EU’s Gentiloni: 'V-shaped' recovery cannot be taken for granted, could be optimistic

Eren Sengezer FXStreet

European Union (EU) Economic Commissioner Paolo Gentiloni noted that they are seeing the materialization of downside risks but added it was still too soon to measure the impact of the coronavirus outbreak on the economy.

Gentiloni further noted that the 'V-shaped recovery' forecast presented a couple of weeks ago could not be taken for granted and acknowledged that this expectation is "optimistic."

"We will assess requests for fiscal flexibility under the EU rules due to coronavirus outbreak," Gentiloni added. "The EU is ready to use all policy options to safeguard growth against risks from coronavirus."

Market reaction

Markets remain risk-averse following these comments with the 10-year US Treasury bond yield erasing more than 8% and the Euro Stoxx 50 and Germany's DAX indexes both losing 0.5%.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

Editor's Picks

EUR/USD trims losses and returns to the 1.1750 area

The US Dollar resumed its decline in the American afternoon, helping EUR/USD trim early losses. The pair trades around 1.1750 as market participants gear up for the European Central Bank monetary policy decision and the United States Consumer Price Index.