The Federal Reserve has come to the rescue of consumers and the productive fabric by announcing that it will buy assets unlimitedly as long as necessary. This would be the American version of Mario Draghi's "whatever it takes". The effect of the announcement, however, has been ephemeral; futures have dried up the greater than 3% losses that accumulated, and Wall Street opened with gains of around 1.5% until it all went back into the red. To give consistency to this decision, the leg that the legislators are working on is missing, which is a number of measures worth $2 trillion. However, if all of these measures are important, it is even more important to know how the pandemic will develop across the United States. Monetary and fiscal measures are used to save time, so that there is a day 1 after COVID-19.
The announcement made by the Federal Reserve will lead to a further increase in its balance and this was greeted negatively by the greenback, which fell 1.5% after reaching a maximum of 1.0635. It must be remembered that the turning point was just a couple of weeks ago at levels of 1.1447, since then it has fallen by about 6% in the heat of the announcements made by the ECB and the various governments in the area.
For today's session, no macro figure stands out. Tomorrow we will be very attentive to the activity figures measured by the Markit PMI. Thus we will have an initial figure of the impact of the pandemic on activity levels in the Eurozone. The area as a whole is expected to drop in manufacturing and services activity to levels of 39 from 49.2 and 52.6, respectively (figures for February). The market consensus forecast seems quite optimistic, we expect the data to be worse than the consensus estimates.
Goldman Sachs has updated its forecasts for 2Q20 GDP in the United States, where it expects it to contract by 24%, and -1% for the whole year. In Germany the government is working on GDP contracting by 5% in 2020.
