Today the financial markets are once again feeling the strain of the coronavirus pandemic. The total number of cases worldwide has surpassed 98 million.
The situation remains worrisome in the United States, where President Biden is making his first moves to establish a vaccination and funding plan to tackle the pandemic. The United States surpassed 25 million cases yesterday, with over 400,000 deaths. President Biden warned that the country may as well reach half a million lethalities by the end of next month, based on the current data about the spread of the virus.
The United Kingdom is still seeing over 30,000 new infections daily and has surpassed 3.5 million cases. Prime Minister Boris Jonhson stated that the country might be in need of a prolonged lockdown, possibly until the end of the spring season, before the virus stops posing a threat. Germany is also gearing down for longer lockdowns.
Japan is yet another country that is currently experiencing a peak in Covid-19 infections. Despite timely governmental actions, there is a growing concern that Japan will not be able to stave off the virus enough to hold the Summer Olympics, which were already rescheduled from 2020 to this year.
Stock indices around the globe are taking a hit today due to the coronavirus pessimism. US indices are likely to follow suit because of the overall disappointment prevailing on the financial markets today.
The economic calendar is quite busy with fundamental events today. Earlier in the day, Japan’s inflation rate for December was revealed to have dropped to -1.2% after hitting -0.9% a month earlier.
In the United Kingdom, reports on consumer confidence, public borrowing, PMIs, and retail sales were all disappointing. Elsewhere in Europe, Germany’s composite and services PMIs were better than expected, while industry took a loss, but all numbers are below 50, indicating a contraction of the economy. The eurozone PMIs showed growth in manufacturing but a contraction in the composite index due to the recent lockdowns affecting the services sector.
We expect the preliminary manufacturing PMI from the United States later in the day.
