Forging a lockdown exit strategy: The Global Markets FX Week Ahead Podcast

The focus in Europe is now on the timing and strategy for lockdown reversals. On this week’s podcast, Derek Halpenny, Head of Research for Global Markets EMEA and International Securities, gives an overview of the two factors which will impact this decision making: the capacity of state healthcare systems and the extent of testing for COVID-19.

Germany, Switzerland and Austria are leading the way, but the UK is trailing behind on both these fronts.

Listen for Derek’s thoughts on the timeline for these reversals and the current state of the markets. 

1. With an improvement in COVID-19 data, it’s all about the economy and lockdowns. The rate of recovery versus new cases of COVID will be key to governments’ decisions to open up - in the UK and in European countries such as Germany, France, Switzerland and Austria.

 2. Lockdowns through April and, apart from Germany, reversals over several weeks from May. Countries might reverse sector by sector but there will be significant restrictions  throughout the summer.

3.  Investors seem to have focused on the good news and equities look “pretty rich” given the risks. There might be reversals of lockdowns eg what's happened in China recently. From a FX perspective, the dollar is likely to hold at these levels.