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The final shock

Weekly investor research

09 March 2020

Lebanon announced a moratorium on its sovereign debt. Argentina’s inflation declined as the government prepared its offer to re-profile its debt. Ratings agency Standard and Poor’s maintained Ecuador’s credit rating at B- with a stable outlook. Economic activity continued to normalise in China as the number of COVID-19 cases declined. Brazil’s GDP growth rate increased and the Central Bank sold USD 5bn via swaps. Ukraine appointed a new Prime Minister in a government dominated by technocrats. South Korea announce more fiscal stimulus. Indian manufacturing held up well in February. Bank Indonesia supported the local market. South Africa’s current account deficit narrowed sharply. Sri Lanka announced new elections for 25 April. In the global backdrop, oil prices declined sharply as Russia and Saudi Arabia entered a price war following a failure of OPEC+ meeting to agree on production cuts. The Fed eased policy, but other developed market central banks have less room to act. The latest economic data in the United States held up, but it remains to be seen if this will continue. Joe Biden emerged as the front-runner for nomination for Democratic Party candidate. Finally, the International Monetary Fund (IMF) pledged USD 50bn of funding to Emerging and Frontier economies deemed to be vulnerable to coronavirus.

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