(Weekly Pandemic) Market Commentary – Rating Agencies show their teeth

Highlights:

• More countries discussing and implementing lockdown exit strategy: slow and cautious.
• Smart regulatory and monetary policy coordination in Europe aim at supporting lending.
• Fitch has cut Italy’s rating to BBB-. To raise to the sovereign rating challenge, EU governments need to better work and act together.
• Green financial shoots already? Despite dire economic and earnings news, cyclical stocks have outperformed this week. A swallow does not make a spring, but medical advances may have cheered investors up.
• Stick to long positions in safe credit and duration.

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