Hopes of possible cure for coronavirus leads to boom in world markets

Hopes of possible cure for coronavirus leads to boom in world markets

- The possibility of finding the cure to the coronavirus has sparked a wave of optimism among market analysts

- On Friday, March 13, 2020, there was an upsurge in Treasury yields, stocks and oil prices

- Central Banks in three countries have reduced interest rates, purchased government bonds and initiated expansionary measures

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The possibility of a cure for the coronavirus which has affected thousands of people around the world and led to a loss of lives has rekindled faith in stock markets.

Information available shows that Treasury yields, stocks and oil prices rebounded on Friday, March 13, 2020.

Investors consequently praised central banks for increasing liquidity and are optimistic that a rescue package is underway.

READ ALSO: GIPC to review $10 billion FDI target as coronavirus disrupts international trade and investments

Business Insider reports that central banks in Norway, Japan, and Australia reduced interest rates, purchased government bonds and initiated expansionary measures.

United States’ House of Representatives is expected to vote on legislation that would increase employment benefits, ensure free tests, guarantee 14 days of paid sick leave and offer support for poor Americans as well as struggling businesses.

The country’s lawmakers are also in the process of initiating sweeping measures that could reduce the economic impact of the coronavirus.

Investment analysts are therefore carefully optimistic about a coordinated global action to combat the coronavirus.

Presently, the central bank of Norway has reduced interest rates and boosted the liquidity of the market.

Per a Financial Times report, the Bank of Japan has also purchased government bonds worth billions and the Reserve Bank of Australia injected almost $6 billion into the country’s financial system.

READ ALSO: Meeting on coronavirus held every 3 years postponed because of coronavirus

Meanwhile, the increase in the spread and effects of the coronavirus led to a $6 trillion fall in the value of world stocks.

This has set in motion the possibility for the worst weekly fall since the 2008 global financial crisis. YEN.com.gh understands that current trends show a continuous slowdown in value as the main markets in Europe experienced a 3% to 5% slump.

Reuters reports that hopes of the coronavirus being a thing of the past in a few months have been shattered.

This was hinged on a belief that economic activities would quickly return to normal but an increase in global cases has affected plans.

United States of America (USA)’s Federal Reserves are expected to cut interest rates soon and other major central banks are expected to follow suit.

READ ALSO: Coronavirus: Banker calls on government to ignore China and produce more to feed Ghanaians

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Source: Yen.com.gh

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