Risk Adjustment Perceived Amid Still Markets in Asia; Global Economy Making Progress to Recovery

  • S&P Futures recorded a 0.40% increase to 1,837, showing recovery up at 11 points from seven-day low, amidst the preliminary meeting in Asia on Tuesday. As such, the risk indicators widen yesterday’s recovery following modest positive trade catalysts.

    First, among the risk-reset triggers, is the World Health Organization’s (WHO) abstinence to support the US claims on China. The entity stated that it didn’t get any evidence from the US that underpins the claim that China’s Wuhan Laboratory was the reason for the COVID-19 plague.

    Likewise, supporting the risk readjustments, is the Reuters report on the pandemic’s declining fatality rate, regardless of whether the count reached past one-fourth of a million worldwide.


    On Global Economy

    Goldman Sachs’ analysts suggest that the world economy has bottomed and on its way to recovery as the lockdown measures appear to be going well. 

    Quarantine and social distancing restrictions are slowly being eased across the world. 

    Furthermore, GDP is expected to grow as businesses and households mix higher industrial activity with sustained infection control, including glove-wearing and regular cleanings of work environments. 

    Annualized GDP growth rates are forecasted to average at 32% in the 2nd quarter, +16% in 3rd, and +13% in 4th over the advanced economies.


    What Happens Next for Traders?

    Moving forward, traders will keep a close watch on the Non-Farm Payrolls and Unemployment data to be released by the US at the end of the week. Australia just released its RBA statement prompting the AUD to become steady. However, more high impact news will be hitting the markets this week so it is to be seen how the volatility will pan out.



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