By Thomas Black and Jens Erik Gould
April 26 (Bloomberg) -- Mexico requested the closure of bars, movie theaters and churches in the capital to fight an outbreak of deadly swine flu, while stopping short of ordering workplaces shut on concern about the economic impact.
The effort to fight the virus has a “high potential for disruption,” Finance Minister Agustin Carstens said today while speaking to reporters at the International Monetary Fund’s spring meetings. It’s too early to gauge the economic impact, he said.
The epidemic, which has claimed as many as 81 lives, threatens to deepen the country’s economic decline after U.S. demand for Mexican exports including cars and home appliances plummeted. The Mexican economy shrank 1.6 percent in the fourth quarter and probably contracted another 4.2 percent in the first three months of this year, according to a central bank survey of 32 economists published April 1.
President Felipe Calderon has been given emergency powers to order quarantinesกัก and suspend public events. So far, the government has closed schools in Mexico City and the states of Mexico and San Luis Potosi until May 6, and has canceled government activities that draw crowds.
“By agreement of the members of the economic cabinet and submitted for consideration by the president, economic activities won’t be suspended because of the epidemic,” Economy Minister Gerardo Ruiz said in a news conference last night. The government opted instead for actions that “mitigate the impact on the economy and on the functioning of society in general.”
Health Minister Jose Cordoba yesterday requested, but didn’t order, the closure of bars, movie theaters and churches.
Mexican Finance Minister Agustin Carstens said it’s too early to gauge the effect of the outbreak on Latin America’s second-largest economy.
Economic Impact
“It’s hard to say at this stage how deep and how wide and how long this episode will be,” Carstens told reporters in Washington yesterday, where he was attending a meeting of the World Bank and International Monetary Fund. “If we are successful the impact should be minor.”
Isidro Reyes, who was selling cheeses and fruits from the back of his pickup truck in Mexico City’s Roma neighborhood, said business had fallen 50 percent since April 24, when the government first shut schools.
Empty Streets
“People are scared,” said Reyes, 29. “We’re alone on the streets.”
Raul Sanchez, a 49-year-old taxi driver in Mexico City, said business has dropped by half since April 24.
http://www.bloomberg.com/apps/news?pid=20601087&sid=ajQ2fE_qHCXE&refer=home
The Mexican Swine Flu Pushes a Return to Safe Haven Buying
Traders continue to be influenced by the pandemic of Swine Flu in Mexico. Fears of reduced short term economic activity have traders moving out of riskier, higher yielding currencies into the safe haven Dollar and Yen. Crude Oil prices also fell yesterday as investors fear a weakening demand for international travel.
Yesterday’s trading in the currency market was highly influenced by the outbreak of swine flu in Mexico. Worries about a spreading outbreak drove losses in equity markets, and with that came forex traders buying safe haven currencies. As such, the Dollar and the Yen were the prime beneficiaries. The Dollar rose sharply against the EUR as comments by the European Central Bank (ECB) President sunk the European currency along with other risk sensitive currencies. However, the Dollar fell against the JPY.
The flu pandemic has been driving trading in the financial markets the past two days. A void of economic data has also created opportunities for markets to head south. Trading has been characterized as extremely risk averse. Losses in equity markets and moves to the Dollar and Yen were seen as an example of this trading behavior. However, this pattern may be only short lived as an important economic indicator is set to be released tomorrow.
The Conference Board will release its Consumer Confidence index at 2:00pm GMT. The survey is a leading indicator of consumer spending and is an excellent gauge of current economic conditions and the overall economic situation. The release of the survey typically creates a volatile trading environment, affecting not only the USD pairs but also the value of Crude Oil and Gold. A survey with a result greater than the forecasted value of 29.6 could send the EUR/USD below the 1.2950 mark.
http://www.forextvblog.com/2009/04/28/the-mexican-swine-flu-pushes-a-return-to-safe-haven-buying/
What would a swine flu pandemicdo to the economy?
Bruce WatsonApr27th 2009 at 12:30PMAs the swine flu epidemic has moved from Mexico to Canada, the United States, New Zealand, and Spain, global financial markets are already feeling the effects of the outbreak. In the United Kingdom, several stocks have fluctuated based on speculation about the disease's effects, and American indexes started lower on flu concerns.
http://www.dailyfinance.com/2009/04/27/what-would-a-swine-flu-pandemic-do- to-the-economy
Conclusion
From those three news that I had been reading through and the issue that I want to focus on is about the economic after the swine flu. The first news talked about the economics’ impact in Mexico. The finance minister of the Mexico said it was not the right time to gauge the economic impact, because things were not done yet. Mexico domestics’ traders were totally stop, schools and some offices were closed. Many activities and events were suspended, due to the security policy of the government. Mexico economy had been fall since, 24 April. This is including the import and export goods between the international. The imports and exports were fall, many countries denied the items from Mexico, a lot of investors slow down and pause their plan. The second news continues the issue of Mexico economic. The Mexico currency had been focusing on this news. The crude oil seems to be falling down as investors fear a weakening demand for international travel. The survey said that consumer spending is the best gauge of current economic conditions. And the last news is about the impact of the swine flu to the international financial. It had been spread around many countries and with the same reaction, the economics in that countries were getting down like the Mexico. Many countries lower the flu concern.
My reactions
1. I think people still getting too nervous from the swine flu, because they will not eat the pork, but the pork was actually not the transmission. The pork can be 100% safe by heating.
2. Swine flu can be infected only human to human.
3. The tourism sector had been the most effective to this event, because it pause people to travel to the risking infected country.
4. Many retailers were in trouble, because people still staying at home and will not go out for spending. So, the economic is getting deflation.
5. To keep your self safety. Stay away from the crowd place, use a safety mask, eat well, have a good rest and keep your self fit by playing sport.
6. Right now the safety mask has a demand to the public. And many retailers are having a good business, they sell very well with the regular mask and the fashion mask. This is one of the short term opportunity to do the selling for some smaller retailers.
H1N1 influenza virus photographed at the CDC Influenza Laboratory.
