2 March 2020
The decision by global policy makers to address economic fallout from the coronavirus outbreak has led to a tentative recovery today. Early trading in Frankfurt, Paris, London and Milan has seen national indexes rise by 2% with the MSCI up 0.5%.
On Monday, Christine Lagarde the head of the European Central Bank, expressed a willingness to deal with the threat and is expected to join a conference call with G7 finance ministers and central bank governors later today to discuss specific measures to address market falls. Similarly, officials at the US Federal Reserve have expressed a desire to act which has led to climbs of up to 1% in Asian trade so far today.
Although these gains have not been sustained due in part to market hunger for further detail, the trend is very clear. “Barring any further deterioration of the coronavirus outbreak, we believe that the global cyclical recovery is likely to gain further momentum,” Schroders’ Asian multi-asset team has said in a report.
Australian shares ended up 0.7% after the central bank cut interest rates to a record low of 0.5%, the fourth reduction in less than a year. Oil prices gained another 2% overnight after a jump of more than 4% on Monday.
We await further detail from today’s conference call and remain optimistic for market recovery.
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