The coronavirus pandemic triggered an unprecedented decline in the world trade volume, which declined 16.2% YoY in April, according to the CPB’s World Trade Monitor. All regions reported a fall in trade volumes, but the Euro Area was the hardest hit. As April was affected by the most widespread and stringent lockdown measures globally, trade volumes were negatively impacted by disruptions to production and logistics as well as less demand globally. According to the IMF’s latest World Economic Outlook, world trade could contract by as much as 11.9% this year, which translates into a 4.9% decline in GDP. The organisation’s forecast suggests that it will take a considerable time for the world to recover lost output, as the IMF expects a modest 5.4% recovery in GDP in 2021.
The economic diary contains quite a few relevant macro data releases this week. Investors will scrutinise PMIs all over the globe as well as Fed’s minutes and the latest labour market metrics in the US. In addition, the news flow related to the spread of the coronavirus, the re-opening or closing of economies and the geopolitical tensions between the US and China could meaningfully shape global appetite for risk assets.
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