Treasurer Josh Frydenberg warned GDP is expected to shrink more than 10 percent in the three months to June – wiping £26 billion of the country’s economy. This would be the biggest quarterly fall since records began. Unemployment is also expected to double to 1.4 million people, with a third of jobs lost in accommodation and food services, and a quarter lost in arts and recreation. Air travel has also plummeted by a massive 97 percent.
It is the latest hammer blow to the Australian economy, with the country’s stock market losing a third of its value in just four weeks.
Asian shares also tumbled on Tuesday amid growing fears about a second wave of coronavirus infections after the Chinese city where the pandemic originated reported its first new cases since its lockdown was lifted.
European markets were set to open lower with EUROSTOXX 50 futures STXEc1 off 0.52 percent and FTSE futures FFIc1 down 0.22 percent.
E-Mini futures ESc1 for the S&P 500 slipped 0.68% The central Chinese city of Wuhan reported five new cases on Monday, casting doubts over efforts to lower coronavirus-related restrictions across the country as businesses restart and individuals went back to work.
FOLLOW EXPRESS.CO.UK FOR LIVE UPDATES:
7.55am update: Toyota warns operating profit could collapse 80 percent in next financial year
The world’s second largest car maker has warned of an 80 per cent collapse in operating profits over the next 12 months, but is expecting sales in the US and Europe to fully recover by early 2021.
For the financial year until the end of March 2021, Toyota is forecasting an operating profit of ¥500bn compared to a profit of ¥2.4tn from a year earlier.
According to S&P Global Market Intelligence, this is well below analyst expectations for a profit of ¥1.8tn.
The company also expected global vehicle sales to fall to 8.9 million from 10.5 million.
Fourth quarter plunged 27 percent in the January to March quarter, as the firm struggled with supply chain disruptions from the coronavirus crisis, the shutdown of car plants around the world and falling consumer demand.
Toyota’s chief financial officer Kenta Kon said: “We are seeing the seeds of recovery as plant capacity in the US and Europe begin to recover.
“But the situation still does not allow us to have a clear outlook for a definite recovery.”
7.40am update: Australia GDP set to plummet by 10 percent with £26bn wipe-out
Australia is bracing for its biggest fall in GDP on record as the coronavirus lockdown continues to blow a huge hole in the country’s economy.
Treasurer Josh Frydenberg warned GDP is expected to shrink more than 10 percent in the three months to June – wiping £26 billion of the country’s economy.
Unemployment is also expected to double to 1.4 million people, with a third of jobs lost in accommodation and food services, and a quarter lost in arts and recreation.
Australia’s stock market has now lost a third of its value in the past month.
7am update: China factory prices plummet at fastest level in four years
The prices of good exiting factories in China have fallen at their fastest rate since April 2016, as the country’s producers continue to come under pressure from the coronavirus pandemic.
The National Bureau of Statistics said China’s producer index fell 3.1 percent year-on-year last month, compared to a 1.5 percent drop the month before.
The bureau said Chinese producers’ prices had been hit by the current pandemic and a fall in the international commodities markets.
China’s consumer price index, which is a measure of the prices of food, everyday goods and services, increased 3.3 percent – lower than the increases seen during the peak of the coronavirus outbreak in China.
In January, the CPI hit an eight-year high of 5.4 percent year-on-year, while the February and March increases were 5.2 and 4.3 per cent respectively.
6.19am update: Oil prices boosted by Saudi Arabia pledge to deepen output cut
Oil futures rose on Tuesday, boosted by an unexpected commitment from Saudi Arabia to deepen production cuts in June in a bid to help drain the glut in the global market that has built up as the coronavirus pandemic crushed fuel demand.
Brent crude LCOc1 futures advanced 0.5 percent, or 15 cents, to $29.78 at 0500 GMT, after hitting an intraday high of $30.11 a barrel.
US West Texas Intermediate (WTI) crude CLc1 futures were up 1 percent, or 26 cents, at $24.40 after touching an intraday high of $24.77.
Saudi Arabia said overnight it would cut production by a further 1 million barrels per day (bpd) in June, slashing its total production to 7.5 million bpd, down nearly 40 percent from April.
Published at Tue, 12 May 2020 05:09:00 +0000