How six countries are faring after easing covid-19 rules
The lay of the land in the post (?) covid world
Markets have been acting like covid-19 is over for the past year but the price action this month suggests some second thoughts. As one person put it, "the basketball game looked over but covid hit a miracle 3-pointer at the buzzer to send it to overtime."
A BBC look at six countries who eased restrictions illustrates the challenge.
1) Israel began lifting restrictions back in February and 56% of the country is fully vaccinated but in mid-June after the country was fully reopened trouble began to start. The delta variant led to climbing new cases, which hit 1118 on Friday. The country has reinstated mask mandates and introduced harsher visitor quarantines. The latest talk is that vaccine passports may be reintroduced.
2) Netherlands - the picture tells the story after restrictions were lifted at the end of June. There is a bit of good news in the past week with cases appearing to plateau, but only after curbs were reintroduced.
3) South Korea - This was the poster-child for how to handle the virus in an open democracy but after some relaxation in curbs in mid-June, it's now facing its worst outbreak yet with around 1500 daily cases.
4) Australia - Cracks continue to form in the Australian dam. Victoria has entered its fifth lockdown and the effort to completely suppress the virus is beginning to look futile. The problem is that Australia's success with low cases has spawned vaccine hesitancy. With AUD/USD at the lowest since December, the market has certainly noticed.
Cases are ticking up everywhere, particularly in areas with the least amount of vaccines administered. One spot that's telling might be San Francisco. It's the most-vaccinated city in the country but cases are rising there all the same and public health officials on Friday recommended masks in all indoor public places.
6) Sweden - This continues to offer an interesting counter-point. Cases have remained low despite re-opening and the delta variant is responsible for 60% of cases. It will be a spot to watch with first dose vaccinations above 70% and second doses at 45% and rising quickly.
Hospitals: The good news in all these places is that serious cases remain low. To be clear, they're rising but they're at low and completely manageable. That needs to be monitored but so far, the vaccines appear to be doing a great job of protecting the vulnerable.
I continue to believe that the ongoing trade in markets is more about growth/value trades being reoriented in a low-conviction market but I'm open to the idea that it's covid -- something I wrote about on Friday. I think now is a good time to keep a close eye on the virus and variants, particularly these countries. Early trading this week is slightly tilted towards risk aversion once again.