Hello and welcome to our continued coverage of the global economy, financial markets, euro area and business.

Growing concerns over the Covid-19 pandemic weigh on markets, the day England lifts its remaining restriction on coronaviruses despite warnings that the move could allow the emergence of new variants.

Stocks fell in Asia-Pacific markets, Japan Nikkei down 1.25% and that of Hong Kong Hang Seng down 1.6% at the end of the session. Rising Delta variant cases threaten to hamper global recovery as restrictions and lockdown restrictions are reintroduced in some Asia-Pacific countries.

Thailand, for example, reported its fourth consecutive day of increased infections today (11,784), as his country struggles to cope with its worst outbreak to date.

And in Australia, a lockdown has been extended in Victoria state as authorities attempt to control an outbreak of the “wildly infectious” variant of the Delta coronavirus.

Concerns about rising inflation – and the possibility of a premature tightening of central bank monetary policy – are also worrying investors, after the US CPI index hit a 13-year high last month and British inflation exceeded the target.

As Reuters Explain


Economists at Bank of America lowered their forecast for economic growth in the United States to 6.5% this year, from 7% previously, but maintained their forecast of 5.5% for next year.

“When it comes to inflation, the bad news is that it will likely stay high in the near term,” they said in a note, highlighting their last reading of their proprietary inflation meter which remains high.

“The good news is… we are probably near the peak, at least for the next few months, as base effects are less favorable and scarcity pressures shift from goods to services. “

Reuters technical news
(@ReutersTech)

Asian stocks extend losses amid new fear of virus and inflation concerns https://t.co/efzZezCNJu pic.twitter.com/N5bqVqmFcC


July 19, 2021

Kyle Rodda from IG says investors are increasingly concerned about economic fundamentals, after a strong recovery driven by ‘extraordinary’ stimulus and optimism about vaccines:


There are clear signals that the markets are feeling a bit disrupted by the global economic outlook. Of course, that doesn’t mean a quick or impending crash is upon us. But that after 6 to 9 months of unbridled optimism, underpinned by extraordinary stimulus and vaccine rollout, the best part of the economic expansion may have already been seen, and the peak of the cycle is predictable and was evaluated -in.

Perhaps this is an attribution error, and possibly due to what may turn out to be temporary factors related to the spread of the Delta variant. Nonetheless, the price signals are there for a slowdown in growth, as market players are currently being forced to think about the question “what next?” “.



European markets are also heading towards a smooth opening, with the FTSE 100 should fall:

IGSquawk
(@IGSquawk)

Large risk aversion movement in European futures contracts#FTSE 6,944 -0.92%#DAX 15,424 -1.31%#CAC 6412 -0.75%#AEX 730 -0.86%#MIB 24,523 -1.09%#IBEX 8388 -1.63%#OMX 2321 -0.98%#STOXX 4001 -1.37%


July 19, 2021

Lifting nearly all remaining legal restrictions in England today could help businesses recover from the turmoil of the past 16 months, although the spike in infections means many customers and businesses remain fearful.

And the Confederation of British Industry, which represents UK business, has warned of crippling staff shortages caused by people being asked to self-isolate by the NHS test and traceability app .

This so-called “pingdemia” threatens to shut down supermarkets and shut down car production lines, they warn.

The CBI said people with a double bite should be able to escape the 10-day quarantine now, while others may return to work after being tested.

CBI President Karan Bilimoria said:


“With the restrictions lifted and cases rising rapidly, we urgently need a safe approach from the government.

“Building and maintaining confidence is essential to ensure economic recovery. Wearing the mask in confined spaces, especially in transportation, will help build staff and customer confidence, as will clarity regarding the future availability of free testing for employees. “

Agenda

  • 9 a.m. BST: construction exit from the euro zone for May
  • 10 a.m. BST: monthly report from the German Bundesbank
  • 11am BST: Speech by Bank of England policymaker Jonathan Haskel on fear of the economy, at the University of Liverpool School of Management
  • 3 p.m. BST: US real estate market index NAHB





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