(Bloomberg) — Europe’s two largest economies reported more evidence of the economic damage wrought by the pandemic. Unemployment in Germany surged in June, accompanied by warnings of a slower-than-expected recovery. In the U.K., house prices posted their first annual decline since 2012, while the nation’s businesses reported a record slump in sales.
Airbus SE set out plans to cut 15,000 civil-aerospace jobs worldwide, yet warned that its biggest ever restructuring plan does not cover a worst case scenario.
Confirmed coronavirus infections in the U.S. increased by 48,096 to 2.61 million on Tuesday, a rise of 1.9% that was above the 7-day average.
Key Developments:
Global Tracker: Global cases near 10.5 million; Deaths pass 511,000Europe’s ban on U.S. travelers means an ongoing tourism slumpPrimark owners face new test after sales fell to zeroHalf of all Mexico Covid tests are positive, highest in the worldHere’s how the pandemic shook emerging marketsHow do people catch Covid-19? What experts say: QuickTake
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EU Members ‘Far Apart’ on Recovery, Budget Talks (7:29 a.m. NY)
European Union member states remain “far apart” in talks on a coronavirus recovery fund and the bloc’s next budget, German Chancellor Angela Merkel said on the first day of Germany’s six-month EU presidency.
The warning came amid efforts to bridge differences ahead of a July 17 summit meeting at which the 27-member bloc will seek to advance plans for a 750-billion-euro ($840 billion) rescue package.
Read more: With Merkel in Charge, Europe Faces a Crisis on Many Fronts
Germany Has Enough Supplies of Remdesivir (6:32 a.m. NY)
Germany’s has secured sufficient supplies of remdesivir, a spokesman for Health Minister Jens Spahn told local media, and expects EU approval for the Covid-19 treatment to be finalized later this week.
The Guardian reported on Tuesday that the U.S. has bought three months’ worth of global supplies of Gilead’s drug.
Airbus Job Cut Plan Based on Rebound by Summer 2021 (6:24 a.m. NY)
Airbus SE Chief Executive Officer Guillaume Faury warned that a plan for 15,000 job cuts is “not the worst case” scenario facing the company in the battle to steer through the Covid-19 aviation crisis.
The move to eliminate 11% of global headcount is based on the projection that air traffic picks up significantly by the end of 2020 and long-haul traffic rebounds by summer 2021, Faury said. If that doesn’t happen as predicted, the manufacturer will have to revisit its plans, Faury said in a phone interview.
Infections at ‘Worrying’ Level in Austria (5:10 p.m. HK)
New coronavirus infections in Austria have become “worrying,” with 107 people testing positive in the last 24 hours, Health Minister Rudolf Anschober told journalists in Vienna. That’s the biggest one-day increase since April 17.
The biggest addition is attributable to a cluster around a Pentecostal evangelical church in Linz, an industrial town two hours west of Vienna, Anschober said. The province of Upper Austria is taking “rigorous” measures, he said, without elaborating.
German Unemployment Rose Sharply in June (4:49 pm. HK)
Another sharp rise in unemployment figures in June took the number of job losses in Germany in the second quarter to 678,000, and the national total to just below 3 million. That’s a threshold not broken since 2011. Yet more redundancies were prevented by generous state wage support, the Federal Labor Agency said Wednesday.
The Ifo institute, which five weeks ago predicted an economic rebound of more than 10% next year, sharply lowered its projections to growth of 6.4%.
U.K. Data Reveal Challenge of Recovery (4.39 p.m. HK)
House prices in the U.K. posted their first annual decline since 2012, dropping 0.1% from a year earlier to an average of 216,403 pounds ($267,000), according to Nationwide Building Society.
Separately, measures of sales, orders and cashflow in the nation’s dominant services sector have plunged by the most in the 31-year history of the British Chambers of Commerce’s quarterly survey. Sentiment in manufacturing industry slid to the weakest level since the financial crisis.
While Bank of England Chief Economist Andy Haldane said Tuesday the recovery may be stronger than predicted, others are less optimistic, with the majority of the 7,706 companies surveyed by the BCC saying they expect turnover to worsen over the next year.
Pizza Hut, Wendy’s Operator Seeks U.S. Bankruptcy (3:03 p.m. HK)
NPC International Inc., the largest franchisee of Pizza Hut restaurants in the U.S., filed for bankruptcy after coronavirus-related shutdowns added to competitive pressures in the restaurant industry.
The closely held company sought Chapter 11 protection in the Southern District of Texas court on Wednesday. NPC opened its first Pizza Hut restaurant in 1962 and operates more than 1,225 Pizza Hut and over 385 Wendy’s stores, according to its website.
U.K. House Prices Decline as Lockdown Restrains Activity (2:32 p.m. HK)
U.K. house prices posted the first annual decline since 2012 as the coronavirus lockdown limited viewings, increased financial uncertainty and made lenders less willing to take on risk. Values dropped 0.1% in June from a year earlier to an average of 216,403 pounds ($267,000), Nationwide Building Society said Wednesday.
Tokyo Finds 67 New Cases of Coronavirus, NHK Says (1:35 p.m. HK)
Tokyo confirmed 67 cases of coronavirus Wednesday, the highest since the state of emergency order was lifted, NHK reports, citing an unidentified metropolitan government official.
The Japanese government is considering starting talks with China, South Korea and Taiwan as soon as this month to ease travel restrictions imposed to prevent the spread of coronavirus, Asahi reported earlier on Wednesday, citing unidentified government officials.
