Forhandlinger er begyndt i den amerikanske kongres om en ny stimulipakke, der skal de hjælpeforanstaltninger, der udløber i juli, men det er uvist, om en ny finansiel pakke kommer på plads i denne måned. Danske Bank venter en pakke, der giver en mindre finansiel hjælp end den nuværende, og banken vil ikke udelukke, at der slet ikke kommer en ny hjælpepakke. Det vil i givet fald gøre en genstart langt sværere.
With fiscal uncertainty coming lower after Tuesday’s EU agreement and virus numbers generally under control, Europe, for now, seems less of a problem in investors’ eyes. Instead, focus turns to the US, where Congress struggles to find common ground on a new stimulus package as temporary measures stand to expire and the coronavirus remains a cause of sporadic lockdowns.
As noted on these pages yesterday, US congress sources on Tuesday expressed doubts on whether a new stimulus package could be put in place before temporarily higher unemployment benefits (an additional USD600 a week per unemployed) are set to expire by the end of this month.
Negotiations on a new stimulus package have begun this week and we expect the next stimulus package to include an extension of the higher benefits but, unfortunately, as of today, it does not seem as though the negotiations will conclude before 31 July.
However, we expect a reduction in the level of benefits, which could potentially slow the recovery. We cannot rule out the possibility of no extension and if this materialises, we expect a more significant setback in the recovery. See more here: Research US: Not extending higher unemployment benefits would lead to a significant negative income shock, 22 July.
S&P said Wednesday that the establishment of the EU recovery facility was a “break-through for EU sovereign creditworthiness”, referring to lower funding costs for the lowest rated member states as an important trigger in terms of lowering the risks of potential future downgrades.
However, at the same time the rating agency will also take into account longer term structural effects when gauging the growth potential among EU sovereigns. S&P has so far not been the most aggressive agency in terms of downgrades, but other rating agencies will likely reach similar conclusions when assessing funding outlooks during future rating actions. Greece is up for review by Fitch on Friday and it will be interesting to see what role the recent agreement has played in the rating decision.
