The New York Feral Reserve's Williams says this is a difficult time to conduct economic forecasts because the situation is evolving rapidly, Reuters news reported.
Meanwhile, analysts at ANZ Bank noted that moves in markets were not large at the start of this week, "but one does get the distinct impression that markets have got it both ways – with equities rallying on rebounding data and bonds rallying on dismal COVID-19 news."
So who will win the tussle? Markets seem to be focusing on mediocre rebounds and not levels (even after sharp bounces we are not back at pre-COVID levels of activity), suggesting bonds might have the upper hand, especially as they’re being helped along by QE. But excess liquidity means you can’t write equities off either, and liquidity will continue to be a major driver for some time.
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