The Day at a Glance | June 11 2020

Fears of a second wave of infections in the US rise

The number of COVID-19 cases in the US reached two million and an acceleration regarding new cases in states like Texas, California and Florida have sparked fears of a second wave of the virus. The outbreaks are isolated, distanced and still small, but reaffirm how difficult it can be to completely control a virus at a global level without treatment or a vaccine. Yesterday, Texas announced the highest increase in daily cases since the pandemic started, Florida confirmed its worst week and California recorded the highest number of hospitalizations in the last 10 days. spread of the virus in the rest of the country is still slowing down and it isn`t clear there is a link between the recent outbreaks and states reopening or the protests in recent weeks. However, it`s feared that clusters of people and massive protests in the US in recent days, along with people returning to workplaces may facilitate a more aggressive wave. Some members of the National Guard that helped control protests in the US have tested positive for COVID-19. Yesterday, the FED announced that it expects the virus to have a severe impact on the economy, with a -6.5% contraction in 2020. This has led them to announce that they will maintain interest rates close to zero until at least 2022 and the agency`s Chairman, Jerome Powell, reiterated that the recovery will be slow and that the economy`s risks are still subject to the virus`s evolution. Unemployment figures published this morning show that initial jobless claims increased in 1.54 million. The FED will continue to carry out aggressive stimuli until it sees a clear recovery in the labor market and in prices.

Currency income drops 93.7% due to tourism in Mexico

According to INEGI figures, the inflow of foreign exchange resulting from tourism activities during April fell at an annual rate of 93.7%, collecting only 131 million dollars. The figures reflect the virus`s devastating impacts on one of the Mexican economy`s most important sectors, after a 79% fall in international visitors in April (compared to the same month of 2019). These figures suggest that this will be one of the worst quarters in history for the Mexican economy. Industrial production fell at an annual rate of (-) 29.6% in April (-25.1% month over month), with the greatest contractions seen in manufacturing industries (-35.5% annual) and construction (-32.8%). With this, in the January-April period, manufacturing has contracted up to (-) 9.3% compared to 2019. For Arturo Herrera, the Treasury Secretary, April will record the worst of the virus`s impacts, with estimates of a contraction approaching (-) 17%. It`s expected, as with the rest of the world, that without a new outbreak, the economy could recover in the second half of the year, even though 2022 will be marked by a strong recession in the country. At the moment, figures regarding new COVID-19 cases have not stopped accelerating, and yesterday a new record high number of daily cases was recorded, which could delay the recovery in Mexico and extend the virus`s negative economic effects.