Moody’s assumes that the coronavirus dents optimism just as global economy showed signs of stabilization. The rating agency has revised global growth forecasts down by two-tenths of a percentage point.
Key notes
- Coronavirus creates new risks to prospects of incipient stabilisation of global growth this year resulting from truce in US-China trade war.
- Expects G-20 economies to collectively grow at annual rate of 2.4% in 2020.
- Revised downward GDP growth forecasts for China to 5.2% in 2020, and maintains an expectation of 5.7% growth in 2021.
FX implications
Markets are on alert which likely supports the yen, weighs on AUD/JPY and caps advances in the commodity complex, albeit the technical outlooks are bullish for the CRB index which is breaking higher to test critical resistance.
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