Bounce-back continues

Posted by: Paul Donovan

15 Jun 2020

Daily update

  • China's production and retail data both showed the continuation of the economic bounce-back. There were reports that the data was a little below consensus, but consensus ranges for nearly all economic releases are extraordinarily wide these days. Numbers should be judged for themselves, not against the average expectations of a small number of economists.
  • Virus concerns hit markets in Asia after parts of Beijing were locked down following an increase in cases. It is fear of the virus, not the virus itself that does economic damage. If we have localized lockdowns but fear in the wider economy is contained, then the economic impact is minimized. We now need to monitor economic activity in response to virus cases, not just the number of virus cases.
  • The French government accelerated the lifting of lockdown restrictions. The UK is allowing shops to reopen today - the UK was already shopping on line far more than other economies, however.
  • The data calendar today is not especially interesting. April trade data from the Eurozone is a politically sensitive topic, but one that is not likely to be a focus just at the moment. A US business sentiment opinion poll is due, which can just be ignored.

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