Thursday 5th March 2020

Equities and the US dollar have bounced back today, even if bond yields remain low. On today’s Morning Call NAB’s David de Garis suggests the markets are being driven by hope that government’s will follow the lead of their central banks and respond to the virus emergency with stimulus packages to protect their economies. Australia and the UK have both said details will be available soon – two currencies showing gains today – whereas Europe is a little more cagy, with the Euro losing ground. Meanwhile, the Bank of Canada has followed the Fed’s lead with a 0.5 percent rate cut and Guy Debelle, at Senate Estimates last night, reaffirmed that the RBA will look at QE after a further quarter percent rate cut. So, how low will the central banks go and how big will government spending be?