COVID-19 remains the dominant issue for global markets – the continuing surge in global and US coronavirus infections – the latter are running at more than 70,000 a day and heading higher, while over 14.2 million people have been infected worldwide.
American deaths topped 140,000 at the weekend and are now running at 5,000 people every week. By contrast, Canada has reported total deaths of 8,800 since the pandemic started.
Global deaths climbed over 600,000 on Sunday. The US, India, Brazil, Japan, Australia, Japan, and even China have seen higher numbers of infections in the past week.
Flash updates of manufacturing and business activity so far this month will be released for the US, Europe, Australia, and Japan in the coming week will be scrutinised for further recovery signs at the start of the third quarter, or if there are new signs of a slowdown.
Global business outlook surveys, from Markit, showed that sentiment regarding business activity in the year ahead fell, with profits set to be hit and hiring and investment projected to be stagnant over the coming year.
“While June PMI surveys hinted at a return of global business activity, adding to signs of a sharp rebound since the height of the COVID-19 lockdowns in April, underlying demand conditions remained frustratingly subdued, with global exports still acting as a key drag on the global economy,” Markit economists wrote on Friday.
“The current demand environment also reflects emergency stimulus measures, with fiscal support and employment support schemes temporarily buttressing consumption and job retention,” IHS Markit pointed out in its weekly outlook, highlighting the biggest concern globally.
In the US a quiet week outside the continuing surge in COVID-19 numbers.
The July flash survey will allow us to gauge if a return to growth for the economy in the third quarter will happen — US retail sales ended the quarter up 7.5% for a solid gain overall.
Other US data will include jobless claims, home sales, and regional manufacturing surveys – all second-tier data.
The US second-quarter earnings reports step up this week with airlines, energy services, and some tech reports, including Microsoft.
In Europe, the flash PMI data for the Eurozone, Germany, France, and the UK will be accompanied by national sentiment surveys in Germany, France, and Italy as well as retail sales and household finance figures in the UK.
In Asia, the flash PMI data are supplemented by key releases, including South Korea GDP updates, trade figures in Taiwan, and Thailand, alongside employment data for Singapore, Hong Kong SAR, and Taiwan.
Japan releases consumer price inflation data tomorrow – it is expected to again be weak.
Central bank meeting minutes in Australia and Japan will be watched for policymakers’ latest assessments of the economic outlook.
Reserve Bank governor speaks tomorrow to lunch in Sydney (it’s an annual address by the RBA Governor). He speaks on “The Labour Market and Public Sector Balance Sheets” on the same day as the release of the July board meeting minutes.
On the data front, the AMP’s Dr. Shane Oliver says we can expect preliminary June retail sales (Wednesday) to rise 5% after a 17% surge in May and preliminary trade data will also be released Friday.
The June 30 production and sales report from the resources sector continues (see separate story) with a couple of annual or quarterly profits.
