- As new Covid-19 cases flatten out, governments prepare to lift their lockdowns. This will ease economic pain, but it is a fragile enterprise, given the risk of resurging infections.
- The global economy is headed for its worst slump since WWII, with the recovery set to be protracted and inflation to remain extremely low.
- Bold and timely responses by fiscal and monetary policy help to cushion the fallout, supporting risk sentiment and Credit markets in particular.
- European leaders seem set to agree only on a soft form of intra-European burden sharing. Managing the Economic and Monetary Union (EMU) sovereign risk will remain largely in the hands of the ECB, which seems determined to deliver.