The fed has come out guns blazing and announcing an aggressive action to confront severe disruptions caused by COVID-19. The program aims to shield companies, households, and small businesses. In this case the fed will;
- buy treasuries and mortgage-backed securities in the amounts needed to ensure smooth market functioning and transmission of monetary policy
- establish $300 billion new credit programs for employers, consumers and businesses
- Establish 2 facilities for large employers – One facility for new bond and loan issuance and one for secondary market facility for outstanding corporate bonds.
Oil prices fell on Monday for the fourth straight week escalated by global lockdowns as governments rush to curb the spread of coronavirus. Further, major airlines; Etihad, Fly Dubai, Abu Dhabi, and Turkish Airlines have halted their flights temporarily for an initial period of two weeks further straining oil demand. Asia braces for more energy demand destruction as nations lock down cities. Asia’s developing countries ex-China account for 14% of global oil demand.
Across European markets stocks plummeted 4.5% as they reopened early Monday with the commodity markets seeing heavy selling. Finance ministers from G20 are working closely with the International Monetary Fund and the World Bank to coordinate their actions to the worsening coronavirus pandemic. In the recent past, Central banks have come to the rescue of the domestic economies from external shocks.