© Reuters. People wait in front of a vaccination bus during the coronavirus disease (COVID-19) outbreak as Austria’s government has imposed a lockdown on people who are not fully vaccinated, in Vienna, Austria, November 18, 2021. REUTERS/Leonhard Foeger
By Francois Murphy and Paul Carrel
VIENNA/BERLIN (Reuters) – Austria will become the first country in western Europe to reimpose a full COVID-19 lockdown, it said on Friday as neighbouring Germany warned it may follow suit, sending shivers through financial markets worried about the economic fallout.
A fourth wave of infections has plunged Germany, Europe’s largest economy, into a national emergency, Health Minister Jens Spahn said. He urged people to reduce their social contacts, warning that vaccinations alone would not reduce case numbers.
Austria said it would require the whole population https://www.reutersconnect.com/all?id=tag%3Areuters.com%2C2021%3Anewsml_WDF49L4QV%3A4&search=all%3Ahealth-coronavirus%2FAUSTRIA to be vaccinated as of February.
Roughly two-thirds of Austria’s population is fully vaccinated against COVID-19, one of the lowest rates in western Europe. Its infections are among the highest on the continent, with a seven-day incidence of 991 per 100,000 people.
“We have not succeeded in convincing enough people to get vaccinated,” Chancellor Alexander Schallenberg told a news conference, saying the lockdown would start on Monday and the requirement to be vaccinated on Feb. 1.
“It hurts that such measures still have to be taken.”
Asked if Germany could rule out an Austrian-style full lockdown, Spahn said: “We are now in a situation – even if this produces a news alert – where we can’t rule anything out.
“We are in a national emergency,” he told a news conference.
European stocks retreated from record highs, while government bond yields, oil prices and the euro tumbled as the spectre of a fresh COVID-linked lockdown in Germany and other parts of Europe cast a fresh shadow over the global economy.
As cases rises again across Europe, a number of governments have started to reimpose limits on activity, ranging from Austria’s full lockdown, to a partial lockdown in the Netherlands, to restrictions on the unvaccinated in parts of Germany, the Czech Republic and Slovakia.
Hungary reported 11,289 new COVID-19 cases on Friday, its highest daily tally, and will make booster shots mandatory for all healthcare workers and require mask wearing in most indoor places from Saturday.
While the new measures across Europe are not seen hitting the economy as much as the all-out lockdowns of last year, analysts say they could weigh on the recovery in the last quarter of the year, especially if they hit the retail and hospitality sectors.
A full lockdown in Germany would be more serious, however.
“A total lockdown for Germany would be extremely bad news for the economic recovery,” said Ludovic Colin, a senior portfolio manager at Swiss asset manager Vontobel.
“It’s exactly what we saw in July, August of this year in parts of the world where the delta (variant) was big, it (COVID-19) came back and it slows down the recovery again,” he added.
CHRISTMAS IN QUESTION
The pressure on intensive care units in Germany had not yet reached its peak, Spahn said, urging people to reduce contacts to help break the wave.
“How Christmas will turn out, I dare not say. I can only say it’s up to us,” he added.
Chancellor Angela Merkel said on Thursday https://www.reuters.com/world/europe/german-region-hardest-hit-by-covid-surge-plans-partial-lockdown-report-2021-11-18 Germany will limit large parts of public life in areas where hospitals are becoming dangerously full of COVID-19 patients to those who have either been vaccinated or have recovered from the illness.
Merkel said on Thursday the federal government would consider a request from regions for legislation allowing them to require that care and hospital workers be vaccinated.
Saxony, the region hardest hit by Germany’s fourth wave, is considering shutting theatres, concert halls and soccer stadiums, Bild newspaper reported. The eastern state has Germany’s lowest vaccination rate.
New daily infections have risen 14-fold in the past month in Saxony, a stronghold of the far-right Alternative for Germany (AfD) party, which harbours many vaccine sceptics and anti-lockdown protesters.
Much of the Austrian public is also sceptical about vaccines, a view encouraged by the far-right Freedom Party, the third-biggest in parliament. It is planning a protest against coronavirus restrictions on Saturday.
U.S. stock market indices are down 1-2%
U.S. stock market indices declined yesterday on growing fears of a recession in the U.S. economy, with the S&P 500 index falling for the fourth consecutive time.
U.S. stock indices list – what’s happening right now?
Inflation will drain Americans’ financial reserves and could lead to a recession sometime in the middle of next year, according to the head of JPMorgan Chase & Co (NYSE:JPM). Jamie Dimon. His Goldman Sachs Group (NYSE:GS) colleague David Solomon also expects a recession in the coming months, and he believes markets are in for a turbulent period. The situation also affected T-Bond Futures.
