Europe COVID-19 Tracker Free to View Economics - Europe
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23 June 2021 Europe COVID-19 tracker Free to View Economics - Europe Falling cases, rising prices While headline case numbers are still falling on the continent, the Chris Hare Senior Economist Delta variant is on the rise… HSBC Bank plc …which could risk reopening delays but is unlikely to scupper the recovery, given vaccines and business confidence Supply-demand imbalances could be lifting inflation but, in the eurozone at least, most pressures should prove temporary Delta dominance COVID-19 case numbers continue to fall across most of the continent (Chart 1), as does intensive care occupancy (Chart 2), while the vaccine rollout continues at a rapid pace (Chart 3). And countries are continuing along their reopening roadmaps. In Germany, case levels are now low enough to allow for the resumption of indoor restaurant dining, nightclubs in Catalonia reopened on 21 June (albeit with a 3.30am curfew) and from 28 June, outdoor mask wearing will no longer be required in Italy. There are rising concerns, however, about the spread of the Delta variant. It may now account for almost all new cases in the UK and Portugal and around a quarter in Italy (Chart 5). The European Centre for Disease Control has estimated that the variant will account for 90% of European cases by the end of August (AFP, 23 June). The big question is whether this risks plans for further reopening. The UK, where cases are rising sharply, is a litmus test. While hospitalisations remain low (Chart 7), the spread of the variant was enough to delay a further easing from 21 June to 19 July in England. The vaccine rollout in the Big 4 is less advanced than when the Delta variant became dominant in the UK (Chart 9), so reopening delays could follow elsewhere. Another concern is that vaccine programmes may be running into pockets of hesitancy – reports from France suggest that appointments are getting harder to fill (LCI, 23 June), while take-up among some ethnic minority groups in the UK is low (Chart 10). Supply-demand imbalances = higher inflation? The Delta variant does not, however, appear to be concerning businesses. The eurozone PMI hit a 15-year high in June, while the UK index only edged down slightly (Chart 16). So any short reopening delays may not scupper the recovery. Perhaps the most striking developments in the June PMIs relate to prices. The output price indices rose to record highs in the eurozone and in the UK, although not to even higher US levels (Chart 17). We think much of this is a result of temporary supply-demand imbalances where a spending recovery is running up against a supply side which is constrained by input shortages and capacity limits. However, labour demand also looks strong, which might point to more persistent price pressures (Chart 19). These developments are consistent with recent upgrades we have made to our inflation forecasts (Chart 21). Last week, we revised up our 2022 inflation forecast for the UK and the eurozone by 0.2ppts to 2.2% and 1.5%, respectively. However, particularly in the eurozone, we still think most of the price pressures highlighted in the surveys will prove temporary, keeping medium-term inflation well below the ECB’s ‘below, but close to’ 2% inflation aim. This is an abridged version of a report by the same title published on 23-Jun-21. Please contact your HSBC representative or email [email protected] for more information. Disclosures & Disclaimer Issuer of report: HSBC Bank plc This report must be read with the disclosures and the analyst certifications in the Disclosure appendix, and with the Disclaimer, which forms part of it. View HSBC Global Research at: https://www.research.hsbc.com Free to View ● Economics - Europe 23 June 2021 A more mixed but still broadly positive picture on infections 1. While COVID-19 cases are up in the UK, they are falling on the continent… COVID-19 cases* in the eurozone big 4 and UK 160000 160000 120000 120000 80000 80000 40000 40000 0 0 Jan Mar May Jul Sep Nov Jan Mar May Jul Germany France Italy Spain UK Source: Refinitiv Datastream, HSBC. Notes: *7-day moving average. 2. …so is intensive care occupancy… 3. …while the vaccine rollout remains rapid Total COVID-19 related ICU patients Total Per mn Daily COVID-19 v accine doses Per mn 8000 8000 12000 12000 10000 10000 6000 6000 8000 8000 4000 4000 6000 6000 4000 4000 2000 2000 2000 2000 0 0 0 0 Dec-20 Feb-21 Apr-21 Jun-21 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Germany France Italy Germany France Italy UK* Spain UK US Source: Macrobond, HSBC. Note: *Medically ventilated Source: Our World in Data, HSBC 4. Cases are up in the UK and Portugal, where the Delta variant has become dominant 7dma Daily COVID-19 cases per 100k of population 7dma 16 16 12 12 8 8 4 4 0 0 UK Italy Spain Ireland France Greece Norway Belgium Sweden Portugal Germany Switzerland Netherlands 7-day to 15-June 7-day to 22-June Source: Refinitiv Datastream, Our World in Data, HSBC. Note: Weekend numbers are reported as 0, so “7-days to” does not include Saturday and Sunday. We acknowledge the assistance of Emily Wagenmann and Yash Dewan, HSBC Bank plc, in the preparation of this report. 