Snapshot Review of Financial Markets

Monitoring of Russian Economic Outlook. Moscow. IEP. 2020. No. 7, pp. 34-46

13 Pages Posted: 8 May 2020

See all articles by Alexander E. Abramov

Alexander E. Abramov

Gaidar Institute for Economic Policy

Alexander Radygin

Gaidar Institute for Economic Policy; Russian Presidential Academy of National Economy and Public Administration (RANEPA) - Institute of Applied Economic Research

Maria Chernova

Russian Presidential Academy of National Economy and Public Administration (RANEPA) - Institute of Applied Economic Research

Andrey Kosyrev

Russian Presidential Academy of National Economy and Public Administration (RANEPA)

Date Written: May 5, 2020

Abstract

Over the past week (from April 3 to April 9), a ‘rebound’ was observed in the oil and gas markets that had to do with the expectations of an agreement being reached on oil production cut in the OPEC+ format, alongside hopes for passing negative peaks in coronavirus statistics in the USA. The adoption of massive financial relief programs worldwide helped sustain the bond markets and banks. The yield spreads even of risky sovereign and corporate bonds over government bonds have declined markedly. A certain euphoria could be felt on the markets. However, a lot of factors suggest that this respite for financial markets will be temporary. This week the market received a wave of alarming information related to a serious recession in the world’s biggest economies, expected for the most part to start from Q2 of this year. Obviously, this piece of news will be followed by negative information concerning the financial statements of corporations. All this is likely to produce yet another downturn in the financial asset markets. The risks of a massive capital flight from the debt market are still there. At this stage, the main support measures in many countries aim at preventing big companies’ defaults and maintaining the viability of small and medium-sized businesses.

Keywords: Russian economy, bond market, coronavirus-induced crisis, financial assets market

JEL Classification: G14, G32, G15, E44

Suggested Citation

Abramov, Alexander E. and Radygin, Alexander and Chernova, Maria and Kosyrev, Andrey, Snapshot Review of Financial Markets (May 5, 2020). Monitoring of Russian Economic Outlook. Moscow. IEP. 2020. No. 7, pp. 34-46, Available at SSRN: https://ssrn.com/abstract=3593847

Alexander E. Abramov (Contact Author)

Gaidar Institute for Economic Policy ( email )

3-5 Gazetny Lane
Moscow, 125009
Russia

Alexander Radygin

Gaidar Institute for Economic Policy ( email )

Gazetny pereulok, 3-5
Moscow, 125993
Russia

Russian Presidential Academy of National Economy and Public Administration (RANEPA) - Institute of Applied Economic Research ( email )

Russia

Maria Chernova

Russian Presidential Academy of National Economy and Public Administration (RANEPA) - Institute of Applied Economic Research ( email )

Russia

Andrey Kosyrev

Russian Presidential Academy of National Economy and Public Administration (RANEPA) ( email )

Vernadskogo Prospect 82
Moscow, 119571
Russia

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