| Welcome to your morning markets update, delivered every weekday before the European open. Good morning. Oil rebounded, European coronavirus responses are still in focus and a heavy earnings day is kicking off. Here's what's moving markets. Accepting Junk The European Central Bank will accept some junk-rated debt as collateral for its loans to banks in a move that aims to shield the euro area's most vulnerable economies. The prospect that some government and corporate bonds may face downgrades because of the cost of fighting the pandemic has unsettled investors, threatening to limit the ability of distressed companies to access the credit they need to survive. The decision to ignore deeper ratings cuts comes two days before a possible reduction for Italy by S&P Global Ratings. EU Summit It's not just central bankers taking action. European Union heads of government will hold a videoconference later to discuss the next steps in tackling the pandemic as the trading bloc faces an economic contraction of as much as 10% this year. The European Commission is proposing a 2 trillion-euro ($2.2 trillion) plan for a recovery, according to an internal document seen by Bloomberg News. Some of the hardest-hit member states have argued for the use of joint debt sales, or so-called coronabonds, to finance the recovery. Virus Latest Italy registered its highest number of new coronavirus cases in four days on Wednesday, while the World Health Organization warned that infections are trending upward in Africa, Latin America and Eastern Europe, even though numbers are low. The U.K. government is to survey 20,000 households in a bid to track the spread of the disease. Spain's parliament backed a plan to extend a state of emergency to May 9. And a worrying study found an 88% death rate among Covid-19 patients in the New York City area who had to be placed on ventilators. Oil Higher Oil extended its recovery from Monday's plunge below zero but remained under intense pressure from a swelling global supply glut. Already inundated with bearish signals, the market shrugged off data showing U.S. stockpiles rising to a three-year high and petroleum demand at a record low. An order by President Donald Trump authorizing the Navy to destroy any Iranian gunboats that harass American ships may have lent some support. In stocks, Asia saw modest gains and European futures are little changed. Coming Up… The earnings rush continues with lender Credit Suisse AG, consumer group Unilever NV and miner Anglo American Plc among those reporting. Carmaker Daimler AG abandoned a forecast made just two months ago. Elsewhere, euro area and U.K. purchasing manager indexes for April are likely to slump again, while U.S. PMIs, jobless claims and new home sales are all expected to be ugly. Ukraine is set to bring Europe's highest benchmark interest rate below 10% for the first time in six years. What We've Been Reading This is what's caught our eye over the past 24 hours. And finally, here's what Cormac Mullen is interested in this morning While U.S. funding markets continue to ease -- a positive backdrop for risk assets Stateside -- their equivalents in Europe are still showing signs of stress. As my colleague Stephen Spratt pointed out Wednesday, European bank borrowing rates are ticking higher and markets are pricing in an expectation that trend will continue in the short term. Credit concerns are one part of the rise but the unintended consequences of Federal Reserve measures to boost dollar liquidity are also at play. They have driven up the premium to swap euros for dollars to record highs, fueling demand from opportunistic investors to compete for cash in European markets to take advantage of this trade. Traders expect Euribor -- the rate at which European banks borrow from each other -- to continue to climb till at least June, before a gradual decline into year-end. That's dampening the positive impact of historic central bank stimulus on the region's lenders and could increase calls for further action from policy makers at next week's ECB meeting.  Cormac Mullen is a Cross-Asset reporter and editor for Bloomberg News in Tokyo. Like Bloomberg's Five Things? Subscribe for unlimited access to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. | 
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