Coronavirus and markets in the week from 9/6 – 15/6/2020
Markets weakened sharply last week on fears of another wave of infection and, above all, the US Fed's less-than-optimistic outlook, which said it would take several years to restore employment to pre-coronavirus levels. This also affected currency pairs, with the Australian dollar, the New Zealand dollar and the British pound weakening in particular.
Yesterday, however, markets rose sharply under reports of further increases in US fiscal stimulus and the US Fed's plan to purchase corporate bonds. However, even the Fed cannot stop the infection with its measures. There are still countries in the world where new cases are growing at a relatively high rate, and new cases have reappeared in China and Japan. So far, new cases in China are in low numbers, but if the daily increase starts to reach triple digits, then market sentiment could change quickly.