Sep 16, 2020
Brazil's Rio Risks Second Wave of COVID-19 With Ill-Timed Reopening
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By Pedro Fonseca and Rodrigo Viga Gaier
RIO DE JANEIRO (Reuters) - The reopening of beaches and bars as Rio de Janeiro heads into the heady summer season risks a second spike of coronavirus infections, experts warned, even as Brazil's second-largest city dismantles much of its emergency healthcare capacity.
Pictures of dense parasols rolling carpet-like over Rio's famed beaches and rowdy street-side drinking have gone viral in recent weeks, alarming epidemiologists who fear the reopening may have come too soon.
Part of the problem they say, is that Rio's decision to ease restrictions was based partly on incorrect data showing a fall in deaths, which later turned out to only be a bureaucratic delay in their notification.
Deaths were in fact still stable, at a high plateau.
COVID-19 has already devastated Brazil's postcard city, killing more than 10,000 people. If Rio were a country, its per capita mortality rate would rank as the world's worst.
Brazil has the world's third-largest coronavirus outbreak behind the United States and India.
"There's no guarantee the situation has permanently stabilized. There are still a lot of people susceptible to the virus in the city," said Americo Cunha, a professor of math and statistics at Rio de Janeiro state university who has been tracking the outbreak.
"If there aren't adequate containment measures, you could see a so-called second wave," he added.
A second wave could be particularly fatal.
While Rio built two temporary hospitals at the beginning of the pandemic, it has already closed one of them, citing a flattening curve.
The state has cut nearly half of its intensive care units.
The city had promised to build as many as seven field hospitals but failed to deliver them amid serious graft allegations.
The governor of Rio de Janeiro state was suspended in August for 180 days for allegedly receiving bribes linked to the state's coronavirus response. He denies wrongdoing.
"If we have a rise in cases due to this reopening process, the probability that the health system will collapse is very high," said Diego Xavier, a researcher at Fiocruz, a leading Brazilian public health research institute.
With the summer approaching, it is likely cases will inch upwards, as they have in Europe, epidemiologists say. So far, however, the number of deaths from coronavirus in many European countries has not risen in line with new infections.
Some cariocas, as Rio's sun-loving residents are known, say the beach is getting unfair attention.
"We're stuck in crowded buses or on the metro to get to work anyway," said Pedro Bittencourt, who works as a salesman at a clothing store. "So I think it's more than reasonable to be able to enjoy a bit of beach."
(Reporting by Pedro Fonseca and Rodrigo Viga Gaier, writing by Marcelo Rochabrun, editing by Stephen Eisenhammer and Lisa Shumaker)
Copyright 2020 Thomson Reuters.
News Source: usnews.com
The next wave of the global recovery could send commodity prices soaring
A freight train carrying iron ore travels along a rail track towards Port Hedland, Australia, on Monday, March 18, 2019.Ian Waldie | Bloomberg via Getty Images
The next phase of the economic recovery is likely to be driven by commodity-intensive infrastructure investment, analysts have told CNBC, potentially setting the stage for further gains across the industrial space in the coming months.
The prediction comes at a time when market participants are closely monitoring the strength of the global economic recovery, as many countries grapple with an upsurge in the number of reported Covid-19 infections.
The coronavirus pandemic has prompted forecasters to issue dire economic projections this year, with the OECD warning on Wednesday that the outlook remains "exceptionally uncertain."
One sign the recovery may be gaining momentum, however, came as the world's second-largest economy reported industrial output expanded the most in eight months in August.
China, which has been in recovery mode for months now, published data on Tuesday that showed industrial output growth accelerated to 5.6% in August when compared to a year earlier. It bolsters the view that Beijing's demand recovery continues to gather pace, with government stimulus helping to fuel a rebound.
"We've already seen a metals-intensive response in China, highly metals-intensive," Max Layton, head of EMEA commodities research at Citi, told CNBC via telephone.
"It has been absolutely stunning how strong China has rebounded on the construction side of things," he continued, reflecting on the "spectacular" rally seen across the industrial commodity space as a result.
