Recovery is ongoing with short-term economic dynamics stronger in Europe compared to the US. GDP: disappointing April in France and May in the UK but stronger than expected recovery in Q2 in China. Political tail risk lower in Eurozone after EU debt issuance deal but US-China geopolitical tensions increasing.
Chart of the month
The COVID-19 pandemic seems out of control in the US. As the virus spread to previously less affected regions, infections reached new record highs in July. However, hospitalisations and deaths due to COVID19, even when accounting for a certain lag, remain lower than the surge in cases would suggest. Potential explanations are more testing, more cases among younger people, more efficient treatment of patients and higher hospital capacities. With a few local exceptions, the US health care system is not overwhelmed. In combination with the recent stabilisation of daily new cases, the appetite for renewed containment measures is very limited, especially in the more conservative Southern and Midwestern states.