The Day at a Glance | October 28 2020

The Top

· COVID-19 second wave sounds the alarms in Europe; markets fear a halt in the recovery due to new and stricter mitigation measures.

· Colima, Jalisco, Nuevo Leon, Aguascalientes, Tamaulipas, Coahuila and Michoacán governors propose a citizen`s consultation to break ties with the Federation.

Economic environment

The fast spread of COVID-19 in Europe has started to put pressure on governments, who consider carrying out stricter mitigation measures. France recorded the largest daily increase in deaths since April and President Emmanuel Macron is expected to announce new restrictions this morning. Last week France logged four consecutive days of record daily cases and has recorded 25 days of an increasingly fast spread of the virus. European markets have reacted defensively amidst higher chances of seeing shutdowns that would help control the spread. In the United Kingdom, experts advise Boris Johnson`s government to implement country-wide shutdowns as the virus`s spread points to a long lasting peak in the winter and could put extraordinary pressure on the country`s national health system. In Germany, Chancellor Angela Merkel will propose the closure of bars, restaurants and entertainment facilities for a month. The virus`s spread has not been able to be controlled through partial measures (obligatory use of masks, local quarantines) and increases pressures on governments to implement more drastic measures to avoid an uncontrollable health emergency in the winter. One of the most important risks to global recovery starts to materialize in the European continent. Oil has already been affected by these events since demand for the energy resource will fall; its price is currently set under $37.5 (WTI). A growing demand for dollars and US Treasury bonds has also been observed. All of this during an uncertain period amidst the upcoming presidential elections in the US next week.