The length of lockdowns and the investment outlook are inextricably linked. The length of the lockdown determines the size of the economic contraction – particularly in 2Q20 – and the impact on corporate earnings profiles. Markets are therefore welcoming the turn lower in Covid-19 curves and plans to re-open closed economies. These, along with the aggressive action of global policymakers, have combined to drag gauges of financial market risk further away from their peaks in March. Volatility levels are declining across the board and the USD Libor-OIS spread, a metric of inter-bank funding stress, is now at levels not ... (full story)