Financial market volatility.
The COVID-19 pandemic, which has so far resulted in more than 34,000 confirmed deaths worldwide and infected over 720,000 people, is pushing the global economy into a deep recession and placing the financial system under the severest strain since the collapse of Lehman Brothers in 2008. Investors remain sceptical about efforts to stimulate economies even though the world’s leading central banks and governments are adopting a 'whatever it takes' approach by pledging to spend trillions of dollars to stabilise markets, support business activity and shield household incomes.
The trade-weighted dollar has lost 4.5% since March 19 but remains 3.0% higher than on March 9, adding to the tighter financial conditions.
The Shanghai equities index has outperformed Western equities from mid-February; this will continue if Chinese activity recovers faster.
The price of Brent crude oil has plunged this month, severely straining high-yield energy bonds and fuelling concerns about a debt crisis.