German Cases Steady, Infection Rate Stays Below Key Threshold (1:17 p.m. HK)
Germany’s coronavirus infection rate remained below the key threshold of 1.0 for a seventh day, and the number of new cases held far below the level at the height of the outbreak.
The reproduction factor — or R value — edged up to 0.83 on Tuesday, from 0.74 the previous day, according to the latest estimate by the country’s health body, the Robert Koch Institute. There were 376 new cases in the 24 hours through Wednesday morning, up from 349 the previous day, according to data from Johns Hopkins University.
Airbus Begins Biggest Restructuring With 15,000 Jobs to Go (11:03 a.m. HK)
Airbus SE embarked on the most extensive restructuring in its history, setting out plans to cut 15,000 civil-aerospace jobs worldwide as it attempts to steer through the crisis brought on by the coronavirus pandemic.
The European manufacturer will eliminate more than 10,000 positions across its main bases in Germany and France, part of an 11% reduction in global headcount, according to a statement on Tuesday. Chief Executive Officer Guillaume Faury has said the company’s output will be 40% lower than expected for two years due to a dramatic slump in demand for aircraft, and has previously warned it is bleeding cash.
Singapore PM Says Country Has Controlled Spread (10:49 a.m. HK)
Singapore has controlled the spread of the coronavirus and kept fatality rates low, the country’s Prime Minister Lee Hsien Loong says in a letter posted to his Facebook page.
Singapore is still recording more than 200 new cases of the coronavirus a day, with its overall tally at 43,907 infections, the second-highest in Southeast Asia. The country was criticized for not tackling an outbreak among migrant workers quickly enough, which saw authorities impose a stricter lockdown in place of a more open original strategy.
IMF Sees Asia’s Pain Persisting (9:58 a.m. HK)
Asia’s loss of economic output due to the deadly coronavirus will likely persist until 2022, according to the International Monetary Fund. The assessment is a warning about the prospects for a global recovery after the pandemic tipped the world economy into its worst collapse since the Great Depression. The Asia region contributed about 68% of global growth in 2019, according to the IMF.
While regional growth is tipped to rebound to 6.6% next year, that won’t be enough to replace all of the output lost due to the crisis.
Google Delays Plan to Reopen U.S. Offices (9:51 a.m. HK)
Google is pushing back a plan to reopen its U.S. offices after coronavirus cases surged in several western and southern states. All U.S. offices will remain closed until Sept. 7 at the earliest, according to a memo sent to employees. In May, Chief Executive Officer Sundar Pichai said the company would cautiously move some workers back in starting July 6.
South Korea Reports 51 New Cases, Starts to Use Remdesivir (9:18 a.m. HK)
South Korea confirmed 51 more cases Wednesday, bringing the total number of cases in the country to 12,850. The South Korean government will start supply of remdesivir to local hospitals on July 1 after signing an import contract with Gilead Sciences Korea, the nation’s Centers for Disease Control & Prevention said in an emailed statement. The use of the drug will be limited to patients in serious conditions, it added.
Singapore, Australia Home Prices Fall (9:04 a.m. HK)
Singapore home prices fell for a second consecutive quarter after a two-month lockdown shut most of the economy and put the brakes on the real-estate market. Property values declined 1.1% in the three months ended June 30, according to a preliminary estimate from the Urban Redevelopment Authority released Wednesday. In the first quarter, prices dropped 1%.
Australian house prices fell for a second straight month in June, as the coronavirus shutdowns continue to weigh on the property market. Home values in major cities fell 0.8% last month, accelerating from a 0.5% decline in May, according to CoreLogic Inc. data released Wednesday. The slide was led by Melbourne and Perth, where prices dropped 1.1%. In Sydney, prices fell 0.8%.
Australian State Shuts Border to Virus Hotspot Residents (8:56 a.m. HK)
New South Wales, Australia’s most-populous state, said residents of 10 virus hotspots in neighboring Victoria would face six months in jail or a fine of A$11,000 if they attempt to cross the border.
Ten areas of Melbourne will go into lockdown shortly before midnight as authorities attempt to crush a spike in coronavirus infections. Victoria sate has experienced two weeks of double-digit increases in new Covid-19 cases after social distancing restrictions were eased.
Mexico Cases Jump; Aeromexico Files for Chapter 11 (8:19 a.m. HK)
Mexico reported 5,432 new confirmed Covid-19 cases, bringing the total 226,089, according to data released by the Health Ministry. Deaths rose 648 to 27,769.
Grupo Aeromexico SAB, Mexico’s second-largest airline, said it filed for bankruptcy in the U.S., becoming the latest in a string of Latin American carriers to seek court protection after the Covid-19 pandemic caused a severe downturn in travel. The carrier will continue operating, it said in a statement to the Mexican stock exchange.
U.K. Firms See Record Sales Slump (7:01 a.m. HK)
Hopes of a swift recovery for the U.K. economy could be dashed, according to a survey that revealed the parlous state of Britain’s businesses.
Measures of sales, orders and cashflow in the nation’s dominant services sector have plunged by the most in the 31-year history of the British Chambers of Commerce’s quarterly survey. Demand for goods from manufacturers also dropped in the three months through June, with sentiment in the industry sliding to the weakest level since the financial crisis.
The findings add weight to concerns the economy will struggle to rebound quickly from the pandemic.
Trump Says He’s ‘More and More Angry at China’ Over Pandemic (6:56 a.m. HK)
“As I watch the Pandemic spread its ugly face all across the world, including the tremendous damage it has done to the USA, I become more and more angry at China,” President Trump says in Twitter post.
“People can see it, and I can feel it!”, Trump says.
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