On the first business day of August, the world is sitting at just under 200 million coronavirus infections. The global daily infection rate was at its highest since May a few times this week but has gone down during the weekend, which may be a transitory trend.
Countries that are currently experiencing outbreaks and saw more than 20,000 new Covid-19 cases each yesterday include (in order of severity of the outbreak) India, Iran, Indonesia, the UK, Russia, the US, Turkey, and Brazil.
China is still reporting relatively low Covid-19 infection numbers, but it was confirmed that the delta variant has reached the country via Russia. More and more cities in China are getting ready for lockdowns and other measures to limit the spread of the coronavirus.
In other words, Covid-19 remains a primary concern for the financial markets, especially when it comes to its potential to cause new rounds of lockdowns, travel bans, and how that can hurt aspects of the global economy such as the demand for crude oil.
As for events on the economic calendar, today there are a few points of interest.
Australia published its final manufacturing PMI and Ai Group manufacturing index for July, both slightly lower than the previous month.
Germany’s retail sales for June came in at 6.2%, which isn’t bad but is likely going to go unnoticed today as investors are still hyped on last week’s data from the eurozone.
Both Germany and the eurozone released their final manufacturing PMIs for July as well, with the reports coming in at 65.9 and 62.8, respectively. Both were better than the forecasts and will have a positive effect on the already stronger-than-usual euro.
Later today we expect the ISM Manufacturing PMI and Markit Manufacturing PMI out of the United States as well.
In other news coming out of the United States, Congress appears to be moving ahead with a $1 trillion infrastructure bill. This is a trimmed-down version of a proposal by President Biden from a few months ago. Democrats are likely trying to fight for more spending as there are other issues they are eager to pump money into, but even if they cannot do that, more stimulus for the US economy will be good news regarding the outlook of the economy.
US stock indices will trade higher today, in part due to the hope of more stimulus, but also thanks to reassurances by the Federal Reserve that its own asset purchases will go on because it does not see the US economy as being ready for stimulus to end.
