These are delicate times for markets around the world. The coronavirus pandemic it does not escape from any country and that ends up being noticed in investments of all kinds. And if the covid were not enough, each territory has to add its own idiosyncrasy and economic and geopolitical context.
For Maria Contreras, co-manager of the Santander Renta Fija fund, “sovereign debt markets have continued to perform well over the last few weeks. Despite the high volumes of issuance, the different purchase programs implemented by central banks make it very easy to absorb all the emitted paper “.
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Countries with a more diversified economy or with a greater weight in the industrial and technological sector show better stock market performance throughout 2020
All in all, “the behavior is very positive both in core bonds and in peripheral country bonds. In the latter it is even better and we have seen their risk premiums reach minimum levels not seen in months. “In the United States, to begin with,” the Democrats and Republicans still do not reach an agreement on new stimulus packages for the economy. As the date of the elections approaches, it seems increasingly complicated that it can occur, “he assures.
The EU, with three open fronts
On the other hand, “the World Trade Organization gave its approval for the European Union to establish tariffs to the United States“And it is that” in the European Union the other focus of attention is once again the increase in cases of covid-19 infections, which puts the recovery at risk again. “
To all this must be added “the new lack of agreement with the United Kingdom for Brexi. On the other hand, the European authorities have extended the period of time in which governments can continue to give help to companies due to the COVID. “
“We must be aware of the new measures of the European Central Bank, such as the extension of the Purchase Program against the pandemic”
In this context, therefore, “we will have to be aware of the new measures that the European Central Bank may establish, such as the extension of the Shopping program to alleviate the pandemic, or even a new lowering of interest rates. The market sees the latter more complicated, given the difficulties in reaching the inflation levels desired by the ECB. “In addition,” the corporate bond markets have continued to perform well, helped both by the purchase programs of the central banks and by the search for higher interest rates by other market agents “.
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