Chart of the Week: Mobility in DM and EM countries in the time of COVID-19

Macro

Christopher Dembik

Head of Macro Analysis

Summary:  Our 'Macro Chartmania' series collects Macrobond data and focuses on a single chart chosen for its relevance.


Click here to download this week's full edition of Macro Chartmania.

Months ago, we have created a new section in our Macro Chartmania devoted to track high-frequency data in order to assess in real-time the evolution of the economy in the time of COVID-19. It includes many statistics referring to the evolution of cases, mobility, and the impact on unemployment for instance. Today, we decided to take a look at mobility data released by Google in its COVID-19 Community Mobility Reports (see here for further insights).

These reports are published on an ongoing basis, with the most recent statistics referring to the situation as it was two to three days ago. In other words, the below chart shows you the trend in terms of visits and length of stay in the retail & recreation sector, one of the most affected sectors by the pandemic, in developed market countries at the end of last week. In our sample of seven countries, the visits to retail & recreation stores are back to pre-COVID level only in two countries (Germany and Italy), with even an increase of 8.5% compared with the baseline in Germany which can be explained by the combination of efficient COVID-19 containment and VAT cut from 19% to 16% till the end of the year as part of the massive and targeted stimulus package unveiled by the country. In Italy, the explanation behind the continued improvement (+3.7% compared with the baseline) is that the country has kept the disease under control due a more gradual lifting of restrictions than in many European counterparts, high public compliance and stricter enforcement.

In contrast, in France, the United States, Spain and Japan, the recovery has stalled with a number of visits that is still below the baseline. Interestingly, we don’t see yet any changes in data related to mobility in France and in Spain where additional restrictions have just been re-introduced to cope with the second wave of the pandemic, but this may be due to a lag between data collection and data publication. For instance, in France, most of the measures were put into force over the weekend, with the closure of schools, shops, pubs and restaurants in the metropolitan region between Aix-en-Provence and Marseille (France’s second largest city).

At the other end of the spectrum, the resurgence of COVID-19 cases in the United Kingdom has already seriously affected mobility. The visits to retails & recreation stores are now down 15.5% compared to the baseline, which represents a drop of about two points in just five days. Given a fairly similar heath situation in the United Kingdom, Spain and France, it is likely we will also see a decline in mobility in the coming days in these last two countries.

Meanwhile, on the emerging market front, normalization slowly continues, with mobility being back to pre-COVID level only in Taiwan. However, there is still a long road ahead for India, where the risk of new state lockdowns is looming, especially in the populated area of Kerala, and Mexico, where the pandemic is definitively not under control with a total number of cases reaching 730,317, including 76,430 fatalities as of yesterday. Mobility is respectively 32% and 19% below the baseline in India and in Mexico according to the latest update of the COVID-19 Community Mobility Report.

In the below chart, we also see that mobility has been curtailed from mid-August in South Korea, which reflects the implementation of further business restrictions, especially on eateries, franchised coffee chains and other retail stores in the densely populated capital area. However, mobility is expected to increase again in coming weeks as the country has just recently decided not to prolong these measures. What we can learn from the situation in South Korea is that normalization in economic activity won’t be a smooth journey, but will rather consist in moving through stop-and-go with re-introduction, here and there, of localized and sector based restrictions depending on the spread of the virus. It will further increase constraints on economic activity and ultimately put at risk the very fragile recovery that has started since the global lockdown was lifted. We fear that for many countries this situation will translate into a new drop in activity in Q4 this year, notably in France where we are currently staying and where we see a growing number of the population and even the local elite challenging how the government is handling the crisis.

Disclaimer

The Saxo Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-sg/legal/disclaimer/saxo-disclaimer)

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Markets or its affiliates.

Saxo Capital Markets Pte Ltd ('Saxo Markets') is a company authorised and regulated by the Monetary Authority of Singapore (MAS) [Co. Reg. No.: 200601141M ] and is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms & Risk Warning to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products such as Margin FX products may result in your losses exceeding your initial deposits. Saxo Markets does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Markets does not take into account an individual’s needs, objectives or financial situation.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-sg/about-us/awards.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan. Please click here to view our full disclaimer.

This advertisement has not been reviewed by the Monetary Authority of Singapore.