Asian equity markets trade in the green and the US and European futures are pointing higher today on the back of the reopening of the global economy as more and more economies are lifting lockdown measures.
UK PM Johnson was the most recent of major economies to ease measures after the number of deaths recorded was the slowest in 6 weeks.
Oil (both WTI and Brent) is trading slightly lower this morning after holding gains all through last week as the pricing in of the global oil demand recovery takes effect and as more and more oil producers committ to cut supplies in light of the oil storage capacity constrain.
The biggest dilemma facing markets currently is the type of recovery that lies ahead of us. Most analysts have scrapped the prospects of a V-Shaped recovery and are leaning more towards a U-shaped recovery. However, the unemployment figures of Friday which stood at 14.7% with a record 20.5mn lost jobs and marked the worst figures since the Depression Era, now put forth the possibility of a W shaped recovery in the fore front with many small businesses dropping out of the market altogether while other employers such as retailers switching distribution to online methods.
Other news to note is the Italian sovereign bond (BTP) rally end of last week that erased the losses caused by the German court ruling. This was on the back of the ECB rhetoric which expresses solidarity towards the union and repeats that the bond buying program will continue as it follows the upper decision of the ECJ. Moreover, Moody’s skipped the Italian and Greek credit ratings update on Friday, further supporting the price levels.
Last week we were active trading Sub Sahara sovereigns and credit which were well bid all through the week.
From the primary market on Friday the B+ rated Bahrain sovereign deal was the notable success with both 4.5y sukuk and 10 year international tenors trading both a point higher from reoffer.