AstraZeneca deal boosts potential Covid-19 vaccine supply to 2bn doses – as it happened

Kalyeena Makortoff and Jasper Jolly

from on 2020-06-04 17:18 (#549SC)

Rolling coverage of business, economics and markets as pharma giant AstraZeneca strikes a deal for its potential Covid-19 vaccine

6.18pm BST

5.34pm BST

A final question from Bloomberg, on whether AstraZeneca is looking at further partnerships to help manufacture even more than 2 billion doses.

AstraZeneca's boss says they will continue looking at this over the next two months, but says it would make sense for society to bet on two to three different other solutions not just our vaccine.'

5.27pm BST

This is what a healthy, successful pharma industry can deliver, Soriot says. It means companies are able to step up and come to help.

5.20pm BST

We're funding this manufacturing at considerable risk, given that trials are still ongoing, Hatchett says.

He stresses there is a possibility that the vaccine may not work.

5.17pm BST

Pascal Soriot, chief executive of AstraZeneca, says he expects to know whether the vaccine works by August.

He says there are two timelines, one linked to manufacturing and one around trials.

5.12pm BST

We are anticipating some bottlenecks, Hatchett admits.

Vials, for example, are in short supply.

5.08pm BST

AstraZeneca's boss hedges his excitement over the vaccine.

We will give it our best shot and we hope it will work' he said.

5.07pm BST

AstraZeneca's chief executive says part of the 1 billion doses to be produced by the Serum Institute will be used in India.

The remainder will be put forward for international allocation in a fair manner.

5.05pm BST

Hatchett says health care workers will likely be among the first to receive potential doses of the vaccine.

Vulnerable people are also likely to be the first vaccinated, particularly those who are at most at risk of severe impacts from the disease. That includes the elderly and people with medical conditions, including hypertension or diabetes.

4.58pm BST

We've now moved onto the Q&A portion of the press conference with AstraZeneca.

4.56pm BST

Richard Hatchett, chief executive of the Coalition for Epidemic Preparedness Innovations (CEPI) is speaking now.

He says the aim is to make sure the firms can get as much vaccine, as possible as quickly as possible, to people who need it globally.

4.53pm BST

Pascal Soriot, chief executive of AstraZeneca, is holding a press conference on the deal.

He says the company is moving as fast as it can on developing the potential vaccine

4.50pm BST

Britain's AstraZeneca said on Thursday it would now be able to supply more than two billion doses of its potential coronavirus vaccine, thanks to a string of manufacturing deals including one with CEPI, Reuters reports.

The company said it reached an agreement worth $750 million with the Coalition for Epidemic Preparedness Innovations (CEPI) and Gavi to produce 300 million doses of the shot, AZD1222, and another with the Serum Institute of India to supply one billion doses for low and middle-income countries.

4.35pm BST

European stock markets have ended the day in the red, according to provisional data at the close:

4.30pm BST

Campaign group Positive Money has accused the Bank of England and Treasury of propping up climate criminals and bad bosses with public money," through the CCFF.

The group takes issue with the 1.8bn provided to airlines with no conditions attached." They point out that EasyJet recently is planning to cut 30% of its workforce and that BA is pressing ahead with up to 12,000 job cuts, despite receiving state support.

We really need to ask ourselves whether we should be propping up climate criminals and bad bosses with public money. The government must consider whether conditions which would stop firms laying off workers, avoiding tax, and fuelling the climate crisis, should be applied to these bailouts.

We can't repeat the mistakes of 2008, where the banks got bailed out with no strings attached and the public got sold out. We need to use every opportunity to ensure the recovery from this crisis builds a fairer and greener society.

4.05pm BST

More on Tottenham tapping state-backed loans, from the Guardian's David Hytner.

Tottenham have borrowed 175m from the Bank of England to help them through the next year or so, as they respond to the financial destruction of the Covid-19 crisis.

We have always run this club on a self-sustaining commercial basis. I said as early as 18 March that, in all my 20 years at the club, there have been many hurdles along the way but none of this magnitude - the Covid-19 pandemic has shown itself to be the most serious of them all.

3.44pm BST

The Bank of England has just published its list of the large companies who have borrowed money under its Covid corporate finance facility (CCFF). There are a lot of household names included, with football club Tottenham Hotspur among the more eye-catching.

