Daily Commentary BY THE CURVE TEAM –

Focus Shifts to Easing of Restrictions

27th of April, 2020

In arguably the most quiet weekend we’ve had for several months, the community focus on Covid-19 has shifted to the easing of restrictions.

For several months now, weekends have been the height of the Covid-19 news cycles with new measures and updates given on the impacts from the virus on both the health and economic fronts. With the number of new cases low, the focus has shifted to how restrictions might be eased and what the new normal might look like.

The major unknown remaining for the public is how far restrictions can be eased and when that can safely occur. It is not unlikely that the ways in which we previously did certain activities will never fully return as people and business use more health conscious methods.

A reason for that big unknown hanging over the outlook is due the fact the large economic data releases we are seeing are still only showing some of the impact from the virus. The Q1 update for CPI due out Wednesday is expected by the market to show a slight increase or flat reading but all these have to viewed with an understanding of the sample period. In this case the Q1 reading included data for January to March with tough lockdown measures only really effecting the last few weeks of that period.

Similarly, with earnings season in the US arriving this week it will be curious to see how large the impact has been for businesses. Whilst there is little doubt the effect currently is large the size of that impact given the larger time horizon is still unknown.

Matthew Dunshea

Client Relationship Manger