After global equities enjoyed cheer and recovery last week, the first half of this week was mired by the wince before the pain – as markets recoiled in anticipation of the Fed 2020 economic projections.
“Clearly shaken by the OECD’s own set of dire forecasts, the tentative gains that had started the day were nowhere to be seen by the afternoon session.” said Spreadex Financial Analyst Connor Campbell.
As the afternoon progressed, the looming Fed projections saw equities continue their slide, with the Dow Jones shedding 250 points to below 27,000.
“This [came] as US inflation fell for a 3rd consecutive month – the latest figure came in at -0.1% – nixing hopes of a flat reading.” added Campbell.
Emulating the losses of its US counterpart, the Eurozone also suffered. The DAX dropped 0.9%, while the CAC shed 0.8%. Meanwhile, the FTSE managed to restrain its losses to a decline of only 0.2%.
Despite being among the ‘worst hit’ developed nations in the OECD’s analysis, the organisation’s forecast of an 11.5% contraction in 2020 was less severe than the 14% fall estimated by the Bank of England.
Additionally, Connor Campbell added that “[BoE] governor Andrew Bailey also gave the FTSE a bit of a boost, suggesting in a private event that the economy will see a faster-than-usual recovery due to the specifics of the current situation.”