3.11pm BST

Intercontinental Hotels Group (IHG) has confirmed it has begun consultations over redundancies at the 19 hotels in England, Scotland and Wales which it directly manages or leases.

This is a very difficult time for our industry, and we have done everything to protect and retain jobs for as long as possible. Most of our hotels in the UK are currently closed and while we are looking forward to welcoming guests back when we can reopen, it will take time for travel and tourism to return to pre-coronavirus levels.

2.35pm BST

The US jobless numbers have weighted down Wall Street, with markets slumping at the open.

The S&P 500 lost 0.46%, the Dow Jones industrial average lost 0.33%, and the Nasdaq lost 0.33%.

2.34pm BST

You may have missed it during the flurry of news from the ECB, but there was more poor data from the US.

Another 1.9m Americans claimed jobless benefits during the week of 30 May, taking the total number to an astonishing 42.6m.

More than 42 million Americans have filed jobless claims since mid-March. https://t.co/rXtM7R9jXZ pic.twitter.com/tAm8lEYlcq

Initial jobless claims fell to 1,877,000 in the week ending May 30th, from 2,126,000, but the pace of decline has begun to stall a little, with claims still at an otherwise unprecedented level.

2.31pm BST

The European commission's proposal for a pandemic recovery fund should not be seen in isolation, Lagarde says.

She does not doubt the determination of European leaders at large to respond to the pandemic, she says.

2.22pm BST

Inflation was clearly in the birth certificate" of PEPP, Lagarde says - after a question on whether it was added as a post-hoc justification of the policy.

The purchases were front-loaded as part of its short-term response to the crisis, Lagarde highlights.

Lagarde admitting that PEPP has been front-loaded maybe also a sign that we shouldn't extrapolate in a linear fashion to when it will "run out".

2.16pm BST

Asset purchases are needed in all eurozone jurisdictions to support monetary policy, Lagarde says in answer to a question on why German debt was relatively highly represented in recent purchases.

On deflation, Lagarde says the ECB has discussed disinflation" (which is not quite the same thing), and that is why they have used the most efficient, effective and flexible" of the tools at her disposal.

2.08pm BST

Lagarde is very firm in expressing confidence that the asset purchase programme is legal, after another question about the German constitutional court ruling.

Asked again about #Karlsruhe ruling, @Lagarde carefully repeats main points:
1) ECB subject to European Court of Justice jurisdiction
2) ruling directed at German govt & parliament and not the ECB itself
3) confident of a resolution that doesn't compromise bank's independence

2.03pm BST

There is broad agreement that the stimulus is perfectly adequate, Lagarde says.

LAGARDE SAYS BROAD CONSENSUS OVER 600 BLN INCREASE IN PEPP

Sounds like the ECB will do more not less easing going forward - overall monetary easing not done yet $EUR

This is absolutely key from @lagarde: ECB staff projection for 2022 headline inflation were revised lower, from 1.5% to 1.3%, despite massive stimulus in the pipeline.

This is the lowest medium-term inflation projection ever (same as in Dec-14 before QE). pic.twitter.com/UcIfLSh0FD

2.00pm BST

Lagarde says the pandemic stimulus has demonstrated that it is a very successful programme.

It has prevented a downward spiral" in growth and inflation, Lagarde says.

1.53pm BST

Asked whether the ECB has considered junk bonds (those that are not rated as investment-grade), Christine Lagarde said the central bank will continue to observe the situation, but that the monetary policymakers had not discussed it further than that.

On the German constitutional court's ruling against its asset purchases, Lagarde said: We have indeed taken note of the judgement... and we are confident that a good solution will be found."

1.49pm BST

Lagarde says the ECB strong welcomes" the European commission's proposals for a fiscal stimulus through a recovery fund.

And now we are into the Q&A.

1.45pm BST

Inflation will decline over the coming months, remaining subdued through to the end of the year, Lagarde says.

Lower demand will suppress inflation, and it will only be partially counterbalanced by higher prices from supply constraints, she says.

1.43pm BST

Back on Christine Lagarde, the ECB will do everything necessary" to support the eurozone economy, she says.

There has been some bottoming out of the downturn in May, but growth will start to rebound in the third quarter as lockdown restrictions ease, she says.

1.39pm BST

Breaking off briefly from the ECB, another 1.88m Americans made jobless claims during the week of 30 May.

