December Global Macro Monthly & Investment Strategy - Covid 19: It’s behind you… Oh no it isn’t
- The pandemic dominates the short run outlook. In the Eurozone and UK, cases remain elevated and restrictions could rise anew. In the US, this process is underway as cases set new records. Both threaten winter weakness
- A vaccine offers hope for 2021. Restrictions could be eased as the vulnerable are inoculated. Mass vaccination should spur growth more materially.
- Rising global trade has boosted some economies, including China and Germany. While renewed virus cases threaten another demand dip, the vaccine poses some threat if consumers rotate to long-denied services.
- Policy remains supportive. The Euro area agreed on its fiscal programme. The US looks set to pass further short-term emergency stimulus. Central banks remain committed to ongoing accommodative policy, with the ECB the latest to extend its policy easing, now through to 2022.