Snapshot

Janet Mui: weekly economic update 6 March


  • Investors are increasingly fearful that the coronavirus will significantly depress global economic growth. 
  • We have seen a co-ordinated central bank response to the crisis. The Fed, the Reserve Bank of Australia and the Bank of Canada have all cut rates. The BoE, ECB and BoJ have all signalled they are ready to provide support, though they have less room to cut rates.  
  • The Fed's 50bp cut takes the US policy rate to a range of 1.0 - 1.25%. This was the Fed's first "emergency" rate cut since the financial crisis. Markets expect further easing. 
  • Governments are also considering fiscal stimulus measures. Italy, for instance, is weighing up a 6 billion euro support package for its economy. 
  • Markets remain cautious. It is still far from certain that the virus can be contained. Investors also have concerns about the effectiveness of a monetary response to a public health crisis.
  • We remain cautiously optimistic. Prior to the crisis, global economic momentum was improving. We think the coronavirus will delay, rather than derail, this recovery.
  • Global economic growth will be lower in the first half of the year. However, we expect activity to pick up in the second half, supported by a robust response from central banks and increased government spending .

Important Information: This communication is marketing material. The views and opinions contained herein are those of the author(s) on this page, and may not necessarily represent views expressed or reflected in other Schroders communications, strategies or funds. This material is intended to be for information purposes only and is not intended as promotional material in any respect. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. It is not intended to provide and should not be relied on for accounting, legal or tax advice, or investment recommendations. Reliance should not be placed on the views and information in this document when taking individual investment and/or strategic decisions. Past performance is not a reliable indicator of future results. The value of an investment can go down as well as up and is not guaranteed. All investments involve risks including the risk of possible loss of principal. Information herein is believed to be reliable but Schroders does not warrant its completeness or accuracy. Some information quoted was obtained from external sources we consider to be reliable. No responsibility can be accepted for errors of fact obtained from third parties, and this data may change with market conditions. This does not exclude any duty or liability that Schroders has to its customers under any regulatory system. Regions/ sectors shown for illustrative purposes only and should not be viewed as a recommendation to buy/sell. The opinions in this material include some forecasted views. We believe we are basing our expectations and beliefs on reasonable assumptions within the bounds of what we currently know. However, there is no guarantee than any forecasts or opinions will be realised. These views and opinions may change.  The content is issued by Schroder Investment Management Limited, 1 London Wall Place, London EC2Y 5AU. Registered No. 1893220 England. Authorised and regulated by the Financial Conduct Authority.

Contact Schroders Wealth Management

To discuss your wealth management requirements, or to find out more about our services and how we can help you, please contact:

Marc Brodard

Marc Brodard

Head of Private Clients - Switzerland
Telephone:
marc.brodard@schroders.com