Lifting lockdowns

Posted by: Paul Donovan

14 Apr 2020
  • China's March imports and exports were both stronger than expected, as the country's lockdown was slowly lifted. China has subsequently been hit by the global demand shock of other countries closing their economies. This may also create issues for domestic supply (China does rely on imported components).
  • Spain has started to ease its lockdown – although this was stricter than other countries. The easing brings it closer to lockdowns elsewhere. Danish restrictions ease from tomorrow. France has announced an extension of its lockdown into May. The UK will make a decision this week.
  • US President Trump is asserting the authority to end lockdowns. State governors and lawyers disagree. If there is confusion over responsibility, there is a risk that some people follow the president's advice, and some follow state orders. That would not be well received by markets. A council to re-open America has been formed. There are no economists on the council.
  • Oil prices have seemingly stabilized above their lows, in the wake of last week's decision to cut production by just under 10 million barrels per day. There are three Fed speakers on the agenda today, but central bank policy is the junior partner to fiscal policy in the current crisis.

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