Corona upate – virus is active, buying mood unbroken

Around the globe, the number of confirmed virus infections exceeds the 20 million mark for the first time – India replaces the USA

The economic recovery in the USA and the EU is continuing, although the momentum is already slowing down – foreign demand is lagging behind

Overall market: The buying mood of investors is unbroken, with good demand for riskier bonds in particular.

According to data from Johns Hopkins University, the number of confirmed viral infections reached the 20 million mark for the first time on a global scale earlier this week. More than half of all those infected are concentrated in just three countries: the US with around 5.1 million, Brazil with around 3.1 million and India with around 2.3 million. In view of the new infections, the loss of momentum at global level has continued so far.

Recent economic data published in the United States have confirmed that the economy is recovering, but the momentum is slowing down. In our opinion, the future growth path will depend to a large extent on the negotiations on an economic stimulus package. However, the latest labour market report, which showed a job creation of 1.8 million jobs, has reduced the urgency for a rapid adoption of a fiscal package.

The order books of German industry are filling up again. Orders received in June rose by 27.9 percent compared to the previous month. A look at the year-on-year comparison shows how the corona crisis continues to affect order intake. According to this, orders were still 11.3 percent below the level of June 2019. In this context, it is interesting to note that orders from abroad are lagging behind developments in Germany.

It seems that investors are not letting anything spoil their buying mood at present. Even the discussions about renewed lock-down measures due to the partly rising new corona infection figures have not harmed demand, especially for riskier bonds. In recent days, risk premiums have narrowed almost evenly across all maturities. With regard to rating indices, it is clear that riskier bond segments have been at the top of investors‘ shopping lists.

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