- Fink 🧠
- Posts
- Delta sends Oz into lockdown, but don't panic!
Delta sends Oz into lockdown, but don't panic!
Risk sentiment has taken a bit of a knock in Asia, with Delta variant fears bearing the brunt of the blame.
06:26BST
U.S. futures are slightly lower after tech stocks led indices to new highs yesterday.
Bonds & FX not moving much...
In Australia, low vaccination rates relative to other G10 nations are having an impact.
@ShaneOliverAMP
Only 25% of the population have received the first dose, and the Australian government is struggling to contain these sporadic outbreaks...
The U.K. is the big test for markets. All about these two blue lines 👇👇👇
@ShaneOliverAMP
New cases don't matter as long as new deaths and hospitalisations don't follow the same trend.
Exactly the same as the flu or common cold.
New health secretary Javid said yesterday that “we have to learn to live” with Covid.
On lifting lockdowns...
“We see no reason to go beyond July 19th.”
It's a clear message: The vaccine is proving effective, the (remaining) restrictions are going to be lifted, things will be going back to 'normal' as soon as possible.
According to CovidVax, the U.K & Spain will both achieve 'herd immunity' (70% double-dosed) on the same day (12th of August) at current pace.
High risk groups have been fully vaxxed for a while already...
Germany will achieve herd immunity 10 days later on the 22nd of August...
Which makes this German tourism pressure so bizarre.
Short lockdowns in Oz are no reason to panic according to ANZ Research:
The lockdown experience in Melbourne shows that economic scarring from short lockdowns is unlikely and that spending will recover (and perhaps overperform) as soon as the lockdown ends.
And consumer confidence is bearing up well under the circumstances.
ANZ
China's slowdown: The latest Beige Book data is out and it's not painting a pretty picture.
China’s economic growth is on course to lose steam in the coming quarter amid Beijing’s increasingly tight credit controls and the slow recovery in consumption, which may drag down growth next year, according to reports from the World Bank and US-based research firm China Beige Book.
The China Beige Book report also found that although headline growth was similar to the first quarter and employment was improving, both investment in small companies slowed and borrowing “fell off a cliff”.
Ties in well with this report on home loans that I stumbled across yesterday
🇨🇳🏡China: Banks in hot second-tier cities suspend home loans
⛔️Some banks have stopped handling new and second-hand housing loans
📉Professor Pan Helin believes housing credit will be further tightened until real estate prices begin to trend parallel or downward pic.twitter.com/flFXyCO0Jb— 📈 Tim 📉 (@VolaTim) June 28, 2021
PBoC says the economy is 'stabilising'
Oil demand is back in focus ahead of the OPEC+ meeting.
Good summary by ING 👇
Concerns over a pick-up in Covid-19 cases in some regions appears to have hit sentiment.
The UK saw its highest number of daily cases yesterday since January, with the Delta variant spreading.
This has led to worries over a return to international travel, and Hong Kong has now banned all flights from the UK due to the rising numbers of UK cases, while the EU has also tightened controls on UK travellers. Elsewhere, parts of Asia continue to see a large number of cases, which has led to an extension of restrictions.
Malaysia has extended its lockdown, with cases not falling as quickly as hoped.
In addition to continued Covid-19 concerns, there is probably an element of speculators taking some risk off the table, with uncertainty over what OPEC+ may agree when they meet on Thursday.
The group has surprised the market several times over the course of this deal, and so market participants wouldn’t want to be caught off guard. According to Bloomberg, numbers which will be shared at the OPEC+ Joint Technical Committee meeting today, show that if output is kept unchanged, then the market is estimated to see a deficit of 1.7MMbbls/d over August, and an average deficit of 1.9MMbbls/d over 2H21.
Bank buybacks resume & Big Tech anti-trust cases are being thrown out: It's like we've never been away.
For the day ahead, German CPI's and U.S. consumer confidence are the main data points (although neither are expected to move markets much).
Lagarde & Barkin are set to speak too.