With an increasing number in cases of Coronavirus pandemic in the globe, words like recession and credit crisis is on the lips of every forecaster these days. Governments around the world are caught flat-footed with frequent dips and falls in major industries.
In what seemed like a blink of an eye, everything around changed without recognition! The streets are empty with occasional delivery riders as many countries have announced complete and partial lockdown. The similar emptiness is noticed on the global market as well.
Speaking of the global economy, the shock was apprehended when the International Monetary Fund (IMF) estimated that Coronavirus pandemic will cause a global recession in 2020 which, in fact, will be worse than one triggered during the crisis of 2008-2009. The announcement by IMF was made on 23 March 2020. Managing-Director of IMF, Kristalia Georgieva, is already welcoming extraordinary actions taken by several nations boosting health systems as well as protecting companies and workers around the globe.
Fear of Coronavirus impact on the global economy can now be recognized in the real market worldwide with plunged stocks and bonds. To understand the impact, these 6 charts will help us surmise how is trading market reacting to the virus outbreak.
Major financial institutes and banks are led to cut their forecast amid virus outbreak. One of the reports, shared by Economic Co-operation and Development depicts ‘DOWNGRADED’ growth for almost all economies for the year 2020.
The manufacturing sector in China along with the rest of the nations has been hit badly by the COVID-19 outbreak. Factory activity in China contracted in February 2020 with a record-low reading of 40.3.
A similar trend is seen in Vietnam, South Korea and Singapore.
Well, people are not unaware of the drastic fall in the oil price. With the production cut by OPEC and OPEC+, the demand for oil drastically changed as the prices reduced to multi-year lows. One would be amiss to ignore the unspoken oil clash between Saudi Arabia and Russia. The graph depicts the cold trading of same.
Stock market has been plunging in the last few weeks. As a matter of fact, major exchanges like NSE and NYSE had to shut the market when it hit record-lows in the history of trade. Seems like, bears market might continue to surround with Coronavirus.
Global investors were also driven to bid up bond prices amid global spread of Coronavirus. It resulted in yields in major economies of the globe to many inches lower. Treasury contracts also fell by a minimum of 1% in the last few weeks resulting in the historic low of around 0.3%.
While there are reassuring stories of economic normalization in China, the risk remains same as the infection cases are rising continuously in other parts of the world. Consumers and firms are still cautious as the global financial market is still whirling. The financial coordinates are still dropping in the international market, the hope of rising might resume only by 2021.