In the first day of October, the number of coronavirus cases globally has surpassed 34.1 million. Almost 7.5 million of these cases are in the United States, 6.3 million in India, and 4.8 million in Brazil. These three countries are still seeing massive daily increases (in the tens of thousands). The coronavirus is also raging in South America, Europe, the Middle East, and Central Asia, while East Asia, where the disease first appeared, is not as affected at the moment.
We are observing the gradual tightening of lockdown measures in Europe in order to contain the coronavirus. Today Spain’s capital Madrid is entering a city-wide lockdown, complete with a ban on traveling in and out of the city unless absolutely necessary. The United Kingdom is also tightening its restrictions in Northern England, where the recent spikes of Covid-19 infections have been.
Speaking of the United Kingdom, today the British pound took a blow after the European Union announced that it is going to sue the UK for breaching the Brexit withdrawal agreement with the Internal Market Bill. Some clauses of the bill contradict the Brexit agreement. This is why the EU previously asked the UK government to drop or change the bill, but PM Boris Johnson’s cabinet refused to comply.
In terms of the economic calendar, the day began with an onslaught of reports from Japan, mostly Tankan surveys on economic activity in Q3 of 2020, to mixed and somewhat disappointing results.
There were also several PMI reports from Europe. Spain did better than expected with a manufacturing PMI of 50.8, higher than the 50.5 forecast. Switzerland failed to meet the expectations with a PMI of 53.1. Italy and Germany both disappointed, however. Still, the eurozone-wide PMI met the forecast of 53.7, which is the highest level for the past two years. The unemployment rate in Italy was also a pleasant surprise, falling to 9.7% in August.
Later in the day we expect a long string of reports from the United States. The most notable among these will be the PCE price indices for August, the September manufacturing PMIs, and the jobless claims data that is regularly published every Thursday.
