European Central Bank confirms: economy will take two years to recover from crisis

The pandemic situation in the world is evolving in dispersed order: it seems to be slowing down in France but accelerating in other European countries ... and everyone is taking the measures they deem necessary. But a big question remains: how long will the economic crisis linked to the health crisis last? About two years, according to the ECB. Hope for a vaccine in 2021 In an interview that the chief economist of the European Central Bank (ECB), Philip Lane, gave to the newspaper Les Echos on November 22, 2020, we discover that it will be the vaccine, announced as available at the end of 2020-beginning of 2021 which will play an essential role in the recovery of the economy. For now, the ECB is watching closely "the circulation of the virus" and the health measures taken as a result, but especially the change in "consumer behavior". "It is certain that the two phenomena combined will lead to a decline in activity."

Statistical miracle and revival of the Covid

The financial centers have erased, in recent days, part of the heavy loss recorded last Thursday. The hundreds of billions injected by central banks and governments have helped fuel the recovery, allowing statistics to rebound and ruling out the middle scenarios. A sweet euphoria barely overshadowed by the renewed vigor of the Covid. Barely, really?

Statistical miracle and revival of the Covid

When you take a little bottle, on the financial markets as elsewhere, you quickly learn that the world is never binary as soon as it integrates human. I often explain it to my children or to fresh trainees from school who arrive with some certainty. Playing bad guys and good guys only has a time. And there you say to yourself: but where is he taking us this morning? Do not panic, I hang up the cars. Well, I believe.

In a period of acute crisis, as was the case at the height of Covid-19, naturalness returns at a gallop and we are left with cynical deniers on the one hand ("whatever, you get carried away for nothing ") and on the other anxious forecasters (" we're all going to die or almost "). The two clans are mistaken and the reality is, once again, intermediary and can be summarized as follows: the coronavirus has caused considerable damage but its consequences are not as extreme as what was planned. But the economic models that have turned recently, in addition to flaunting worrying limits, are more pessimistic than reality. This has been seen with employment or consumption figures in the United States.

And this should continue with a simple basic effect. The monthly and quarterly variations are accelerating mechanically in all sectors. Even the most affected by the Covid-19. For example, the May auto sales statistics show significant growth rates since no vehicle was sold in April. Sales in clothing too. Even restaurants and hotels will show nice upward slopes in the coming weeks. They start from scratch. In "monthly change", not in "annual change", obviously. But these double-digit growth statistics have a massive positive effect on confidence indicators and on investor perception. They are even more powerful than the certainties about the contraction of GDP in the coming months and than the multiple risks that threaten the economy. And explain part of the rebound in the indices since the end of March, even if we keep a certain impression of a little frenzied runaway, which is reminiscent of the famous drawing of the American designer Kal.

The CAC40 gleaned 0.1% to 4956 points at the opening, even if investors keep an eye on the resurgence of the cases of Covid-19 in the south of the United States and in China, and on the further deterioration of the health situation in Brazil.

Inflation is on the agenda today, in the United Kingdom (8:00 am), in Europe (11:00 am) and in Canada (2:30 pm). In the United States, building permits and construction starts (2:30 p.m.) will precede the Conference Board leading indicators index and oil stocks (4:30 p.m.), before a new hearing of Jerome Powell by parliamentarians at the Capitol (6:00 p.m.) .

The euro fell back below the 1.13 USD mark. The ounce of gold is stable at 1725 USD. Oil retreated to 37.45 USD per WTI and 40.30 USD Brent. The yield on the 10-year US government bond reached 0.73%. Bitcoin drops slightly below 9500 USD.