Layton identified "three big catalysts" for commodity investors to track through to the end of the year: Coronavirus vaccine news; the strength of China's economic recovery; and the scale of the U.S. easing package.Iron ore prices could 'skyrocket'
"I do think that a lot of the stimulus will be infrastructure driven. We already know that there is a massive infrastructure deficit in a lot of developed countries and that is something that could be addressed in this period," Nitesh Shah, director of research at New York-based WisdomTree Investments, told CNBC via telephone.
"Why waste a good crisis? You can actually get through a lot of the infrastructure programs that you've been waiting decades to actually get through the door in this time," Shah continued. "I'm not as optimistic on a big 'V-shaped,' rigorous recovery but even some sort of recovery is good for the industrial space."
A V-shaped recovery refers to a sharp decline in economic activity which is then matched by an abrupt rebound.VIDEO3:2403:24Next phase of the economic recovery will be 'massive' investment in infrastructure, S&P Platts saysSquawk Box Europe
"Ultimately, if you look at the response economies are making to (the coronavirus crisis), we've had the fiscal response, we've had central banks slashing interest rates, we've had central banks pumping more money into economies, the next phase is massive investment in infrastructure and that's going to come globally," Andy Critchlow, head of news in EMEA at S&P Global Platts, told CNBC's "Squawk Box Europe" last month.
"We saw this back in 2008-2009 in response to the financial crisis (and) what did we get out of that? We got a rally in some of the industrial commodity markets — it was a super-cycle," he said.
"I'm watching things like iron ore very closely now because those sorts of industrial commodities are going to skyrocket if we do get this bounce-back driven by infrastructure and then that will filter into oil."
Spot iron ore prices climbed to fresh six-and-a-half-year highs on Monday, trading close to $129 a dry metric ton on the back of a construction boom in China.
The steelmaking ingredient has since pared gains, changing hands at $126.59 on Friday. Iron ore prices have climbed more than 37% year-to-date.Twenty kilogram gold and silver bricks sit at the ABC Refinery smelter in Sydney, New South Wales, Australia, on Thursday, July 2, 2020.David Gray | Bloomberg via Getty Images
Alongside net-zero interest rates globally, demand for a hedge against a perceived inflation risk has helped spot gold futures jump more than 28% so far this year, while silver has gained around 50% over the same period.
Looking ahead to 2021, Critchlow suggested some of the world's largest economies could soon announce "big" infrastructure developments.
These projects were likely to be led by China, India and the U.S., he argued, noting that both candidates in the upcoming U.S. presidential election had pledged to spend an "awful lot of money" on infrastructure. "That's got to be good for oil demand and it's got to be good for commodities across the board."Trump vs. Biden on infrastructure
President Donald Trump was rumored to be preparing a $1 trillion infrastructure plan earlier in the year, Reuters reported, citing an unnamed source. However, his position on future investment into infrastructure has remained vague ahead of the November 3 presidential election.
The Trump campaign announced the president's second term agenda last month, pledging to "build the world's greatest infrastructure system." The press release offered no further detail on how Trump planned to fulfill this promise if re-elected. In 2016, the incumbent Republican famously committed to spending $1 trillion on infrastructure, but nothing much has happened since.Democratic U.S. presidential nominee and former Vice President Joe Biden speaks about climate change during a campaign event at the Delaware Museum of Natural History in Wilmington, Delaware, U.S., September 14, 2020.Leah Millis | Reuters
By comparison, Democratic presidential candidate Joe Biden has pledged to spend $2 trillion "to build a modern, sustainable infrastructure and an equitable clean energy future." Biden has said, if elected, he plans to rebuild roads, bridges, green spaces and water systems as well as providing universal broadband.
"To the degree the market believes they are going to put through infrastructure easing, then yes, it is good news either way for the commodities that are going to be exposed to both candidates' proposals," Citi's Layton said.
He suggested Trump's prior commitments to "old school" infrastructure projects, such as roads and bridges, would likely be "steels-intensive."
Biden's commitment to develop solar and wind technologies would likely benefit copper and, to a lesser degree, silver, he added.Related Tags
- United States
- Donald Trump
- Joe Biden