latest data signalled survey-record declines in new work, backlogs and employment across the service economy
- Adding to downward pressure on sales volumes, new business from abroad slumped
- Business expectations for the next 12 months picked up very slightly from March’s record low
- Around half of the survey panel (49pc) indicated a decline in payroll numbers during April
On that final point, IHS Markit added:
There were widespread reports that linked lower employment to the use of the UK government job retention scheme. However, service providers also commented on redundancies at their businesses amid severe cash flow constraints, which could lead to additional job cuts among those currently placed on furlough if support was not extended through the coming months.
IHS Markit’s Tim Moore said the composite reading (a weighted combination of the services and manufacturing gauges) points to the UK economy shrinking at a quarterly rate of 7pc. He added:
April's PMI data highlights that the downturn in the UK economy during the second quarter of 2020 will be far deeper and more widespread than anything seen in living memory.
Services activity worst on record
The numbers are in – the UK’s services sector suffered its worst drop in activity on record, but the numbers were ever so slightly better than the ‘flash’ reading indicated.
- Services came in at 13.4
- The composite gauge of services and manufacturing came in at 13.8
As a reminder, a score below 50 indicates a contraction in activity. The final manufacturing reading for April can be seen in my previous post.
IHS Markit, which gathered the data, said:
April data indicated a reduction in UK service sector activity on an unprecedented scale since the start of the survey in July 1996, reflecting emergency public health measures to stem the coronavirus disease 2019 (COVID-19) pandemic.
Coming up: Final UK services PMI
In a minute, we’ll get the final April PMI reading for the UK’s services sector. As a reminder, here’s how the initial ‘flash’ readings came in:
The final reading for manufacturing, with came out last week, was even worse than the flash
A similar drop might well occur today.
Full car registrations data:
The full, horrible data from the SMMY’s latest report into UK car registrations is out. Here are the numbers in full, showing a stunning drop in sales as the market remained in near-total lockdown:
The SMMT has downgraded its market forecast for 2020 to just 1.68m registrations, putting the sector on course for its worst performance since 1992.
Mike Hawes, the SMMT’s chief executive, said:
With the UK’s showrooms closed for the whole of April, the market’s worst performance in living memory is hardly surprising. These figures, however, still make for exceptionally grim reading, not least for the hundreds of thousands of people whose livelihoods depend on the sector.
A strong new car market supports a healthy economy and as Britain starts to plan for recovery, we need car retail to be in the vanguard. Safely restarting this most critical sector and revitalising what will, inevitably, be subdued demand will be key to unlocking manufacturing and accelerating the UK’s economic regeneration.
Remarkably, continued deliveries of the Tesla Model 3 meant it was the best-selling car of the month: despite only 658 units being registered.
John Laing completes sale of New Zealand prison stake
Infrastructure developer John Laing Group says it has completed the sale of its 30pc stake in Auckland South Corrections Facility, a 960-place prison in New Zealand.
Luciana Germinario, the FTSE 250 group’s chief financial officer, said:
Following recent disposals in the US and France, we are pleased to have made further progress with our divestment programme.
PaddyPower owner completes merger
Flutter Entertainment, the owner of bookmaker PaddyPower, says its £10bn merger with Sky Bet owner Stars Group has been completed, forming the world’s biggest online gambling company.
Share dealing in the group is taking place under Flutter’s regular ticker.
The merger was cleared by Britain’s competition watchdog at the end of March. The Competition & markets Authority said the tie-up would not have an overly adverse impact on competition within the sector.
Royal Bank of Canada’s Julian Easthope said:
The successful acquisition of The Stars Group positions Flutter as the most resilient of the gambling operators, with the most promising prospects for growth.
Wizz Air passenger numbers tank
Echoing Ryanair’s update, passenger numbers at budget airline Wizz Air have also gone off a cliff – down 97.6pc compared to April last year.
The number of people flying with the Central- and Eastern-Europe-focused carrier dropped from 3.3m to 78,389. It rolling annual figures rose 5pc to 36.8m.
