Aug 23 2021 0
The Delta variant of the coronavirus is threatening the recovery of many countries and making central banks change their plans. What are the changes? How should we cope with that? They will be all answered in this article.
- Markets continue to fear that the Delta coronavirus variant could hamper the global economic recovery as central banks begin to pull back on pandemic-era monetary stimulus.
- Minutes from the Fed's July meeting released last week showed officials largely expected to reduce bond purchases by the end of the year.
- The EU's top economy, Germany, reported 9,280 new Covid-19 cases, the highest level since May 20. This increase is a worrying trend, for Germany as well as for the EU as a whole and the euro.
- Oil prices fell for a seventh straight session as they suffered from a stronger dollar and concerns about the outlook for demand.
The risk of stocks
Asian stocks look set to rise on Monday after bargain hunters fueled a rally in US stocks. But traders also weigh growth risks and await the Jackson Hole symposium for clues on the Federal Reserve's policy outlook. Futures markets rose in Japan, Australia and Hong Kong, while US stock futures fluctuated. All major groups in the S&P 500 index rallied late last week, and the tech giants lifted the Nasdaq 100. Beijing's regulatory crackdown has seen US-listed Chinese stocks suffer their longest streak of weekly losses in a decade despite Friday's gains. Commodities remained the focus, following a decline in raw materials such as crude oil and copper as well as weakness in commodity-related currencies.
Change of plan
President Joe Biden said the United States had extended evacuation efforts beyond the perimeter of Kabul airport, warning of possible terrorist attacks and acknowledging that he may be forced to delay his departure from Afghanistan. Speaking on Sunday at the White House, Mr Biden declined to provide details on the "tactical changes the US is making" in light of current developments, saying it "remains a dangerous operation." Meanwhile, the country's exiled central banker said Afghanistan's new Taliban-led government faces a series of shocks that are likely to lead to a weaker currency, faster inflation. and capital controls. And women in the country are also being threatened.
Singapore push for recovery
Singapore is looking to add more countries to its vaccinated travel lane program to signal to the world that it is committed to reopening. After starting to allow visitors from Germany and Brunei to be vaccinated from next month, the city government will "work from there to see which countries and how we can go about it", the Transport Minister S. Iswaran said in an interview with Bloomberg. Meanwhile, the release of the third dose of the Covid vaccine has sparked debate on the ethical and political grounds, as a large number of the population has yet to receive any shots. Elsewhere, the delta variant has forced Australia and New Zealand to rethink their virus removal strategies and prompted Australian Prime Minister Scott Morrison to say it is highly unlikely his country will return to case-free.
Close the gap
The Chinese Communist Party has a new slogan to guide its economic policy, a "cross-cycle" approach that government advisers say means acting sooner, in smaller steps, with a longer time frame. It's a departure from countercyclical policy, where central banks and governments add stimulus to boost a slowing economy - like cutting interest rates or taxes and boosting investment. infrastructure investment – and tighten as growth begins to accelerate. Meanwhile, Mr. Xi Jinping has another catchphrase that is being used with increasing frequency and that is "common prosperity" - evidence of the Communist Party's commitment to narrowing the wealth gap. Poverty is increasing day by day in the country. The phrase has appeared 65 times in Xi's speeches and meetings so far this year, up from 30 times in all of 2020.
The new president of Malaysia
Malaysian Prime Minister Ismail Sabri Yaakob adopted a conciliatory tone in his inauguration speech, seeking to bring stability to a country that has seen three prime ministers in 18 months. Mr Ismail has sent out invitations to opposition leaders to be part of the National Recovery Council that oversees the country's pandemic exit plan and the special Covid-19 committee. He also called on all members of parliament to work together to help revive the nation "without looking for differences", following the political developments that toppled the two previous administrations.