Despite an ongoing slowdown in the pace of coronavirus contagion, new cases have only reached a plateau. The lockdowns will be followed by a very slow normalization, requiring a heavy dose of social distancing.
- The front WTI contract traded negative! Futures are below 30$ for the rest of the year. Such prices are clearly unsustainable, but efforts to put US producers on lifeblood risk keeping prices lower for longer.
- US Congress has beefed up its already huge fiscal package, while the ECB, by relaxing its collateral rules, has broken yet another taboo. Good news for creditors.
- Unfortunately governments are not moving as fast as the ECB. European Recovery Fund is in the making, but the devil will be in the details (still to be agreed). More positive vibes are required for peripheral spreads to narrow.