The group said it operations at London Luton and in Vienna resumed at the start of May, with flights to “selected destinations” taking place.
Spanish jobless claims jump
Unemployment in Spain surged by 282.9k, or 7.97pc, in April to hit a total of 3.82m, according to data from the Spanish Labour Ministry.
The jump, which was seasonally adjusted, was slightly lower than in March. The overall figures for unemployment are not adjusted.
Workers aged under 25 were hit hardest, with the number out of work rising but almost 11pc. The impact of job losses was most keenly felt by those in the industry and services sectors, with men hit harder than women.
Ryanair traffic falls 99.6pc
April traffic at Ryanair plummeted 99.6pc as Covid-19 devastated demand for air travel.
Just 40,000 passengers used the carrier during the month, compared to 1.35m across the whole group in April last year.
It rolling annual passenger figures slipped 6pc, to 135.1m.
Ryanair said it operated 600 scheduled flights during the month, having budgeted for 75,501. The lights it conducted included “a number of rescue and medical flights” on behalf of various EU governments. 99pc of the flights arrived on time.
The group said it expects to carry “minimal” traffic during May and June as lockdowns continue.
Car registrations hit lowest level since 1946
Demand for new cars fell by around 97pc last month during the coronavirus lockdown, to the lowest level in nearly 75 years.
Around 4,000 new cars were registered in April compared with 161,000 in the same month in 2019, according to preliminary figures released by the Society of Motor Manufacturers and Traders (SMMT).
This was the lowest level of any month since February 1946, when just 4,044 new cars were sold in Britain in the midst of postwar rationing and hardship.
Many car showrooms across the country have been closed, but some deliveries of new vehicles are still taking place.
The SMMT is forecasting that around 1.68 million new cars will be registered during the whole of 2020, which would represent a 27pc decline on last year.
- Read more: Car sales tumble to lowest level since 1946
Agenda: Stocks set to rise
Good morning. European stocks are set to rise as more economies begin to relax lockdown restrictions.
On Monday, California said it will start to loosen restrictions from Friday, Italy and Spain started to roll back some measures, and Hong Kong’s leader said the city may relax virus restrictions “soon”.
5 things to start your day
1) 110,000 desperate small firms seek coronavirus Bounce Back loans: Barclays said it had 200 applications in the first minute under the scheme that offers small firms loans of up to £50,000
2) Britain’s manufacturing heartlands in the Midlands have been hardest hit by the coronavirus lockdown, according to new research which threatens Boris Johnson's bid to “level up” the regions and will pile pressure on ministers to spell out plans for a return to work.
3) BT under threat from £24bn O2-Virgin Media mega-merger: Telefonica, the Spanish owner of O2, confirmed it is in talks to combine the mobile operator with Virgin Media, the cable operator controlled by the Colorado-based “Cable Cowboy” John Malone, via his holding company Liberty Global.
4) Trump threatens new front on US-China trade war: The US President said he would cancel the agreement struck after lengthy negotiations if China failed to buy an additional $200bn (£161bn) of American goods and services over the next two years as tensions rise about the origins of the coronavirus outbreak.
5) British Airways bosses have been attacked by MPs after they refused to attend a grilling about shock plans to sack up to 12,000 of the company's staff. Willie Walsh, chief executive of BA's parent firm IAG, told the Transport Select Committee that he could not make it to a hearing on Wednesday because of a board meeting.
What happened overnight
S&P 500 futures climbed after the index staged a turnaround late Monday to end firmer as California sounded a note of optimism in its fight against the virus.
Stocks outperformed in Australia and Hong Kong was up even after a record drop in GDP. Markets were closed in Japan, China and South Korea. The Aussie held gains after the Reserve Bank of Australia left policy settings unchanged.
Global stocks remain on shaky ground as US-China discord flared again. Investors are weighing fears of a second wave of infections and a steady stream of bad economic data against efforts by many countries to start easing lockdown restrictions.
Coming up today
No FTSE 350 companies are due to report
Economics: New car registrations, services and composite PMI final (UK); ISM non-manufacturing (US)