That was above the 1.8m expected by economists on average.

1.34pm BST

European Central Bank president Christine Lagarde says the eurozone is experiencing an unprecedented slump.

The pandemic has created an unprecented contraction, Lagarde says.

1.31pm BST

You can watch Christine Lagarde speak here:

1.27pm BST

More investors react:

Neil Williams, senior economic adviser to the international business of Federated Hermes, said:

The ECB is turning up its monetary hose. Extending and ramping-up its asset purchases by 600bn means it can continue running QE in 2021 at over 100bn per month. This is way up on the 20bn run-rate pre-virus, and even the 80bn during its own, 2015 euro-crisis. Hopefully, with flexibility pledged on issuers' buying limits, there won't be too much push-back from the Governing Council and Germany's Constitutional Court.

After lagging the US and UK, the fiscal box is now opening. Further budget amendments in Germany, France, and Italy suggest they'll have to stomach' 2020 deficits closer to the European Commission's projected 7.0%, 9.9%, and 11.1% of GDP. Most telling of all are efforts to push through the 750bn Recovery Fund', targeting grants and loans toward most affected euro members.

This response shows the scale of the challenge facing the ECB to get the economy through this recession and to get inflation back up to 2%.
There were no adjustments to the composition of its Corporate Bond Purchase Programme, or changes to the tiering multiple applied to bank deposits. But in the Q&A, expect Lagarde to be extremely dovish, to focus on the downside risks to the outlook and to stress that all options in terms of future policy moves remain very much open.

While it is no surprise to see interest rates left untouched, we were expecting less of an increase in the pandemic bond buying programme given economies across Europe are beginning to reopen and the worst of the crisis appears to be in the rear-view mirror. Needless to say this should be another positive for risk assets, at a time when equities in particular have already rallied strongly from their lows in March.

Investors will be watching Europe with interest going forward as valuations remain on the cheaper side compared to other regions and remains under-owned by international investors. If Christine Lagarde continues to placate big businesses' borrowing costs like this, we should see a positive return environment for investors as the economy gets going again.

1.24pm BST

What a (actually relatively small) difference 600bn makes: the before and after pictures show European stock markets pushing into the green.

1.20pm BST

Former ECB vice-president Vitor Constancio appears to approve of the central bank's move, describing it as ahead of the curve".

The ECB, ahead of the curve", just increased QE emergency purchases, PEPP, by 600 bn to 1350 and prolonged it to at least Until June 2021 with reinvestment in full at least to the end of 2022. The other purchase programs continue. The euro is going up, periphery yields down.

1.16pm BST

Some early reactions from economists to the larger-than-expected stimulus.

Carsten Brzeski, chief economist at ING Germany, said:

An increase of the PEPP programme by 600bn euro and the reinvestment of the PEPP proceeds underlines the ECB's determination to do whatever it takes'. Today's decision should dent any future speculation about whether or not the ECB is willing to play its role as the lender of last resort for the Eurozone.

3 quick FYIs on ...

Policy: The @ECB confirmed that #CentralBanks remain in a "whatever it takes mode" through the expansion of its PPP

Data: US #Jobless claims out in less than 30 minutes (expectations below); and #Markets: No meaningful pullback from the recent strong rally pic.twitter.com/MLMI8aZt5s

Feels like ECB knew where the consensus was (500bn) & wanted to do a bit more to signal the extent of their easing bias. Interested now on the pace of purchases and how comfortable the ECB is with a stronger $EUR (whether there's a limit). Tone of presser will be less upbeat

1.15pm BST

Here is the move from the euro after the announcement, as traders appeared to welcome the support for the eurozone economy (even if looser monetary policy should theoretically dent the currency:

Just in: The ECB increases asset purchases by 600 billion and extends emergency program until June 2021 https://t.co/9YCZoDTeMa pic.twitter.com/uIjzhCfne0

Italian bonds love ECB's bond buying boost: #Italy's 10y yields in free fall after ECB has increased the PEPP envelope by 600bn, until at least June 2021 and for reinvestments until at least end-2022. pic.twitter.com/VDZyxztdJO

1.05pm BST

The positive surprise from the ECB has boosted assets across Europe.

European stock markets have turned positive after the ECB surprised investors. The Euro Stoxx 600 index, which tracks big companies across the region, has gained 0.1%. Bank shares have been boosted as well.