Meanwhile, the U.S. Commerce Department said Tuesday that the country’s trade deficit widened 5.5 percent to $78.2 billion in October, the highest in four months but below analysts’ expectations of $80 billion.
Previously published positive data on business activity in the service sector and the number of new jobs in the U.S. economy have led investors to doubt that the Federal Reserve is willing to slow the pace of key interest rate increases, writes Trading Economics.
“The market got off to a nervous start this week as strong U.S. statistics hit investors’ hopes that the Fed would soften its stance in the coming months,” wrote SPI Asset Management managing partner Stephen Innes. “Ultimately, it’s more important exactly where the Fed stops, not how quickly they get to it. A stronger-than-expected labor market and positive business sentiment make it more likely that the rate will exceed 5%,” he added.
Market participants also watched for corporate news. The Dow Jones Industrial Average fell 350.76 points (1.03%) to 33596.34.
Earlier, we reported that European stock indicators on December 7 showed a contradictory mood.
Current European stock market shows a contradictory mood
European stock indexes today do not show unified dynamics during trades. Composite index of the largest companies in the region, Stoxx Europe 600, decreased by 0.29% to 437.66 points.
Current European stock market – current situation
Germany’s DAX stock index was down 0.25%. France’s CAC 40 was down 0.09% and Spain’s IBEX 35 was down 0.06%. The British FTSE 100 rose 0.16%, the Italian FTSE MIB – 0.13%.
Investors are increasingly concerned about the negative impact of tightening financial conditions on economic growth in the region and the profits of companies, writes Trading Economics. The situation was also reflected in the Euro Fx Futures.
Market participants are waiting for meetings of several major central banks next week and are assessing statements by representatives of the European Central Bank (ECB).
Inflation in the eurozone is close to a peak, ECB Chief Economist Philip Lane said the day before.
“It is too early to conclude that inflation has peaked, but I can say with confidence that we are close to peaking,” Lane told Italian newspaper Milano Finanza.
The ECB raised all three key interest rates by 75 bps in October. The benchmark interest rate on loans was raised to 2%; the rate on deposits – to 1.5%; the rate on margin loans – to 2.25%. Since July this year, the ECB has raised key rates by 200 bp.
Experts expect the lending rate to rise to at least 2% from 1.5% in December.
Meanwhile, data from Germany’s Federal Statistical Office (Destatis) released Wednesday showed that industrial production in Germany fell by 0.1% in October compared to the previous month. Analysts polled by Trading Economics had on average expected a larger decline of 0.6%.
Earlier we reported that data on a decline in Chinese exports dropped Asia’s stock market.
Asian stock market news: Data on decline in Chinese exports caused Asia’s stock market to plummet
Asian stock market news: Asian stock indices fell in today’s trading after data showed a decline in Chinese exports.
China’s exports fell 8.7 percent year on year in November to $296.1 billion, official data showed. The index fell for the second month in a row (in October it dropped by 0.3%), and the rate of its decline was the highest since February 2020. Experts attribute this reduction mainly to a drop in demand in the world amid a slowdown in the global economy. Even EURODOLLAR futures were affected by the situation.
Asian stock market today – what’s happening right now?
Imports fell 10.6% year-on-year last month to $226.2 billion, after declining by 0.7% a month earlier. China’s foreign trade surplus narrowed to its lowest since April, $69.84 billion in November, down from $85.15 billion a month earlier and $71.7 billion a year earlier.
Meanwhile, investors welcomed the news of further easing of coronavirus restrictions in China. Now, entire neighborhoods and blocks will not be closed for lockdowns, as they used to be, but only residential floors and buildings. Also, people who test positive for COVID-19 will be able to self-isolate at home rather than in overcrowded hospitals. Also, schools that have not had outbreaks will have to return to the face-to-face format.
Japan’s Nikkei 225 stock index was down 0.7%. Australia’s S&P/ASX 200 index was down 0.9%. Australia’s GDP rose 0.6% in Q3 from the previous quarter, according to the country’s Bureau of Statistics. Analysts on average had expected the Australian economy to grow by 0.7% in July-September, Trading Economics wrote.
The country’s GDP grew by 0.9% in the 2nd quarter. Thus, the Australian economy has shown an upturn for the fourth consecutive quarter. but the rate of increase was the weakest in that period amid weak growth in consumer spending due to high inflation and higher interest rates. On an annualized basis, GDP rose 5.9% in Q3 after climbing 3.4% in Q2 and compared to the 6.2% expected by analysts.
Earlier, we reported that European stock markets mostly closed lower on December 5.
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