Global daily Coronavirus cases are rising again after weeks of stabilisation, driven by emerging markets. Total fatalities are still significantly below those of developed markets, but this gap is shrinking rapidly in Brazil which is becoming the new epicentre of the disease.
Western countries easing their lockdowns appear to be in a more vulnerable position than Asian peers in terms of the level and decline of daily deaths.
Worries over the widening US-China dispute disrupted the equity rally late last week as China reportedly launched plans to impose national security legislation in Hong Kong, threatening to reignite tensions with the US and risking the semi-autonomous city’s status as a global financial hub.
The implication of the proposed legislation is to formalise and expand the presence of mainland security and intelligence services. Similar legislation was proposed in 2003 and was met with significant local resistance, leading to its ultimate withdrawal.
In the UK, the 12-month inflation rate almost halved in one month, falling from 1.5 per cent in March to 0.8 per cent in April, while the number of people claiming unemployment benefit rose by 850,000 to 2.1 million between 12 March and 9 April. UK retail sales in April were unsurprisingly weak falling by a record 18.1 per cent in April.
The UK also sold negative yielding gilts for the first time while the bank of England governor; Andrew Bailey explicitly told the Treasury Select Committee that negative interest rates were under review.
With the recent bailouts UK government borrowing hit £62.1bn in April, its highest level on record and £51.1bn more than in April 2019.