Chief Economist’s Weekly Brief – Uncomfortably numb?

Q2 GDP fell off a cliff. Yet months of shocking headlines has made record declines feel somewhat “normal”. They’re not. What is creating a stir is the rising number of hotspots locally as well as globally. The battle with the virus is going to be long, drawn out, and fraught with unpalatable trade-offs, especially between lives and livelihood.

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Chief Economist’s Weekly Brief – An atypical recession

After record declines the PMI surveys for June suggests that a rebound is underway. But then this was expected. And doesn’t alter the outlook of a long and uncertain recovery. The chances of substantial job losses and preventing a flare-up in infections as the economy open up will be among the key challenges. Look no further than the US which has already seen some of the states reimpose restrictions as the second wave continues to intensify.

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Chief Economist’s Weekly Brief – Bottoming out?

Last week, several economies reopened without a material evidence of a spike in infection rates, well, so far.  That said, the northern-southern hemisphere divide in the number of cases continues to widen, leading some (incl. the Fed) to believe that there might be a second wave. Two risks resurfaced – escalation of US-China trade tensions and disruptive Brexit. On the activity front, data for May suggests that the worst might be behind us.

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Chief Economist’s Weekly Brief – More of the same

The easing of lockdown restrictions, and with it the economic recovery, looks set to be taken tentative step by tentative step. Witness South Korea having to reintroduce some distancing measures. Meanwhile data is putting more colour on the enormous scale of the economic damage. No surprise that the Bank of England is envisaging the worst downturn since 1706. Even worse than the “Great Frost” of 1709.

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Chief Economist’s Weekly Brief – Dichotomy

April has been a month of contrasts. Multi-year low prints on economic activity in both the US and the Euro area, with worse to come, on the one hand. While equity markets continued to push higher from their late-march lows, buoyed by unprecedented monetary and fiscal stimulus. Markets will always run ahead of the economy. The question is, with so much uncertainty on the pace of recovery, have they overdone it? 

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