ketchup schreef op 13 juni 2020 09:51:
Recovery from the deep covid-19 dip has started, as economies reopen
emergency measures around the globe, including harder en softer lockdowns led to contraction of the global ecnonomy, particularly for Q2 - which will be worse than Q1
Authorities are reacting by adding large scale fiscal and monetary stimulus
the FED indicating that rates will stay near zero at least to 2022
FED also indicates to purchase as many assets as necessary to promote smooth market functioning and is implimenting a range of congressional lending programmes to provide iquidity to business in need - potentially upto $ 4trn depending on demand
the ECB has kept its policy rates constant ( already negative) , and sharply increased its QE programme including the inroduction of EUR 1350 bn to the the Pandemic Emergency Purchase Program = PEPP
Notwithstanding these and other support measures , we hv sharply lowered our 2020 annual growth forecast for all advanced as well as emerging markets
US to contact by 5% and Eurozone by 7%
EM markets from + 4% now to - 1.5%
only a few Asian countries we expect modest positive growth, mainly China ( from +6% now to + 2% )
For most EMs we expect negative growth, although with strong variations bewteen countries
We expect Latin America to be hit the most, followed by emerging Europe and emerging Asia
reopening the economies will lead to some recovery and will improve market sentiment
our base case for the global economy assumes a bounce in activity around the middle of the year to be followed by renewed weakness mainly because of consumer caution ( less demand ) , no vaccine as yet in the near term, additional negative effects as rising unemployment and bankruptcies will emerge
more QE to be expected as outflows from investors , must be halted ( preserve liquidity)
a risk-off mood in international capital markets typically results in an outflow