Line graph of average nominal yields on total government bonds (%) showing Italy appears to have lower borrowing costs

The coronavirus is rising again in Europe and the USA

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Latest news

US governors are trying hard to tackle big hikes across the country

More than 100 asymptomatic coronavirus cases have been detected in Xinjiang, one of the most heavily monitored and monitored regions in China. This is the largest cluster discovered in the country since July.

Rapid tests, contact tracing and quarantine have all managed to spark a second wave of coronavirus cases in China, with infections typically found at the asymptomatic stage.

The national daily caseload has been in the dozen since a previous major outbreak in Xinjiang, the predominantly Muslim region of western China that has been transformed into a security state with ubiquitous surveillance and heavy policing in recent years. The suppression of information flowing from overcrowded warehouses has raised concerns that the virus could easily spread.

The corona virus has now reappeared in Europe and the USA. In France, the government's chief doctor warned of a "critical situation", while Italy and Spain announced comprehensive measures on Sunday to tackle a leap into new cases. U.S. healthcare workers fear the rising case numbers could overwhelm hospitals as governors scrambled on Sunday to tackle the surge in new infections across the country.

As a sign of investor confidence in China's continued growth Ant group is expected to raise more than $ 34 billion after the stock price is fixed as part of its initial public offering. With that said, the payments group is well on its way to outperform Saudi Aramco as the largest public listing of all time.

Markets

The effects of increases in liquidity, debt and deficits on the markets will be nuanced, warns Mohamed El-Erian. Only certain sectors, companies and countries are supported. "Elsewhere, it may not be enough to avoid the bankruptcies and debt rescheduling that come with a global recovery that is too small, too uneven and too uncertain."

Wall Street tracked European exchanges significantly lower on concerns. A rising number of coronavirus infections will trigger a new wave of social restrictions that will put a damper on business. The US benchmark index S&P 500 fell 2 percent in morning trading on Monday. The Vix index, the so-called “fear indicator”, rose by more than 4 points to 31.6 points and was thus well above its long-term average of 20 points. This is a sign that investors are preparing for spurts of volatility in the coming month.

The boost achieved by the EU's borrowing related to Covid will help Italy extend the maturity of its national debt and protect it from a future rise in interest costs, Rome's debt chief said. Davide Iacovoni, who oversees a debt stack valued at more than EUR 2.4 billion, said glowing demand for the EU's first sale of Covid-linked debt last week, which brought record-breaking orders of $ 233 billion. EUR posted, supported Italy's bonds.

business

JUICEEurope's largest software company has slashed its revenue and earnings forecast for the year as the resurgence of coronavirus cases weighed on business spending and the group's shares fell as much as 20 percent on Monday. The German company warned that its customers, which include many of the world's largest companies, would spend less money as rising Covid-19 cases hurt business confidence.

Now would be a crazy time for banks to resume dividends, argues FT assistant editor Patrick Jenkins. Claims that the worst is over ignore the reality of the second wave problems and the delayed budget impact of businesses and individuals that have been cushioned by government aid.

A vaccine being developed in collaboration with the University of Oxford AstraZenecaproduced a robust immune response in the elderly, the group at risk for the disease, according to two people familiar with the finding. UK Health Secretary Matt Hancock dampened expectations for an accelerated vaccine roll-out by the end of the year, but expected the "bulk" of a rollout in the first half of 2021.

Global economy

Bilateral debt repayments (US $ billion) due this year bar chart shows China is the dominant bilateral lender in sub-Saharan Africa

As Zambia moves towards Africa's first default in ten years and pressure on other debt-ridden countries during the coronavirus pandemic, the crisis has highlighted the scale and fragmentation of Chinese lending, as well as Beijing's reluctance to fully align with global debt relief plans. According to the World Bank, the country's share of the bilateral debt of the world's poorest countries to members of the G20 has risen from 45 percent in 2015 to 63 percent last year.

EU member states affected by pandemics have made it clear that they intend to make full use of the EUR 390 billion in grant donors agreed in July for recovery funds. It is much less clear to what extent they want to take advantage of the cheap loans that the European Commission also offers.

According to the IMF, the global economy is expected to shrink by 4.4 percent this year. This is the sharpest decline in modern history – millions of people are plunged into poverty. However, according to UBS, the world's billionaires have gotten wealthier compared to 2019. The trend observed in regions from Brazil and China to the US and Germany is another indication that the pandemic could deepen inequality.

Graphic showing tech and health billionaires' wealth has increased with the pandemic

Get in touch

How is your workplace dealing with the pandemic? How do you deal with it as a professional or a manager? And what do you think companies and markets – and our daily lives – will look like when we show up? Also tell us what you think about this newsletter and how we can make it more useful for you. Email us at [email protected] We can publish your contribution in an upcoming newsletter. Many Thanks.

In response to the coronavirus pandemic: FT readers reply, reader Light_1 wrote:

It is worth remembering that the Swedish health system is in the top 3 worldwide, well ahead of the UK's NHS. With better available capacity, Sweden can cope with peaks in demand.

The essentials

Unilever this month issued a global thank you to its employees for their months of pandemic productivity. Pilita Clark praises companies for giving their employees more free time, from Google to Chegg. Some groups have found that employees who have Friday off only need to catch up all day on Saturday. "The main thing, however, is to try, as the day off pioneers learn."

Last thought

Emily St John Mandel envisioned a slightly different outcome than a pandemic in her 2014 breakthrough novel, Station Eleven After the Apocalypse – a world beyond technology. During lunch with the FT, she admits that her vision of "pandemic and then no technology" was upside down. But she believes that fiction and reality will likely combine the survival of art and the growth in reading. In her new book The Glass Hotel, she predicts a more decentralized world and many people who are on their way to an alternative life.