Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

France Considers National Lockdown

By MarketPulse (Jeffrey Halley)ForexOct 28, 2020 04:34AM ET
www.investing.com/analysis/france-considers-national-lockdown-200542637
France Considers National Lockdown
By MarketPulse (Jeffrey Halley)   |  Oct 28, 2020 04:34AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Speculation is mounting in France that the government is considering going all in and announcing a new one-month national lockdown to combat exploding numbers of Covid-19 cases.

Previously, it had been thought that localised lockdowns, and extended curfews, would be France’s most likely course, a similar path taken by Italy, Spain and Belgium. President Macron will address the nation this evening and reveal the government’s decision.

If true, it would be very bad news for the European recovery, and for France itself, Europe’s second-largest economy (stripping out the UK). The euro will almost certainly come under more pressure, already on the back foot as investors reduce pre-US-election risk.

The chill winds would be felt in European equities as well. The fall-out is unlikely to be confined to just Europe. I have stated before that double-dip lockdowns in advanced economies was a primary threat to the global recovery, torpedoing demand upon which the recovery in many developing markets is founded.

China alone will not be able to carry a sustained global recovery; the world needs at least the United States or Europe functioning as well. France is but one country, but if Europe’s second-largest economy goes down this route, it will be a precedent that other governments in Europe, struggling with a second wave, will feel more comfortable following.

The consequences for European business and government finances will be dire, of course. Getting the national populations to follow it, given the lack of social discipline -and its consequences- displayed after the initial lockdowns ended, will be challenging indeed.

With the US elections less than a week away, the chances of a US stimulus deal pre-election now just above zero, and next-level confinements in Europe looming, the “blue wave” environment is getting cloudier. Despite a plethora of FAANGs releasing earnings tomorrow, it is hard to see this as an environment where equity markets will prosper. We still expect a retreat by asset market bulls as November 3rd inches closer. That should also see strength in the US dollar and havens such as the yen and Swiss franc.

Malaysia’s Balance of Trade exploded higher to MYR 22 bio, boosted by a 13.60% jump in exports. Malaysian markets are unlikely to gain much solace, though, as imports fell, reflecting a domestic economy in recession. Malaysia must also contend with political risk ahead of next week’s sitting of parliament, and surging Covid-19 infections with regional restrictions back in place.

The offshore and onshore Chinese yuan rates converged this morning after the PBOC tinkered with its daily USD/CNY fixing mechanism. The PBOC is allegedly asking rate submission banks for the fixing to suspend counter-cyclical factors (CCF) from submissions.

With the yuan in a strengthening trend, that has the effect of weakening it slightly. It is not a back-door mechanism to weaken the yuan generally, I believe. It would work both ways if the yuan were in a bearish trend. I suspect the PBOC has initiated another baby step in internationalising the yuan.

Original Post

France Considers National Lockdown
 

Related Articles

Kenny Fisher
Will RBA Hike Boost The Aussie? By Kenny Fisher - Jul 04, 2022 1

We are seeing plenty of volatility from the Australian dollar. AUD/USD is trading at 0.6883 in European trade, up 0.98% on the day. The Australian dollar has recovered most of its...

France Considers National Lockdown

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email