José Ramón Díez Guijarro (Bankia Estudios ) | The first weeks of the opening of the economies are serving to gauge the response of consumption, a key variable in determining the profile and intensity of the recovery. In the US, the fiscal programmes for aid to families injected more than 300 billion dollars into disposable income in the second quarter. In Europe, instead of using direct aid as in the US, they have preferred to activate temporary employment suspension programmes (ERTE in Spain, kurzabeit in Germany, etc).
Adam Vettese (eToro) | FC Barcelona fans have invested over $1.3m in tokens issued by the club which gives them the chance to vote on how it is run. Known as Barca Fan Tokens, more than 600,000 tokens were sold at $2 each in just two hours earlier this week, according to Coindesk
Gilles Moec (AXA IM) | The divergence between Europe and the United States on the pandemic front continues.In the latter, the number of states facing an acceleration in the propagation of the virus rose furthe. Meanwhile, in Europe, while some clusters continue to appear, the speed of the epidemic is still markedly lower than when authorities considered it was safe to start re-opening the economy.
Frenzied rate cuts (more than a hundred worldwide) and liquidity injections by various central banks, amounting to more than $6 trillion, added to the fiscal stimuli of all kinds already committed for another $9 trillion. An unprecedented aid package that amounts to 19% of the world’s GDP in 2019. All aimed at trying to achieve a V-shaped recovery that will mitigate the effects (-5% of world GDP) of such an unexpected recession.
Angela Freyre (Julius Baer) | Russia’s central bank slashed its benchmark interest rate to a post-Soviet low as the economy enters a deep recession fuelled by the fall in oil prices and the coronavirus pandemic. The bank lowered its key rate by 100 basis points to 4.5%, following a 50 basis-point cut in April.
Gary Buswell | Conspiracy theories seem to be a staple of major global events, so it’s no surprise that COVID-19 has become the biggest hotbed for unfounded “alternative narratives” since 9/11. Various theories are circulating across social media, sucking in a worrying number of high-profile public figures who seem willing to share disinformation without checking the facts, even though these narratives have little basis in reality and are not supported by any credible experts or academics.
, via The Conversation | The fraying fabric of the global order was ill-prepared for a pandemic. As the focus now shifts from health to wealth amid the ensuing economic crisis, the World Health Organization (WHO) will cede the stage to other international bodies tasked with steering a course through the current turmoil and recovery to come. Enter stage left the International Labour Organization (ILO), a sister body of the WHO and the very first specialised agency of the United Nations.
Mona Mahajan (Allianz GI) | With equities rallying more than 30% since late March, driven most recently by cyclicals, financial markets were perhaps due for a period of consolidation. New risks could emerge, but we continue to believe in the ongoing economic re-opening story — so cyclical sectors may remain market leaders in the near term. Markets could be supported further as elevated levels of cash are put back to work.
CaixaBank Research | The differences between countries in the severity and duration of the lockdown measures at the beginning of the year have been reflected in the declines in GDP in Q1. In Q2, the epicentre of the pandemic (and the lockdown) has moved from China to Europe and America, which will result in unprecedented declines in economic activity in the major advanced economies.
Darwei Kung (DWS) | The oil rally continues. On the supply side, OPEC and Rus-sia reached an agreement to extend the June production cap into July instead of implementing the planned scaling down of cuts. This is perhaps a sign that the major produc-ers are conscious of the oil market’s fragility despite the recent rise in oil prices. Large inventory overhangs support that fear. On the demand side, the re-opening of economies across the globe has brought significant optimism, even though the amount of realized demand that has emerged give little support for it.