CIO Market Update with Will Bartleet
CIO and multi-asset portfolio manager at Pacific Asset Management
The week started with the news that German Chancellor Merkel has been put into quarantine after contact with a doctor who had later tested positive for COVID-19. Overnight in the US, the Senate failed to pass legislation for economic stimulus after senators disagreed on how to spend the $2 trillion package.
Ahead of Monday’s market opening in the US, the Federal Reserve announced a raft of measures to attempt to counteract the economic impact of the coronavirus, including:
- The Fed will purchase mortgage-backed securities including commercial mortgage backed securities
- Provide up to $300 billion in new financing, supporting the flow of credit to employers, consumers, and businesses.
- Establish of two facilities to support credit to large employers
- Establishment of a new loan facility to support the flow of credit to consumers and businesses, enabling the issuance of asset-backed securities backed by student loans, auto loans, credit card loans.
The Federal Reserve also stated that it will soon announce the establishment of a Main Street Business Lending Program to support lending to eligible small-and-medium sized businesses.
Gold soared over 3% on the news, whilst the US dollar also rallied.
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