1.00pm BST

There are six points in the European Central Bank's announcement. Here is a summary:

12.54pm BST

The expansion of bond purchases means the total pandemic emergency purchase programme (PEPP) will be worth 1.35tn - a massive stimulus.

The ECB's governing council, which controls monetary policy, said:

In response to the pandemic-related downward revision to inflation over the projection horizon, the PEPP expansion will further ease the general monetary policy stance, supporting funding conditions in the real economy, especially for businesses and households. The purchases will continue to be conducted in a flexible manner over time, across asset classes and among jurisdictions. This allows the governing council to effectively stave off risks to the smooth transmission of monetary policy.

12.47pm BST

The European Central Bank has unveiled a new 600bn bond buying programme, in a larger expansion of stimulus measures than many investors had expected.

Purchases will continue until the end of June 2021, the ECB said in a statement.

12.40pm BST

A quick note before the ECB announcement: the UK's Office for Budget Responsibility has revised down the cost of the job retention scheme:

We have now included the latest changes to the furlough scheme and self-employed income support scheme in our policy database. These and other changes raise our estimate of the total cost of the Chancellor's coronavirus policy interventions slightly to 132.5 billion in 2020-21.

CJRS cost revised down 30% as usage suggests employers have concentrated furloughing among part-time and lower-paid jobs. Average pre-virus weekly pay looks to have been around 320 - much closer to median part-time than full-time earnings. Read more: https://t.co/x9blRq9Ui0 pic.twitter.com/LuxCsdNvJ8

12.18pm BST

A quick look at US stock market futures suggests that the negativity is going to spread across the Atlantic.

The S&P 500 and the Dow Jones industrial average both suggest stocks will fall by 0.4%, although the Nasdaq is set for a more comfortable time, declining by only 0.2%.

11.29am BST

The FTSE 100 has been the strongest performer of large European indices so far on Thursday morning, down by 0.3%.

Stock markets in France, Germany and Italy are down by between 0.8% and 1% as we await the European Central Bank's latest monetary policy decision at 12:45pm BST.

11.02am BST

The European Central Bank is widely expected to extend its huge quantitative easing programme as it tries to stimulate the economy.

We think today is the day in which the ECB needs to reinforce the perception of European authorities finally getting to grips with the scale of the Covid-19 hit with further QE action.

A failure to act today would imply consideration is being given to only running the program until September which would result in considerable anxiety amongst investorsthat would result in an immediatetightening of financial market conditions.

Despite the ECB only having spent a third of the 750bn [Pandemic Emergency Purchase Programme], anything less than a 500bn expansion will be a disappointment and could undo the recent weeks of market strength. Although equity markets seem to believe a V-shaped economic recovery is underway, the reality is that the euro area economy continues to struggle under the weight of the coronavirus crisis and the ECB cannot afford to delay additional stimulus.

It will be a very close call with the hawks potentially swaying a consensus-minded President Lagarde to defer the announcement, also to keep pressure on the politicians to deliver on the EU Commission's 750bn Next Generation EU Fund.

ECB President Lagarde will be happy that someone is doing fiscal stimulus (as the pandemic is a problem for fiscal policy, not central bank policy). Today's meeting should continue to emphasise the need for quantitative policy to support financial markets and ensure sufficient liquidity in the economy.

Close attention will also be paid to any hints that that last month's German Constitutional Court ruling will tie the ECB's hands in future, with the euro's longest winning streak in six years at risk. A defiant tone, dispelling those concerns, would serve Lagarde - and the euro - well.

10.27am BST

There is some interesting detail on the Bank of England's response to the pandemic on financial markets in a speech just published by Andrew Hauser, the executive director for markets at Threadneedle Street.

While a lot ofthe speech is backward-looking at the big moments of the crisis, Hauser said that further financial instability cannot be ruled out" as the pandemic's effects continue to be felt on markets. He said:

Financial markets could come under strain again, if there is another leg to the global infection cycle, or if economic data come out persistently worse than expected. And even if - as hoped - we escape that, the sheer scale of our interventions means we must, in time, ask ourselves hard questions about the financial markets we rely upon, and their potential to amplify the sort of dash for cash' we saw in March and April.

9.54am BST

There was also a rapid drop in new orders received by UK construction companies, which was almost exclusively attributed to the coronavirus disease 2019 (COVID-19) pandemic.

