The economic calendar today is quite busy with important events and releases.
First off, China published its June inflation rate reports. Both yearly and monthly inflation missed the targets and came in worse than the previous month. The PPI was also slightly lower but at least it managed to meet the forecast.
The United Kingdom published a flood of reports on GDP and production. The May GDP and the 3-month average through May were both worse than investors expected. Construction output, industrial and manufacturing production also failed to meet the desired levels. Overall, every report released by the UK today was a major disappointment, even though the markets have high hopes for the country which is about to end all lockdowns in ten days.
Canada will deliver some important data later in the day. In particular, it will publish its employment change and unemployment rate reports for June.
Today the dominant sentiment among investors is likely to be more safe-haven friendly. Disappointing economic reports and the rise of the Delta variant of the coronavirus are prompting more pessimism among market participants.
The US dollar and the Japanese yen might be among the few assets to benefit from the current situation.
Adding to this pessimism is Pfizer, the maker of one of the most successful coronavirus vaccines. Pfizer shared that it now believes the immunity offered by its vaccine weakens after about six months and that a booster shot might be necessary. It is also working on a new version of the vaccine, which will have to undergo clinical trials and a months’ long approval process from scratch but may offer greater protections against the new variants of Covid-19.
Case in point, Australia, one of the few Covid-19 success stories, is now beginning to see another wave of infections with the Delta variant and is going to be in lockdown for another three weeks as it struggles to contain the virus. Israel, which has one of the highest vaccination rates in the world, is also seeing a resurgence of Covid-19 infections.
