Knowledge and Insight - Global economy

This week has seen harrowing atrocities committed by the terrorist group Hamas against Israeli civilians. With so far more than 1,200 people reported to have been killed, this is the most serious cross-border attack Israel has faced in decades.

A regional bank caught up in the March banking crisis has been forcibly sold by an American regulator. Hopefully this marks the end of the chapter.

Stocks and bonds ended the month – and first quarter – nearing the top ends of the trading ranges in place since late last year. But there’s still much uncertainty about the inflation and growth outlook, particularly if energy prices start rising again.

Strong gains for Europe’s banks last week were reversed by Friday’s close. With the fear bug spreading, can we be confident it won’t strike again?

We look back at a grim year for financial markets. The rebound in the last few months seems to offer investors some relief, but can we be confident that the worst is over?

After a stunning second quarter for economic growth and corporate profits as the world started opening back up again, investor optimism has been tempered. Growth is slowing down in China, the first major economy to regain its lost output, and the global economic recovery seems to be coming off the boil too. Still, we think going from great to merely good will still be good enough.

Resurgent growth in the post-COVID world has rekindled talk of the next ‘supercycle’ for industrial commodities. But beneath the headlines, the reality is that this demand is likely to pale in comparison with the driver of the original supercycle.

Investor optimism spread over the second quarter as economies around the world continued to reopen and many aspects of our lives returned to normal. Successful vaccination programmes and stimulus measures across the developed world improved the global outlook.

This year has started off on a positive note, with vaccination programmes making rapid progress and keeping investors optimistic about the prospects for the global economic recovery. While bond markets experienced some volatility during the first quarter, the situation stabilised towards the end of the period.

Financial markets have been on a rollercoaster over the past year. There was a sharp drop in March as countries locked down and then a swift upswing followed, led by technology shares. Even unloved companies, particularly banks and energy firms, have rebounded lately, thanks to good news about vaccines.

As COVID-19 continues to affect our lives and influence economic activity around the world, there’s lots of uncertainty about what the future holds. Localised outbreaks and lockdowns are possible anywhere until a vaccine is found, with the level of unemployment likely to be the key factor driving the pace of the recovery over the next couple of years.

Our lives have been turned upside down by the coronavirus crisis, which is having a profound impact on the global economy and financial markets. Governments are working hard not just to slow the spread of the virus but also to help businesses and their employees. They've announced a range of extraordinary measures, which are being supported by action from central banks.