Global stock markets fell by 12 % last week. Since the beginning of March they are lower by 23 % and since the beginning of the year even by 30 %. Of course, there is nothing else to blame but the massive spread of the global pandemic COVID19, at the moment mainly in Europe and the US.
Global corporate bond markets recorded a very negative performance last week as well diving by 9 %. Crude oil got the biggest hit sliding by additional 20 %, being down 60 % since the beginning of the year. Brent is trading around 27 dollars at the moment. Last week was probably the most significant by the fact that the global financial system began to lack US dollars as investors wanted to get safe liquidity. As a result dollar index vis-à-vis other major currencies gained 4 %. Also Czech crown sold off, declining by 4 % against euro and 8 % against dollar. The general sell off impacted Czech government bonds as well as their index lost 1 %. Overall investors were massively fleeing emerging markets. Even gold as the main safe haven lost 2 % declining below 1500 dollars. Global financial markets are not having much better time in the current week unfortunately. European equities are down by approximately 4 % at the moment. Investors are likely waiting for the moment when the numbers of newly infected get stabilized.
Michal Stupavský
Investment Strategist at Conseq Investment Management, a.s.