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Article | 03 April 2020 |
Wall of money meets wall of fear
Financial markets whipsawed, as they weighed the negative impact of Covid-19 against massive stimulus packages aimed at supporting economies around the world. Governments and central banks stepped in to promise both spending and guarantees of liquidity in the financial markets. In the US, for example, Congress unanimously passed a $2 trillion rescue package, while the Federal Reserve (Fed) promised unlimited buying of bonds in a renewed QE (quantitative easing) programme. All these are measures to help markets regain confidence, while governments attempt to reassure populations in lockdown.
Bugs in the trade talks
The second round of EU/UK talks on a post-Brexit trade deal was cancelled. Many of the countries involved are now locked down. Meanwhile, it was confirmed that UK Prime Minister Boris Johnson and Michel Barnier, the EU’s chief Brexit negotiator, have both tested positive for Covid-19. With governments’ attention focused on dealing with the pandemic, it’s likely that the Brexit talks could stretch well beyond the original deadline of end 2020. And a whole raft of global trade discussions, not least the US/China talks which dominated the agenda last year, have been placed firmly on the back burner for now.
Covid-19 clears the air
They say every cloud has a silver lining, perhaps even the Covid-19 virus. Images from NASA show dramatic falls in the levels of pollution in the earth’s atmosphere. As factories have closed and aeroplanes no longer fly, the levels of nitrogen dioxide fell as much as 30% between January and February. And as traffic congestion has become a thing of the past in locked down cities like New York, carbon monoxide levels have dropped by 50% compared to last year. Sadly, the sightings of dolphins in Venice turned out to be fake news!