For Global Markets, Next Test Is Whether Virus Rates Rise Again

For Global Markets, Next Test Is Whether Virus Rates Rise Again

Asia may start the week positively following U.S. gains Friday. "A month ago, our conversations with investors centered on how much downside was left in this bear market and how low the equity markets would trade in the inevitable 're-test' of the March lows.. Today, the conversations are quite different, as most investors are no longer of the view that equity market will re-test those lows". Federal Reserve and the European Central Bank "have been pumping cash into their economies, into the market, just to prevent the slide of economic slowdown.. "Much more cash will need to be pumped, because the markets and the economy got used to it, to so much cash". The move also reaffirmed the deepening dependence of equity markets on central banks as they started pricing in the possibility of the Federal Reserve moving rates into negative territory ". The focus of investors will remain on corporate earnings and the efforts of governments in easing lockdown measures".