Global Macro: US and UK vaccinations still significantly outpacing EU – Since our last update on the covid-19 vaccine rollout, we have seen continued diplomatic skirmishes between the UK and EU over supplies and potential export bans, and last week there was even a temporary suspension of AstraZeneca vaccinations by a number of EU countries because of worries over side effects. Vaccinations have since fully resumed following a green light from the European Medicines Agency, and overall, little has changed in terms of vaccination trends – with the US and UK continuing to significantly outpace EU countries. As of yesterday, the UK had administered 45 vaccine doses per 100 people, the US 40 doses, and the EU just 13 doses. The daily pace of vaccinations also continues to be much higher in the US and the UK, which are inoculating around 0.8% of their populations per day, while the EU is running at around 0.3% per day. Indeed, the suspension of AstraZeneca vaccinations meant that an expected acceleration in EU vaccinations over the past week did not materialise, although we expect this lost ground to be made up for in the coming weeks.
EU vaccine supply to double from April – Despite the problems with vaccine supply that we have seen in Europe in the first quarter of the year, there have also been some positive developments, including a front-loading of additional Pfizer/BioNTech deliveries, the approval of the Johnson & Johnson single shot vaccine, and the likely approval of Curevac in May. The ramping up of the Pfizer/BioNTech vaccine in particular will drive a doubling in vaccine supply over the coming weeks, which should enable the EU to inoculate around 0.6% of the population per day, i.e. not far off the current US and UK pace. A further increase in supply will enable this pace to pick up further in June and July, to around 0.9% per day. While this is significantly less than projections by the Dutch government of an almost 2% daily vaccination pace by May, we expect this to mean that at least half of the over 50s will have been fully vaccinated by mid-June, and most in this age group to have received their first shot. The actual vaccination path depends of course on logistics and vaccination willingness keeping up with the increase in supply. However, assuming this pace is achievable, it should be enough to sufficiently relieve the pressure on ICU capacity in hospitals and to enable a reopening of the economy – potentially a couple of weeks sooner than our base case of end-June/early July. In the meantime, many countries are currently tightening restrictions on the back of the recent surge in cases due to the spread of more infectious variants. While this is likely to lead to a renewed fall in activity in some eurozone countries, this is something we had incorporated into our base case, and as such, we make no changes to our below consensus growth forecast for the eurozone of 3.3% for 2021 (consensus: 4.2%). (Bill Diviney, Daniel Ender, Aline Schuiling)