Money Minute Monday 15 March: the virus and the damage done

After a historic week for markets, Money Minute looks forward to measures from governments and central bankers to cope with the coronavirus, and data on the damage done in Asia.

Good morning and welcome to Money Minute, your comprehensive preview of this week’s biggest financial stories.

Last week was a historic week for markets. Following in the footsteps of the Federal Reserve, the Bank of England slashed the UK’s key interest rate to just 0.25%, while Rishi Sunak’s first Budget unveiled a host of measures to tackle coronavirus disruption with extra government spending.

Meanwhile, the European Central Bank took steps to prop up the eurozone banking sector, which were followed by moves from the wider European Union to encourage member states to boost spending – which Germany very much took the lead on, guaranteeing unlimited liquidity to companies where necessary.

Amid all that, many global markets – including the UK – saw some of their worst falls on record, and we entered a pretty comprehensive global bear market (where markets have fallen by 20% or more from their most recent highs).

So what does this week hold?

Everyone will be keeping a close eye on coronavirus infection figures across the globe. We can almost certainly expect the news on that front from both the US and most European countries to get progressively worse. The key for managing expectations will lie with hopes that the infection numbers coming out of China continue to improve, and that the rate of infection in Italy slows down.

As for economic data, we should start to get a proper look at just how much damage has already been done, particularly in Asia. The Bank of Japan is expected to cut interest rates when it meets on Thursday. The economy has been hard hit by coronavirus, with tourism, exports and consumption all impacted.

And in the US – crucially – the Federal Reserve is expected to slash interest rates yet again, perhaps even as far as 0% when it next meets on Wednesday. With the sheer volume of fiscal and monetary stimulus hitting the markets, it will be interesting – to say the least – to see where we are this time next week.

Stay calm, wash your hands, and have a good week!

Recommended

How the UK can help solve the semiconductor shortage
UK Economy

How the UK can help solve the semiconductor shortage

The EU’s plan to build a semiconductor manufacturing industry will fail, but the UK should take advantage of that, says Matthew Lynn
26 Sep 2021
The charts that matter: China upsets cryptocurrency markets
Global Economy

The charts that matter: China upsets cryptocurrency markets

Bitcoin slid again this week after China declared all cryptocurrency transactions illegal. Here’s what’s happened to the charts that matter most to th…
25 Sep 2021
How to cut your energy bill this winter
Personal finance

How to cut your energy bill this winter

Gas and electricity prices have risen by more than 250% so far this year. And they’re likely to go higher still Saloni Sardana looks at what can you …
24 Sep 2021
Cryptocurrency roundup: China’s crackdown intensifies
Bitcoin & crypto

Cryptocurrency roundup: China’s crackdown intensifies

Most major cryptocurrencies suffered falls this week as China cracked down even harder, while the Evergrande crisis rattled global markets, including …
24 Sep 2021

Most Popular

A nightmare 1970s scenario for investors is edging closer
Investment strategy

A nightmare 1970s scenario for investors is edging closer

Inflation need not be a worry unless it is driven by labour market shortages. Unfortunately, writes macroeconomist Philip Pilkington, that’s exactly w…
17 Sep 2021
Two shipping funds to buy for steady income
Investment trusts

Two shipping funds to buy for steady income

Returns from owning ships are volatile, but these two investment trusts are trying to make the sector less risky.
7 Sep 2021
Should investors be worried about stagflation?
US Economy

Should investors be worried about stagflation?

The latest US employment data has raised the ugly spectre of “stagflation” – weak growth and high inflation. John Stepek looks at what’s going on and …
6 Sep 2021