| Want the lowdown on what's moving European markets in your inbox every morning? Sign up here. Good morning. Renewed lockdowns as cases climb, mounting political fallout from the pandemic and a very uncertain outlook for the upcoming earnings season. Here's what's moving markets. False Summit Coronavirus outbreaks in countries including India, the Philippines and Indonesia climb, while new flare-ups are forcing renewed lockdowns in some areas that had previously flattened the curve. Australia's two most-populous states will close their shared border as Victoria reported the biggest increase in cases since the crisis began, while Spanish authorities imposed a second lockdown for a Northwestern region. U.S. President Donald Trump expects "a therapeutic or vaccine solution'" by year-end. Once a vaccine is ready, another hurdle seems to await public health officials: Up to half of people in countries including the U.S. and Germany may reject the shot. Fallout The full political fallout of the pandemic will take some time to become clear but some issues are already bubbling back to the surface. The European Union's budget rules will apply again once the Covid-driven recession is over, according to the European Commission's Valdis Dombrovskis. U.K. Prime Minister Boris Johnson has been set a challenge to fix the problems facing the country's social-care system in a year as his government prepares to pump money into job centers in anticipation of a spike in unemployment. The question of Scottish independence is also being raised amid a perception that the semi-autonomous government there has handled the virus response better than Westminster. Forecasts Two predictions from policymakers to mull over as a new week begins. The pandemic will result in a permanent change to European monetary policy by locking in the more extensive policies that have been enacted and forcing the creation of a joint fiscal plan, according to the European Central Bank's Francois Villeroy de Galhau. ECB President Christine Lagarde, meanwhile, says Europe will face two years of downward pressure on prices but that the virus will accelerate existing shifts in the economy toward digitization, automation, shorter supply chains and greener technology that will ultimately help with the recovery. At the same time, a split is brewing over the bank's emergency bond-buying program. Uncertain Outlook Earnings season is on the horizon and the fate of the stock rally will hinge on numbers that no one knows how to predict. Few agree on the state of the economic backdrop too, with Goldman Sachs Inc. revising down estimates for the U.S. economy this year but some politicians saying the recovery from the pandemic has been better than anticipated. A full bounce back for the global economy this year seems to be out of the question and things getting back to health in 2021 will depend on plenty of elements going right as the hopes for a V-shaped recovery fade. And it appears it will be Generation Z that bears the brunt of the economic hit. Coming Up… European and U.S. stock futures are pointing to a buoyant start to the week, following Asian equities higher as investors weigh up the potential for ongoing monetary policy support with a growing number of virus cases. German factory orders will be the order of the day in economic data and earnings will be quiet, but watch for any reaction to reports the U.K. is considering raising the threshold at which homebuyers pay stamp duty and news that Uber Technologies Inc. is close to announcing a deal to acquire food-delivery rival Postmates Inc., continuing the trend of consolidation in a sector which has been a big winner amid lockdowns. What We've Been Reading This is what's caught our eye over the weekend. And finally, here's what Cormac Mullen is interested in this morning It seems China's influential state media could be keen students of famed value investor Benjamin Graham. The nation's CSI 300 Index surged to a five-year high Monday — bringing this month's gains to over 10% — as positive sentiment was boosted by a front page editorial in the Securities Times on the importance of fostering a "healthy" bull market. When the gauge was last at these levels in 2015, China's stocks traded at a premium to their global peers, while this time they are at a steep discount. The gap between the index's 12-month forward price/earnings ratio and that of the MSCI AC World Index had slumped to its lowest in at least 15 years in June, according to data compiled by Bloomberg. While China stock bulls have valuation on their side, they will be keen to avoid too many comparisons to 2015. The CSI 300 soared over 50% in the first half of that year, before plunging more than 40% in a matter of months after the debt-fueled rally crashed.  Cormac Mullen is a cross-asset reporter and editor for Bloomberg News in Tokyo. Like Bloomberg's Five Things? Subscribe for unlimited access to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. | 
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