Daily Commentary BY THE CURVE TEAM –

Challenge Before Christmas

21st of November, 2020

The growing Covid cluster in NSW will pose challenges in the lead up to Christmas.

Thirty new cases were recorded yesterday with more new cases expected today. The Northern beaches have already had a hard lockdown imposed on them, with fears this may be extended to more parts of Sydney.

States have closed their borders to the Greater Sydney area. With Christmas and the New Year period typically a time where people travel the risk of Covid spreading is higher than usual.

It is a blow to the economy, as people are less able to spend in NSW and domestic tourism spending will be hit. Retail sales for November will be released tomorrow, which will not account for these recent updates.

The crippling impact on the economy from the virus continues to be seen overseas. The UK has tightened lockdowns heading into Christmas despite expectations that there would be looser restrictions.

Europe have restricted flights from the UK. A mutant stain of the virus, which is 70% more infectious than the original strain, is causing concern in the region.

Credit growth for November will also be released on Thursday.

Josh Stewart

Associate - Money Markets