Financial Markets latest publications
The challenges faced by COVID-19 the Fed announced additional $750bn in loan support.With this additional action, the Fed has committed to providing $2.3Tn in loan to support the economy.Given the historic rise in unemployment claims it's not surprising that the Fed has taken further actions to contain the economic fallout.
The credit granted by banks remained the main source of funding for the private sector. Financial intermediaries have granted one third of the formal loan portfolio to mortgage loans over the past five years. Portfolio balances mirror patterns of economic activity at the end of 2019.
The Covid-19 pandemic that escalated in the first quarter of this year will have a dramatic impact on the U.S. banking sector. The effects will range from direct and immediate to indirect and long-term that will only emerge in the wake of the crisis.
The current crisis represents an unprecedented risk to the U.S. economy as the fallout from the coronavirus has created a confluence of supply- and demand-side shocks coupled with a financial meltdown.
March 25, 2020
Mexico | Impact of Covid-19 on the economy: inaction is more dangerous than overreaction
This is a time when decisions must be made quickly; what is decided will have significant consequences. Drastic measures to ensure that people isolate are urgent, “desirable” and absolutely necessary.
The rapid outbreak of the new coronavirus (COVID-19), which has spread far beyond China, has wreaked havoc on financial markets. World stock markets have fallen by around 30% in just over a month, led by the transport, tourism, hotel industry and energy sectors, which has been followed by others such as finance.
March 6, 2020
Market comment | Fed intervention failed to calm markets, as core bond yields fell further
Global policy response failed to reassure investors, unnerved by the alarmingly rapid outbreak of Covid-19 beyond China and its impact on global growth and financial stability. Volatility soared and the USD and EMs FX depreciated.
Financial markets remain volatile with the concerns about the virus spillover effect being the main market driver. Declines in the equity markets have resumed, as market risk measures (VIX) soar and U.S. yield reaches new lows.