Week in review

• U.S. housing starts increase 6.3% in June
• ECB keeps policy rate unchanged at 0.0%
• Japan national CPI rose 0.2% y/y in June

Week ahead

• South Korea GDP
• Australia 2Q CPI inflation
• U.S. 2Q 2021 real GDP growth and Fed Funds rate

Thought of the week

The flare-up of COVID-19 cases was once again in the spotlight last week. In Asia for example, Indonesia’s daily case count has surpassed India, South Korea reported record infections, and Japan saw a surge in cases right before the Tokyo Olympics gets underway. The recent surge can be attributed to the low vaccination rates in most of the affected economies, as well as the sudden dominance of the highly contagious Delta variant. The U.S. and Europe have mostly been able to avoid going back to lockdowns as their higher vaccination rates have reduced hospitalization rates, but the vaccination lag in Asia has forced economies such as Australia, Japan and Indonesia to impose mobility restrictions. This highlights the impact of vaccination rates on the pace of economic recovery globally. In the near term, the market concerns over this recent wave are justified. Ideally, this recent wave will prompt vaccination rates to pick up in Asian economies, supporting a more sustained recovery.

Daily increase in cases

7-day moving average, per million people

Source: Johns Hopkins University, World Bank – World Development Indicators, J.P. Morgan Asset Management. Population numbers are based on World Bank data as of 31/12/19. Data reflect most recently available as of 23/07/21.

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