Risk assets and economic data diverge in May
MONTHLY MARKET COMMENTARY |
Global risk assets continued to recover from first-quarter losses in May but broadly remain negative year-to-date. Volatility further declined toward its historical average while COVID-19 infection rates decreased and testing capabilities increased. Support for risk assets also came in the form of clear forward guidance from the Federal Reserve and global policy leaders that more easing is coming. With Congress debating additional fiscal stimulus in the U.S., the European Central Bank (ECB) expects to ease monetary policy at its June meeting by raising the Pandemic Emergency Purchase Programme (PEPP) by €500 billion to €1.25 trillion. There is even speculation the ECB may extend its asset purchase program beyond 2020.
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