Risky assets rallied in June

The Asian economies reopened in March, and most western economies began reopening at the beginning of May, meaning that the reopening has currently lasted 2-4 months.

This is reflected in a strong turnaround in some economic indicators. Generally, business and confidence indicators have regained most of the ground lost during lockdown. In terms of the reopening process, the Asian business sector has generally recovered ground more quickly than the households have, whereas the opposite has been true for large parts of the western economies.

Albeit of a different nature, this has left potential/backlogs in both regions. Global business relations and supply chains should still be considered far from normal. Based on the current situation, the reopening is likely to span over the rest of 2020, depending of course on the spread of the coronavirus. This scenario suggests that the economic indicators could reinforce the strong turnaround from April/May, when Europe and the U.S. reopened. This will happen at a slower pace, which is the natural pattern when an upswing is replaced by a period of expansion.

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