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CIO Daily Market Update with Will Bartleet
CIO and multi-asset portfolio manager at Pacific Asset Management

A rally in equity markets was set back by the news that a record 6.6 million workers lost their jobs in America last week. This takes the two-week figure to 10 million jobs or approximately 6% of the US workforce. 

CIO Daily Market Update with Will Bartleet
CIO and multi-asset portfolio manager at Pacific Asset Management

Markets started the new quarter with another bout of volatility with equity markets reversing some of last week’s gains. President Trump issues his starkest warning yet of the “painful” upcoming period for Americans, abandoning his previously optimistic tone. The Governor of Florida also changed course, ordering Floridians to stay at home after weeks of rejecting calls to do so. 

CIO Daily Market Update with Will Bartleet
CIO and multi-asset portfolio manager at Pacific Asset Management

The final day of an extraordinary quarter for markets saw equities and bonds mixed with European equities rallying and government bonds slipping whilst the US saw equities sell-off and government bonds rallying.  

CIO Daily Market Update with Will Bartleet
CIO and multi-asset portfolio manager at Pacific Asset Management

News of a slowdown in new cases in Italy provided some hope that social distancing can control the spread of COVID-19. Although in the US, President Trump was forced to admit that life in America won’t get back to normal by Easter. More states in America issued orders instructing individuals to stay at home. 

With the Pacific G10 Macro Rates Team 

Global Macro Overview
Another week passed with more and more parts of the world coming under lockdown. It remains to be seen how much damage is going to be done to the global economy, but we started getting the first evidence of a slowdown from economic data released last week.  

CIO Daily Market Update with Will Bartleet
CIO and multi-asset portfolio manager at Pacific Asset Management

Sterling continued to rally sharply and has now reversed the losses over the past two weeks. Boris Johnson, UK Prime Minister became the first major political leader to be tested positive for COVID-19. The UK government provided advice to home buyers and renters that they should, “where possible, delay moving to a new house while measures are in place to fight coronavirus” but that there is “no need to pull out of transactions” 

CIO Daily Market Update with Will Bartleet
CIO and multi-asset portfolio manager at Pacific Asset Management

Equities rallied for the third consecutive day as investors brushed off the news that a record 3.3 million Americans lost their job last week. Federal Reserve Chairman Jerome Powell reassured the markets that the Fed will provide sufficient credit to the economy. “When it comes to this lending we’re not going to run out of ammunition. That doesn’t happen.”   

CIO Daily Market Update with Will Bartleet
CIO and multi-asset portfolio manager at Pacific Asset Management

The US Senate agreed on a $2 trillion stimulus package which equates to some 9% of US GDP. The German parliament approved a EUR750 billion package to combat the economic impact of the coronavirus. Finance minister Olaf Scholz said that its stimulus must be “timely, targeted and temporary to help the economy start again”. India joined the growing number of countries in lockdown whilst Brazilian President Jair Bolsonaro urged the country to resume normal life to protect the economy.  

With the Pacific G10 Macro Rates Team

Global Macro Overview
Financial markets experienced another turbulent week, as liquidity continued to be challenging even in the largest markets. Volatility remained elevated with the VIX staying above 70 most of the week, TYVIX (VIX for US Treasuries) at the highest levels since 2008 and various instruments (S&P futures, 30y US Treasury futures, 10y BTP futures) hitting their daily limits up and down on several occasions. While markets were evaluating damage to the economic activity, more and more regions in the developed countries were put under lockdown. 

CIO Daily Market Update with Will Bartleet
CIO and multi-asset portfolio manager at Pacific Asset Management

Equity markets soared on Tuesday in anticipation of the $2 trillion fiscal stimulus package being approved by the US senate. The Dow Jones Composite, America’s oldest index, had the largest gain since 1933. The House Democrats made a counterproposal for a spending plan that amounts to $2.5 trillion.