Good Morning,

It’s what everyone was dreading. A  second wave of the virus was always going to be far worse than the first, with more economic and psychological damage done as people start to resume and are then told that they can’t. Stock markets are trying to get ahead of the curve and sold off going into the weekend and are getting the week started with more selling.
Beijing has another bout of cases, linked to the city’s largest seafood market, with some 90 people confirmed to have contracted the virus over the weekend. The market has been closed and flights into Beijing have been diverted to other airports in a move to try and prevent imported cases. Authorities in China are far more effective at contract tracing than we are and have no issues at locking down towns with no notice, so hopefully they can act quickly to contain it. Prior to this the city had made it 50 days in a row without a new case.

India reported 11,000 new cases of the virus yesterday, despite being locked down from the end of March to the end of May. India is now the fourth hardest hit country, behind the US, Brazil and Russia, but cases are forecast to grow quite rapidly, with ministers expecting cases in Delhi to grow from 39k to 550k by the end of July.

In the US the number of states reporting record numbers of new cases is on the rise. The combination of states generally opening up and also gatherings over Memorial Day weekend, three weeks ago, are the catalysts. With this incubation period, there’s a real risk that contagion during the protests which also started around that time will start to show up in the numbers soon too. Nationally, new cases are now at their highest since the 2nd May, though testing has increased massively since then too so not the fairest of comparisons however people being admitted to hospital is also on the rise and that’s not a metric that testing affects, so it’s definitely on the way back. Reuters has the long read on this.

Still, it’s not all bad news: Spain is re-opening its borders from the 21st of this month and that includes to British holiday makers. Brits wanting to travel will likely only do so if they know they haven’t got to quarantine for 14 days upon their return, so we’ll be betting that this rule is dropped before the end of the month as the government comes under pressure from just about everyone to roll back on it.

On Brexit (to lighten the mood): Boris will say that he wants a deal done with the EU by the autumn – the observant of you will see that this is what the EU have been saying for months! The PM wants to set the tone ahead of five straight weeks of negotiation that are due to kick off at the end of June. This BBC article talks about some of the compromises that could be achieved in fishing and the level playing field and though they’re heavily simplified, they do show that their could well be some middle ground if both sides can compromise – which is now a must if a deal is going to be done, as we’ve seen the stalemate that maintaining ideals brings.

UK shops re-open today after almost three months of being shut. It’ll be an interesting week, as we see whether or not people are willing to come back to the high street and stick to the new protocols;  gone are the days of mooching around and seeing what takes your fancy. Pick something up to take a closer look? Only if you’re going to buy it. The Times is reporting that if sales disappoint then the government may introduce temporary VAT cuts as a way to kickstart things – though Rishi Sunak rightly pointed out that there’s no point in cutting VAT on sectors that are still shut. We’d argue that just about everything will be so deeply discounted that taking VAT off won’t be the thing that brings people back.

Looking ahead: there’s plenty of data this week that could be of interest, should people want to take notice and not just concentrate on the growing rate of cases.

Be well


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