D-PIMS Weekly Market Update - Week of 14th to 20th June 2021
Today’s weekly Update:
Over the course of the last week, headlines were mostly Coronavirus and economic related:
• Monday - The Group of Seven rich democracies will try to show the world at a summit this week that the West can still act in concert to tackle major crises by donating hundreds of millions of COVID-19 vaccines to poor countries and pledging to slow climate change.
U.S. President Joe Biden, on his first foreign trip since winning power, will try to use the summit in the English seaside village of Carbis Bay to burnish his multilateral credentials after the tumult of Donald Trump's presidency.
Whether on COVID-19 or climate change, the leaders of Britain, Canada, France, Germany, Italy, Japan and the United States want to illustrate that the West can compete with the power of China and the assertiveness of Russia.
The bosses of all airlines flying passenger services between Britain and the United States called on Monday for the countries' governments to relax COVID-19 restrictions to reopen travel routes between the two countries. The push for reopening trans-Atlantic routes on Monday comes ahead of meetings between U.S. President Joe Biden and British Prime Minister Boris Johnson at the G7 meeting of advanced economies later this week in Cornwall, southwest England, this week. The pair must use those meetings to agree to restart travel, British Airways chief executive Sean Doyle said in a statement ahead of an online press conference.
Since March 2020, the United States has barred nearly all non-U.S. citizens who have been in the United Kingdom within the previous 14 days from entering the country. Most U.S. travellers visiting the United Kingdom must quarantine for 10 days upon arrival.
• Tuesday – British Prime Minister Boris Johnson wants G7 leaders to sign up to a "Marshall plan" on climate to help developing countries decarbonise their economies but is having problems getting British money allocated, The Times newspaper said on Tuesday.
The five-day office week could become the norm again within two years, the Centre for Cities think tank has told the BBC. A blend of home and office work is expected to be popular while the UK recovers from the pandemic. But some analysts then anticipate a shift back to pre-Covid working patterns for many. Currently, people who can work from home are still advised to do so.
The EU has warned the UK not to take any further unilateral action to delay post-Brexit checks on products entering Northern Ireland from Britain. The warning came from the European Commission's vice president. Maros Sefcovic said the EU "will not be shy in reacting swiftly, firmly and resolutely to ensure that the UK abides by its international law obligations". It comes as the two sides prepare to meet to assess possible simplifications of the Northern Ireland Protocol. The protocol is the part of the Brexit deal that created a trade border in the Irish Sea, in order to prevent goods checks along the Irish land border.
The vaccine rollout is now reaching younger adults throughout the UK, with people aged 25-29 able to book the vaccine from Tuesday in England. The government is aiming to vaccinate all adults by the end of July.
• Wednesday – Coronavirus vaccines and tests are being stepped up in areas of north-west England to try to deal with the rise in cases of the Delta variant. The whole of Greater Manchester and Lancashire will get help from the military to carry out extra tests - similar to the tactics used in Bolton. But local leaders have asked for extra jabs to vaccinate everyone even faster. It comes as debate continues about whether England's next lockdown easing will go ahead as planned on 21 June. There is less than a week until the government is due to announce its decision about the reopening date.
U.S. President Joe Biden departs for Britain on Wednesday on his first trip abroad since taking office, an eight-day mission to rebuild trans-Atlantic ties strained during the Trump era and to reframe relations with Russia. The trip represents a test of the Democratic president’s ability to manage and repair relationships with major allies who grew disenchanted with then-President Donald Trump’s trade tariffs and withdrawal from international treaties.
Fastly Inc, the company behind a major global internet outage this week, said on Wednesday the incident was caused by a bug in its software that was triggered when one of its customers changed their settings. Tuesday's outage raised questions about the reliance of the internet on a few infrastructure companies. Fastly's issue knocked out high traffic sites including news providers such as The Guardian and New York Times, as well as British government sites, Reddit and Amazon.com. Nick Rockwell, its senior engineering and infrastructure executive said the problem should have been anticipated.
China’s May factory gate prices rose at their fastest annual pace in over 12 years due to surging commodity prices, highlighting global inflation pressures at a time when policymakers are trying to revitalise COVID-hit growth. Investors are increasingly worried pandemic-driven stimulus measures could supercharge global inflation and force central banks to tighten policy, potentially curbing the recovery. China’s producer price index (PPI) increased 9.0%, the fastest on-year gain for any month since September 2008, National Bureau of Statistics (NBS) said on Wednesday, as prices bounced back from last year’s pandemic lows.
• Thursday - Matt Hancock has pinned the blame for government errors last spring on faulty scientific advice, saying that he “bitterly” regretted not overruling it. The health secretary used an appearance before MPs to hit back at Dominic Cummings, dismissing claims of lying and saying that the government has been better run since the departure of Boris Johnson’s former chief adviser.
Boris Johnson has tried to play down differences with Joe Biden after their first face-to-face meeting by insisting that they are in “complete harmony” over the need to resolve issues around the Northern Ireland peace process. Yael Lempert, America’s most senior diplomat in Britain, told Lord Frost, the Brexit minister, that the government was “inflaming” tensions in Ireland and Europe with its opposition to checks at Northern Irish ports.
The United States is buying 500 million doses of the Pfizer-BioNTech vaccine to donate to the 100 poorest countries amid warnings that the developing world will struggle to recover from the pandemic. President Biden is expected to announce the plan at the G7 summit in Cornwall, which starts tomorrow.
American consumer prices rose at their fastest pace since the global financial crisis last month, increasing concerns about inflation as the country’s economic recovery gathers pace. The headline US consumer price index rose by 5 per cent in May compared with the same month last year, ahead of expectations and a rate of growth not seen since August 2008. Stripping out volatile food and energy costs, the index posted its biggest yearly increase in almost three decades. Policymakers insist that the increase will be transitory as Covid-19 restrictions are loosened, but fears that a sustained rise may force them to tighten monetary policy has rattled equity and bond markets.
• Friday – Boris Johnson has opened the G7 summit by telling world leaders they need to learn lessons from the pandemic to ensure that “we don’t repeat some of the errors that we doubtless made”, and called on them to “build back fairer” in a “more gender-neutral and a more feminine way”, warning that inequalities threaten to become a “lasting scar” as the world recovers.
The Indian variant of the coronavirus is 64 per cent more infectious than the Kent strain and twice as likely to put patients in hospital, Public Health England has concluded. Cases of the faster-spreading Indian, or Delta, strain are now doubling every 4.5 days in some parts of the country, and account for 96 per cent of cases across England, making it far harder for Boris Johnson to end all restrictions in a week as had been planned.
U.S Defence chiefs are drawing up plans to bomb Taliban targets if the militant group threatens to seize Kabul after US troops withdraw from Afghanistan, officials said.
• Over the week, the main Global Stockmarkets were all positive. The investment D-PIMS Portfolios were all up for the week. They were helped by their diverse allocations.
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