Elevator Economics, German Factory Rebound, London Exit: Eco Day

(Bloomberg) -- Welcome to Monday, Europe. Here’s the latest news and analysis from Bloomberg Economics to help you start the day:

• The world economy is entering the second half still deeply weighed down by the pandemic with a full recovery now ruled-out for this year and even a 2021 comeback dependent on a lot going right
• German factories saw demand rebound in May after the country loosened restrictions to contain the spread of the coronavirus, adding to evidence that Europe’s economy is starting to recover
• The coronavirus pandemic has permanently changed European economic policy, locking in a more extensive set of monetary tools, according to European Central Bank policy maker Francois Villeroy de Galhau
• Meantime ECB President Christine Lagarde said the euro zone faces about two years of downward pressure on prices, but could see a turnaround after that
• The giants of Wall Street and European banking are giving up their stronghold on London. And all of those moves were planned before the coronavirus hit
• U.S. Labor Secretary Eugene Scalia said the economic recovery from the coronavirus pandemic has been better than expected so far
• The coronavirus is inflicting a price shock on low-income Americans that risks further driving up inequality according to Bloomberg Economics
• Business conditions in the United Arab Emirates returned to growth but deteriorated in Saudi Arabia, a sign of an uneven recovery in the Gulf
• A mass exodus of workers that followed India’s harsh lockdown is forcing businesses to review their labor policies as they try to lure the people back with incentives as the economy reopens
• Economists are divided on the outlook for Australia’s recovery: many see a U-shaped, while a growing number see a W-shaped. Both support the RBA view interest rates will remain low for a long time
• Just over a month after turning more upbeat on the economy, the Bank of Israel is still unlikely to tinker with its near-zero interest rates

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