Outlook for Latin America and the Caribbean: An Intensifying Pandemic (IMF Blog, 6 min read) The region has become the new global epicentre of COVID-19. The Fund now expects the region to shrink by 9.4% in 2020, which is four percentage points worse than their April projection. A mild recovery+3.7% is forecasted in 2021. [Bearish Latam Growth]
Is determining the shape of the global economic recovery much ado about nothing? (Invesco, 3 min read) The shape of recovery will be varied across different sectors of the economy leaving the debate over U, V, W of limited relevance for markets. As slow recoveries and accommodative policies are better for financial markets Invesco sees another long market cycle ahead for the US.
Financial Conditions Have Eased, but Insolvencies Loom Large (IMF Blog, 5 min read) ‘The recession could be deeper and longer than currently anticipated by investors. There could be a second wave of infections, with ensuing containment measures. Geopolitical tensions or broadening social unrest in response to rising global inequality could lead to a reversal in investor sentiment. Finally, expectations about the extent of central banks’ support could turn out to be too optimistic’.
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