Independent Strategy

Macro Matters

November 2020

Independent Strategy Blog: Macro Matters
Global

25th November, 2020 » Weak Europe, US to follow?

The latest google mobility statistics suggest things have stabilised a little.  Although the devil is in the detail.  On the DM side, Europe looks fairly static from last week but this masks a further sharp drop in Italy, which offset something of a bounce in France and the generally steadier picture we’ve seen in Germany and Spain.

We’ve seen a further downturn in the European mobility, as national lockdowns continue to bite, with the UK, France and Italy all falling significantly over the past seven days.  Spain and Germany have been steadier, helped by the fact that they’ve been able to bend the Covid infection curve, with new cases rolling over and doing so from lower infection levels.  Looking at things globally the picture looks more balanced, European weakness offset by ongoing improvements across Asia and in the larger emerging markets.

The latest Google mobility data is starting to show the impact of lockdown 2.0.  What is interesting is how both Lockdown 2.0 is being implemented compared to the draconian measures enacted back in the spring, and how these restrictions are varying in their impact country to country.  The regional divergences we identified last time persist.  This is again a function of the resurgence of the virus in northern hemisphere developed markets, and the measures taken to combat this.

US

6th November, 2020 » US October Payrolls

October Non-farm payrolls number came in at +638k (mkt +600k), leaving the 3m average at +934k.  But the private payrolls number comfortably bettered expectations once again at +906k vs. 690k mkt.  Manufacturing payrolls grew but not as much as hoped (+38k vs. +50k est) while we saw another month of government job losses, -268k following on from -220k in Sep.  Revisions overall were slightly positive though

The tale of diverging fortunes between Asia and Europe (and to a lesser extent the US) persist in the latest Google mobility numbers, as rising Covid infections in certain countries drag on mobility.  The second round of national lockdowns in Europe have started to drag on overall mobility.

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