Global Week in Review: 29 May 2020
The last week of May has seen a rally of sentiment, although it has been predominantly optimistic across the globe. Economies are beginning to reopen, and government stimulus is supporting people and businesses to get back on their feet and return to pre-COVID-19 levels. Tensions between the United States and China continue to simmer while oil is beginning a gradual increase. This comes after a global oversupply sent oil prices into negative territory earlier this year. Coronavirus cases continue to rise with the global reported death toll surpassing 360,000 and infected cases edging close to 6 million.
The European Union (EU) has been particularly hard hit as countries such as Spain and Italy were experiencing financial hardship prior to the coronavirus pandemic. Fortunately, the EU announced a ‘Next Generation EU’ recovery plan this week, valued at A$1.2 trillion (€750 billion) to assist the 27 countries within this bloc to emerge from the crisis on an even platter. This is to prevent a greater divide from being created caused by poorer countries taking longer to build momentum and rebuild their already struggling economies.
The riots that erupted in Hong Kong during the majority of 2019 and the beginning of 2020 have now resumed as the flattening curve sees social distancing restriction ease. China seeks to gain control and eliminate the autonomy of what is considered the Asian financial hub. Their status as a financial superpower and Asian hub will be eliminated as the communist interests of China will restrict the free market operations of this area.
Moving to commodities, the demand for oil will inevitably rise as countries reopen their economies and resume business activities. A theme that is happening within Australia is that car sales are rising as people avoid public transport. This is to mitigate the risk of contracting the virus while a vaccine is yet to be developed. This increase in motor vehicle usage will support a greater demand for oil and assist in increasing the price of oil.
From an environmental perspective, these global lockdowns have been extremely beneficial and have bought the world time in its fight against global warming. The canals in Venice are deemed to have been the clearest in approximately 60 years. Dolphins have been spotted swimming around the canals as tourist evade the area amid the pandemic. Rare sights of blue skies appeared in Beijing as factories shut down and lockdowns restrict travel across reduce the amount of emissions produced. In terms of finding a vaccine, there is a positive outlook as trials begin on people across the globe. This is one step closer to finding a cure which could be discovered and made commercially available by the end of 2020- which is faster than the 12-18-month timeframe that has been previously predicted.
By Caroline Wong
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