The Pulse
- Since the initial outbreak, COVID‐19 has spread to over 210 countries, and estimates indicate it could trim global economic growth by between 3.0% to 6.0% in 2020.
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Click here to read the full update. Cyclical indicators including PMIs and unemployment rates remain weak but are improving, bolstering the market’s hopes of a speedy recovery.
- Some countries and US states reversed course in late June, reimposing social distancing measures and closing businesses to prevent a second wave of infections.
- Market volatility declined while large raisings of debt and equity have helped to strengthen balance sheets during this period of uncertainty.
- The Reserve Bank of Australia kept rates on hold at 0.25% at its July meeting and is prepared to scale up bond purchases if needed.
Australia
The Australian economy contracted by a relatively mild ‐0.3% in the March quarter but given the full impact of shutdowns likely to be felt in the June quarter, it is almost certain that the Australian economy is in its first recession in 29 years.
Global economies
The rise in the number of COVID‐19 cases globally continues to create uncertainty about the shape of economic recovery. An important factor in coming months will be the extent to which governments continue with fiscal measures to support businesses and households.
US
Economic data for June saw some upside surprises as a gradual reopening of the economy clawed back job losses resulting from the lockdown. Nonfarm payrolls jumped 4.8 million in June, surpassing expectations of a rise of 3 million.
Europe
As European Union nations began reopening their borders to other EU members, debate continued regarding when the borders should be reopened to non‐EU countries.
China
Economic data indicates that the world’s second‐largest economy is gradually recovering from the pandemic. The Caixin General Services PMI rose from 55.0 in May to 58.4 in June, helped by new orders growing the most in nearly a decade as companies reported a return to more normal business operations.
Asia Region
Throughout Southeast Asia, the response to the pandemic has seen mixed results. The total number of cases in the region reached 170,000 in early July, with Indonesia the worst hit, both in terms of new cases and deaths.