Selected market news

Risk sentiment continued to be supported by further evidence that the virus has peaked in most countries in Europe. In Asia, most equity markets are rising following the significant increase in the US yesterday, where the S&P 500 rose 7%. On virus developments, the US has seen improvements in recent days in the growth of infections and deaths. The UK is behind the rest of Europe and yesterday Prime Minister Boris Johnson was taken into intensive care due to complications from his coronavirus infection. Risk sentiment in Asia was also boosted by better-than-expected reporting by Samsung, the Korean chip maker, as COVID-19 increased chip orders from datacentres helping to connect millions of people stuck at home globally.

As the coronavirus is increasingly getting under control in Europe, countries are starting to present their ‘exit strategy’ from the strict lockdown measures. Yesterday the Danish Prime Minister announced that she expects to open day care and schools up to 5th grade from 15 April, but that all restrictions on businesses and travel will remain in place until at least 10 May. More employees will be allowed back at the workplace, but not all. This opening will help businesses suffering from lack of labour, but those still shut down represent around 10% of total employment, so the opening will far from restore the economy. If most of the remainder is opened from 11 May, we could still reach our optimistic forecast of -2.5% GDP growth in 2020.

In Austria, Chancellor Sebastian Kurz also introduced the country’s ‘exit strategy’ yesterday. From 14 April, small shops will be allowed to reopen as well as state parks but with tight entry controls. From 1 May, all shops, shopping centres and hairdressers will be allowed to open. Schools are also expected to reopen by the start of May. Restaurants, hotels and bars are set to remain closed until further notice.