Residential builders did slightly better during May than civil engineers or office builders, but the reading for that segment was still only 30.9.

Around 64% of the survey panel reported a drop in construction activity during May, while only 21% signalled an expansion. Where growth was reported, this was mostly attributed to a limited return to work on site following shutdowns in April.

A gradual restart of work on site helped to alleviate the downturn in total UK construction output during May, but the latest survey highlighted that ongoing business closures and disruptions across the supply chain held back the extent of recovery.

It seems likely that construction activity will rebound in the near-term, as adaptations to social distancing measures become more widespread and the staggered return to work takes effect. However, latest PMI data pointed to another steep reduction in new orders received by UK construction companies, with the pace of decline exceeding the equivalent measures seen in the manufacturing and service sectors.

9.49am BST

The crisis hitting the UK construction industry eased slightly in May, but the sector still saw its third-worst month recorded by a closely followed survey.

The construction purchasing managers' index (PMI) rose from its record low of 8.2 in April to 28.9 in May, according to data firm IHS Markit.

Weakness in the UK Construction sector persisted in May, with #PMI Total Activity Index at 28.9 (up from 8.2 in April) amid steep falls in activity across all broad areas of construction. Read more: https://t.co/hKvD9B5JVT pic.twitter.com/VYDGcgbPpB

9.39am BST

Young's pub chain intends to open all of its 276 sites by the 3 August, and is hopeful the business can bounce back" once its pubs are allowed to reopen, but expects trading to be materially below average" for the rest of the year.

9.35am BST

Another interesting detail from the SMMT data: Tesla's Model 3 was the most popular car during May.

9.17am BST

The UK car market has halved compared to last year as the coronavirus crisis hits, with just over half a million registrations in the first five months compared with more than one million at this point last year.

UK new car registrations fell -89.0% in May to their lowest level for the month since 1952, according to figures published today by the Society of Motor Manufacturers and Traders (SMMT).

After a second month of shutdown and the inevitable yet devastating impact on the market, this week's re-opening of dealerships is a pivotal moment for the entire industry and the thousands of people whose jobs depend on it. Customers keen to trade up into the latest, cutting-edge new cars are now able to return to showrooms and early reports suggest there is good business given the circumstances, although it is far too early to tell how demand will pan out over the coming weeks and months.

Restarting this market is a crucial first step in driving the recovery of Britain's critical car manufacturers and supply chain, and to supporting the wider economy. Ensuring people have the confidence to invest in the latest vehicles will not only help them get on the move safely, but these new models will also help address some of the environmental challenges the UK faces in the long term.

8.56am BST

Just when you thought you were out, Brexit drags you back in - that seems to be the view of foreign exchange analysts on the future prospects for sterling, which is under pressure this morning.

The pound had hit a one-month high of $1.2615 against the US dollar on Wednesday, but fell by 0.5% on Thursday morning back to $1.2517.

Sterling will lose recent gains against the dollar and weaken further if Britain does not ask for an extension to its Brexit transition period by a June 30 deadline to allow more time for talks on a trade deal with the EU, a Reuters poll found. [...]

The fading prospect of an extension to the post-Brexit transition period, and the risk of supply chain disruption at the start of 2021, casts a cloud over (Britain's) GBP outlook," said James Smith at ING.

8.43am BST

Car dealer Lookers, which today announced plans for 1,500 job cuts, was in trouble well before the pandemic struck, with a fraud investigation and plans to close dealerships. The Covid-19 crisis has hurt it further.

8.28am BST

The FTSE 100 is on track for its first decline this week. It had been buoyed earlier in the week by optimism that the world economy will recover from the pandemic faster than previously thought.

However, the early selling pressure has eased somewhat, with stocks down by 0.2% on the blue-chip index.

8.06am BST

The FTSE 100 has lost 0.45% in early trade, mirroring downward moves on stock markets across Europe.

Germany's Dax lost 0.7% at the open, France's Cac 40 lost 0.6% and Spain's Ibex lost 0.9%.

8.00am BST

Good morning, and welcome to our live, rolling coverage of business, economics and financial markets.

Every aspect of the car industry has been hit hard by the pandemic, with showrooms lying idle for weeks (until Monday in England) and factories shutting their gates because of health fears and parts shortages. The latest updates show that the pain is only starting to be felt in the UK.

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