2 Free to View ● Economics - Europe 23 June 2021 The vaccination campaign keeps rolling in the EU 5. The Delta variant is dominant in the UK and 6. …but limited sequencing makes Portugal, and significant in Italy… estimates of variant incidence uncertain % Modelled estimates of the Delta v ariant's share of all % % Proportion of cases sequenced and shared % sequenced cases w ith GISAID in last 30 day s 100 100 30 30 80 80 25 25 20 20 60 60 15 15 40 40 10 10 20 20 5 5 0 0 0 0 UK UK Italy Italy Spain Spain France France Portgual Portgual Germany Germany Source: FT estimates based on GISAID data, CCAES. Source: GISAID, HSBC 7. The Delta variant has lifted cases in the 8. …while the pick-up in cases has mostly UK, but hospitalisations remain low… been among less widely vaccinated groups 000s UK: New COVID-19 cases and 000s % of peak England: COVID-19 cases by age % of peak hospital admissions 60 60 100 100 50 50 80 80 Thousands 40 40 60 60 30 30 40 40 20 20 10 10 20 20 0 0 0 0 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-20 Dec-20 Mar-21 Jun-21 New cases* Weekly hospital admissions < 20 20-65 65+ Source: Our World in Data, HSBC Source: The Spectator, UK.Gov, HSBC 9. The vaccine rollout on the continent is 10. There may be pockets of vaccine less advanced than when Delta took hold in hesitancy among some ethnicities the UK Per 100 pop. Total COVID-19 v accinations Per 100 pop. % Percentage of ov er 50s vaccinated by ethnicity % 120 120 100 100 100 Delta becomes dominant 100 v ariant in the UK 80 80 80 80 60 60 60 60 40 40 40 40 20 20 20 20 0 0 Dec-20 Feb-21 Apr-21 Jun-21 0 0 Germany France Italy Dec-20 Feb-21 Apr-21 Jun-21 Spain Portugal UK Black South Asian White All US Source: Our World in Data, HSBC Source: The Spectator, NHS, OpenSAFELY, HSBC 3 Free to View ● Economics - Europe 23 June 2021 A substantial vaccine rollout is under way 11. In the long run, vaccine supply is not an issue for Europe ________________________________________________ EC _________________________________________________ Organisation Dose Type of vaccine Reported effectiveness* AstraZeneca/Oxford University Up to 400m Adenovirus 70.4% BioNTech/Pfizer Up to 604m + 1.8bn** mRNA 95% CureVac Up to 405m mRNA TBD GSK/Sanofi Up to 300m Protein adjuvant TBD Janssen/JNJ Up to 400m Adenovirus 66% Moderna Up to 460m mRNA 95.6% _____________________________________________ Germany ______________________________________________ Organisation Dose Type of vaccine Reported effectiveness* AstraZeneca/Oxford University 56m Adenovirus 70.4% BioNTech/Pfizer 30m + 64m from EC = 94m mRNA 95% CureVac 20m + 54m from EC mRNA - GSK/Sanofi 55m Protein adjuvant TBD Janssen/JNJ 37m Adenovirus 66% Moderna 50m mRNA 95.6% ______________________________________________ France _______________________________________________ Organisation Dose Type of vaccine Reported effectiveness* AstraZeneca/Oxford University Up to 60m from EC Adenovirus 70.4% BioNTech/Pfizer Up to 91m from EC mRNA 95% Moderna Up to 69m from EC mRNA 95.6% CureVac Up to 45m from EC mRNA TBD GSK/Sanofi Up to 24m from EC Protein adjuvant TBD Janssen/JNJ Up to 35m from EC Adenovirus 66% _______________________________________________ Italy ________________________________________________ Organisation Dose Type of vaccine Reported effectiveness* AstraZeneca/Oxford University 16m from EC Adenovirus 70.4% BioNTech/Pfizer 40.5m from EC mRNA 95% Various providers 70m - - _______________________________________________Spain ________________________________________________ Organisation Dose Type of vaccine Reported effectiveness* AstraZeneca/Oxford University 31.5m from EC Adenovirus 70.4% BioNTech/Pfizer 20m + 94m** from EC mRNA 95% Janssen/JNJ 20m Adenovirus 66% ________________________________________________ UK _________________________________________________ Organisation Dose Type of vaccine Reported effectiveness* AstraZeneca/Oxford University 100m Adenovirus 70.4% BioNTech/Pfizer 100m mRNA 95% GSK/Sanofi 60m Protein adjuvant TBD Janssen/JNJ 30m Adenovirus 66% Moderna 17m mRNA 95.6% Novavax 60m Protein adjuvant 89% Valneva 60m Inactivated whole virus TBD Source: AstraZeneca, BioNTech, CureVac, GSK, Janssen, Moderna, Novavax, IDT Biologika, Valneva, HSBC. Note: *Maximum reported. **Between end-2021 and 2023 4 Free to View ● Economics - Europe 23 June 2021 Back on the move 12. Restrictions are being eased but remain higher than in the US Index Gov ernment Response Stringency Score Index 100 100 80 80 60 60 40 40 20 20 0 0 Jan-20 Mar-20 May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 May-21 Jul-21 Germany France Italy Spain UK Norway Sweden US Source: Oxford COVID-19 Government response Tracker, HSBC.