March 2020

• Global markets experienced extreme volatility and historic declines in March as the coronavirus pandemic triggered a sudden global economic shutdown.
• Equity markets around the world entered bear market territory at record speed as governments imposed lockdowns and travel restrictions.
• Central banks and governments introduced unprecedented monetary and fiscal stimulus measures to stabilise financial systems and support economies.
• Bond markets experienced severe dislocations before aggressive central bank interventions restored liquidity.
• Oil prices collapsed dramatically following both demand destruction and a price war between Saudi Arabia and Russia.
• Investor sentiment deteriorated sharply before stabilising late in the month due to extraordinary policy support.

Asia (ex. Japan)

Asian markets outside Japan experienced severe volatility during March as the coronavirus pandemic spread globally and economic activity collapsed across multiple industries. China began gradually reopening parts of its economy after extensive lockdowns, though regional markets remained under significant pressure due to collapsing global demand.

Export-oriented economies such as South Korea, Taiwan and Singapore experienced sharp declines as global trade and manufacturing activity deteriorated rapidly. Governments and central banks across the region introduced emergency stimulus measures to support businesses and financial markets.

Europe

European equities suffered historic declines during March as coronavirus cases surged across the continent and governments imposed widespread lockdowns. Italy, Spain, France and the United Kingdom implemented severe restrictions that effectively shut down large portions of economic activity.

The European Central Bank responded with massive emergency asset purchase programmes and liquidity support measures aimed at stabilising sovereign bond markets and financial conditions. Investors remained deeply concerned about the severity of the economic contraction facing the region.

United States

U.S. equities experienced one of the fastest and most severe market collapses in history during March as the coronavirus pandemic forced widespread business closures and unemployment surged dramatically. Major indices entered bear market territory within weeks.

The Federal Reserve responded aggressively by cutting interest rates to near zero, restarting quantitative easing and introducing extensive emergency lending facilities. The U.S. government also approved massive fiscal stimulus packages aimed at supporting households, businesses and financial markets.

United Kingdom

UK equities declined sharply during March as the government imposed nationwide lockdown measures to combat the spread of coronavirus. Travel, financial, retail and energy sectors experienced particularly severe losses.

The Bank of England cut interest rates aggressively and expanded asset purchases while the government introduced substantial fiscal support programmes designed to protect jobs and businesses during the shutdown period.

Japan

Japanese equities experienced severe declines during March as collapsing global trade, weak domestic consumption and heightened risk aversion weighed heavily on markets.

The Bank of Japan expanded asset purchases and introduced additional liquidity measures to support financial stability, while policymakers prepared further fiscal stimulus to offset the economic impact of the pandemic.

Emerging Markets

Emerging markets experienced extreme volatility during March as global investors rapidly withdrew capital from higher-risk assets amid fears of a severe global recession.

Commodity-exporting economies were hit particularly hard by collapsing oil prices, while countries with weaker healthcare systems and external financing needs faced additional pressures.

Commodities

Commodity markets suffered historic declines during March. Oil prices collapsed dramatically following a breakdown in negotiations between Saudi Arabia and Russia, triggering a supply war during a period of collapsing global demand.

Industrial metals weakened sharply due to the sudden halt in global manufacturing activity, while gold prices experienced extreme volatility as investors initially sold assets broadly to raise liquidity before safe-haven demand later recovered.