Independent Strategy

Macro Category

Attached are the vaccination figures for major areas. Global vaccinations rose 14.5% on the week. The EU is now at 25 (up from 21 last week) shots per 100 people — getting closer to the 30 level that may be the threshold at which vaccines may start to limit transmission. But still only 18% of the population has had at least one shot.  Still way behind the UK, US, Israel etc on both measures. But EU has faster vaccination rate, so the gap should close in about 6 weeks on shots per 100 pop basis.

Easter drag having an impact across most markets, leading to a drop in overall global economic activity over the past week (to 10th April).  This seasonal drag is mixed up with tighter restrictions in many European countries in reaction to the more recent increase in Covid cases and slower rollouts of vaccines.  But comparing the improving countries with the laggards still gives us some insights as to the severity of the drop here, with around half the decline in France Germany and Italy appearing to be a function of Easter, with the rest the virus.

March surprised mildly to the upside of consensus expectations, headline CPI hitting 2.6% yoy following a 0.6% mom increase.  The main driver was the transport component (i.e. gasoline prices).  These went from a net drag of -0.39%pts last year to a +0.96%pt driver of the yoy rate this time round, so a net swing of 1.35%pts, or half of overall yoy CPI rate.

Vaccinations rose 15% for the week to April 11. But.... What matters going forward for markets in the vaccination data is that the EU has reached a 20% vaccination rate (defined as % of population to receive at least one shot).  The rate at which there seems to be a market decline in infections is 30%. At current vaccination rates the EU will get there in 4 weeks and will approach the current UK and US rates in 8 weeks.

Despite the resurgence of Covid cases in certain places, the global economic recovery remains on track. That’s based on Google’s fast track data (through to March 27th).  Europe, which suffered last week, was on the up again with improvements in Germany, France and Spain.  The dip in Italy also looks to have based out, helped by a pick-up in the last couple of days.  The UK meanwhile continues on its improving streak.

Google’s fast track data has painted more of a mixed picture over the past week (to 20th March).  For the most part the overall trend is still one of improvement, but fairly pronounced declines in a couple of countries in our sample has taken a toll and is rather concerning.

The latest batch of Google mobility data, which take us up to 13th March, hints at a slight slowdown in the rate of improvement, amid some setbacks in some of the individual countries we survey.  But this looks like ebb and flow and doesn’t detract from the underlying trend, which remains one of improvement.

The improvements made in mobility and economic activity continues based of the latest batch of google mobility data.  The series take us up to 6th March and based on that the recovery remains on the front foot, underpinned by expanding vaccine coverage and the resulting boost to confidence that has delivered as well as the overall decline in infection rates, even if that trend looks to have flatlined more immediately.

February Non-farm payrolls recorded a 379k gain, comfortably exceeding the +182k median forecast.  This leaves the 3m average at +80k.  Private sector payrolls were significantly better than the headline print at +465k, manufacturing added +21k jobs while government dropped -86k.  The surprise might have been even higher were it not for the weather events in Texas, which was behind the 939k people not at work due to the weather (Feb average is 385k).  The unemployment rate ticked down to 6.2% and participation was unchanged at 61.4% despite this.  The workweek did drop though, to 34.6, although this is from a rather elevated 34.9.

Based on Google mobility statistics we’re seeing a sustained improvement in activity now.  This is only likely to gather speed as vaccine coverage continues to expand, restrictions ease, alongside the seasonal improvements one should expect upon the arrival of spring, and, with a bit of luck, some UV.

The past week hasn’t really seen any substantial shifts in activity, even if it’s increasingly clear that we’re past the worst as Covid cases continue to decline globally and the first signs of the vaccine impact start to percolate into the data. In the overall rankings, it is the Europeans that remain the most depressed compared to pre-pandemic levels of activity, with the UK languishing at the bottom of that league.  Germany and France took a step back based on the data, while there was a further mild improvement in Spain and Italy.

Global

10th February, 2021 » Early signs of recovery

With the continued decline in new reported Covid cases globally, it is no surprise that we’ve started to see an improvement in overall activity levels.  At least based on the Google data. Indeed, all but one of the countries in our sample recorded a week on week improvement.  The worst was France and that was simply stable.  Europe remains at the bottom of the pile in terms of overall activity, but the corner has certainly been turned and we’d expect to see this pick-up to extend and accelerate over the coming weeks.

Global

3rd February, 2021 » Steady, ahead of recovery

Another week of relative stability as measures to contain the pandemic remained static in most places.  More draconian restrictions in Europe leave the region at the bottom end of the spectrum while EMs and Asia rate far better.

Covid-19 vaccinations rising at a rate of around 40% per week.  Not much difference between EU 38%, UK 30%, US 36%.  Odd given vaccine wars!  The percentage of the population vaccinated at least one time now stands at 1.2% globally, EU 2.7%, US 8.4%, UK 13%.  While this is rising fast, this is still way short of herd immunity. And the percentage of the population fully vaccinated is still very low — less than 1% of the population everywhere except the US, Israel and a few small states (UK 0.7% and EU 0.4%).

Global

27th January, 2021 » Stuck in the doldrums

Economic activity seems to be bedding down in the doldrums amid lockdowns and other varying restrictions on activity.  Europe continues to suffer the most, although weak activity remains a broad phenomenon.

The noise of the holiday period might have overstated the extent of the decline in economic activity but there is no doubting that the backdrop remains very depressed.  Lockdowns and other restrictions remain the driver of this, with Europe bearing the brunt of the hit.  But high levels of Covid infection continues to dampen the economy even in places where efforts to tackle the virus are less draconian.

As we move into 2021, we are getting a clearer picture into the extent of the slowdown in economic activity that the resurgent Coronavirus has triggered.  Although the Google mobility indices were already indicating a sharp deterioration, the scale of the decline reported through to the turn of the year was exaggerated by holiday effects, as we noted last time.  Data through to the 8th of January, which was released yesterday, gives us a clearer picture of how things stand.  And while it is not quite as bleak as over the Christmas and New Year period, the data still paints a fairly poor picture of global economic health.

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