Last week, we did not learn anything fundamentally new from the global economy. The new macroeconomic data only confirmed that the global economy is currently in the deepest economic downturn since the Great Depression in the 1930s.
For Czech investors, the event of the week was Thursday's reduction in interest rates of the Czech National Bank. Czech monetary authority lowered the key interest rate, the two-week repo rate, by 0.75 percentage point from 1.0% to 0.25%. The Czech National Bank surprised the markets again, as economists expected a reduction of only half a percentage point. However, the koruna did not react much to the announcement.
It is still true that the fall in interest rates will not be a very effective remedy with the economic consequences of the current unfavorable situation, and the main burden thus lies with the government's measures. The central bank is aware of this, and the representatives of the Czech National Bank themselves describe the reduction of interest rates more as a signaling effect.
According to the broadest global stock markets index, MSCI All Country World, global stock markets strengthened by 2.4%. Relatively most successful were American shares, which according to the S&P 500 index recorded a gain of 3.5%. Bloomberg Barclays global bond index depreciated 0.8% as the average global yield to maturity increased by 0.03% to 1.05%. Commodities, on the other hand, had a relatively good week behind them, with the global S&P GSCI index adding 7.2%. The price of the North Sea Brent strengthened significantly by 17% to the level of $ 31 per barrel. However, the price of black gold has not been even on the half level since the beginning of the year.
Investment Strategist at Conseq Investment Management, a.s.