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Our briefing for Monday, February 7, 2022:
Feb 7, 2022 3:53:44 PM
- In the United States, data from Johns Hopkins University shows the country surpassed 900,000 on the cumulative death toll, fuelled by the Omicron wave. Though the number of deaths appears to now be levelling off, the grim milestone comes less than two months after the country surpassed 800,000 fatalities. According to a Reuters’ analysis, the total number of deaths as of Friday was 904,228, which is more than the entire population of South Dakota. The United States has the highest number of Covid-19 related deaths of any nation, followed by Russia, Brazil and India. According to the Centers for Disease Control and Prevention, about 212 million people, or 64% of Americans are fully vaccinated.
- In Canada, the mayor of Ottawa has declared a state of emergency, in response to over a week of protests against Covid-19 measures taking place downtown near Parliament Hill. The protests began with groups of truckers who were angry over U.S. – Canada border vaccine mandates, but they have since evolved into larger movements against broader public health measures and Prime Minister Justin Trudeau’s government. Protesters first reached the capital on January 29 and have parked their trucks on city streets and put up tents, fully occupying the downtown core. Ottawa Mayor Jim Watson said he was concerned that the demonstrators outnumbered police and seemed to be in control of the situation.
- In the United Kingdom, a plan detailing how to tackle the National Health Service (NHS) backlog was due to be released today, but it has been put on hold. Health Secretary Sajid Javid denied reports that the Treasury had blocked the plan, instead blaming Omicron for the delay. The Daily Telegraph recently reported that the Treasury had refused to sign off, but Javid said this wasn’t the case, explaining that the government had to shift their focus to the booster program with the emergence of the new variant. Javid says the plan to tackle the NHS backlog will be published shortly, but warned that “waiting lists will continue to grow” and that it is “hard to say” when things will improve.
- Spain will remove a requirement for people to wear masks outdoors this week as it begins to roll back more Covid-19 restrictions. Health Minister Carolina Darias says the cabinet plans to approve the end to mandatory outdoor mask wearing at Tuesday’s cabinet meeting, and it will become effective two days later. "We said it would last only while it was strictly necessary," Darias said. “As contagion rates and other indicators have fallen for several days, the government considers the Covid-19 situation to have eased.” As of February 1, travellers who arrive in Spain must have had their booster doses for their vaccine certificates to be considered valid, joining countries like France and Italy.
- South Korea will no longer use GPS monitoring to enforce quarantines and will also end daily check-ups to low-risk coronavirus patients, as it struggles with the intensity of the Omicron wave. The high transmissibility of the new variant has made it difficult to maintain control over the country’s pandemic response, Jeong Eun-kyeong, the country's top infectious disease expert, said Monday. The country extended social distancing rules for two weeks on Friday, including a 9 PM curfew for restaurants, bars and gyms. New daily cases have tripled over the past two weeks, but the number of deaths has remained relatively low thanks to high vaccination rates.
- Australia will reopen its borders to fully vaccinated travellers from February 21, the government announced. Australia enacted some of the world’s toughest border measures in March 2020 when the pandemic first hit. Last November, some rules were relaxed to allow international students and skilled migrants to enter. Now, international tourists will be welcomed back, but they must be fully vaccinated, Prime Minister Scott Morrison has stressed. "Events earlier in the year should have sent a very clear message, I think, to everyone around the world that that is the requirement to enter into Australia," Morrison said, referring to the recent deportation of unvaccinated Serbian tennis star Novak Djokovic.
Covid-19 – Due Diligence And Asset Management
BMO starts bringing back investment, corporate bankers to the office
Brief: Bank of Montreal has started bringing investment and corporate bankers back to their offices this week, and is seeking to have staff fully returned on a hybrid basis by early April. Bankers began their return on Feb. 7, and workers on all teams will spend two to three days a week in the office as of April 4, Alan Tannenbaum, head of global investment and corporate banking, said in a memo to staffers last week. Employees who aren’t vaccinated will have to continue working from home, according to the memo.Bank of Montreal’s plans mark one of the first moves by Canada’s banks to start refilling offices after the omicron variant caused a wave of infections that prompted governments to tighten restrictions and recommend companies let employees work remotely.
Junk bond flows dropped by most since early days of pandemic
Brief: Investors pulled the most money last week from a popular high-yield bond fund since the coronavirus crisis first landed in the U.S. The SPDR Bloomberg High Yield Bond ETF JNK, -0.10% saw outflows of $717 million last week, according to FactSet Research. That’s the most since March 2020, according to Bloomberg News. Some investors have been encouraged by the resilience of credit during the stock-market turbulence of 2021. This year, the high-yield fund has slipped 3%, which is less than the 6% drop for the S&P 500 SPX, 0.01%. Investors like corporate bonds as an alternative when the economy slows but doesn’t fall into a recession. While equities suffer as growth prospects slump, companies are likely to continue to meet their debt obligations as long as the economy is growing.
Geopolitical Risks Amid a Global Pandemic
Brief: 2022 is starting with several issues that could create serious volatility for traders in the months ahead. Aside from the supply chain problems and other economic disruptions caused by the pandemic, tensions triggered in the Indo-Pacific and Eastern Europe have added to growing uncertainty. The commodity markets are poised for potential price adjustments from the ancillary effects of these tensions. The situation in the Indo-Pacific is a slowly developing story between China and Taiwan. With Taiwan one of the largest producers of semiconductors, any disruptions could produce shortages and serious supply chain issues for everyone using semiconductor chips. The Forex markets might also be a good proxy for these developing events. Moves in the yuan and yen could foretell possible problems. The Ukrainian situation is a bit different in that there are two main markets which could be directly affected: grains and energy.
How Working From Home Will Permanently Change the Way We Travel
Brief: It was the first glimmer of hope for the beleaguered travel industry in 2020 when locked-down citizens started doing something new amid the pandemic: not working from home, but working from anywhere. Off they’d go for weeks or months at a time, to any locale with good surf and better Wi-Fi, to show off a new Zoom background after early morning swims. Today the era of decamping from your hometown might seem as far in the rearview mirror as a five-day, in-person workweek might appear on the horizon. But a new version of the trend is emerging—and it could prove a serious boon for the travel industry. The ability to work from home is profoundly, and permanently, changing the way we travel. More lenient office policies mean many workers can travel anytime, even during busy workweeks, as long as they can hit deadlines from far afield.
Biden sees US economy as powering past the pandemic
Brief: That bleak jobs report the White House had been bracing for never arrived Friday. Instead, President Joe Biden got the pleasant surprise that the U.S. economy had powered through the omicron wave of the coronavirus and posted 467,000 new jobs in January — along with strong revisions to job gains in the two prior months. It showed just how much the pandemic's grip on the economy has faded, though the nation is still grappling with high inflation. “Our country is taking everything that COVID has to throw at us, and we’ve come back stronger," Biden declared at the White House. The jobs report suggested the United States has entered a new phase in its recovery from the pandemic. And it capped something of a comeback week for the president. Also on Friday, the House passed a bill to jumpstart computer chip production and development, a key step for reconciling differences with an earlier measure approved by the Senate.
