In this unprecedented time of high uncertainty from a sanitary and economic perspective, the different drivers at play are moving in different directions. These forces make the exercise of GDP forecasting quite tricky and not particularly helpful for the time being.

Where we stand in the crisis and what to watch: Investors have moved from underestimating the severity of the crisis (buoyant markets) to a full global escalation (with the US joining emergency measures) that has led to market disruption and over-reaction. 

Uncertainty surrounding the magnitude and duration of the global health crisis is driving volatility and testing liquidity across the world’s financial markets.

At its meeting on 12 March, the ECB disappointed market expectations by not cutting rates in the wake of the coronavirus spread. 

The race to Democratic nomination has boiled down to two candidates now, Joe Biden and Bernie Sanders with Biden being the new frontrunner based on delegate count, market expectations and national polls.

At the time we are writing major losses are occurring in risk assets, with equity indexes in Europe opening down today to around -6 to -8% and volatility spiking (VIX index above 40, a rare episode). Demand for safe haven assets has surged to record levels with the US Treasury Yield dropping down to a new record level below 0.4% and gold touching a 7 year high above $ 1,700. The recent reaction reflect fears of increasing spreading of the coronavirus at European and global levels and the increased uncertainty on the economic outlook, with the news on falling oil prices adding to this uncertainty.

Risk factors, Macroeconomic context, Macroeconomic picture by area and Macro and Market forecasts.