Your morning market update from Knight Frank Research - Tuesday 7th April
Good morning
2 minutes to read
Economic headlines
Global share values climbed 5.5% overnight, the strongest showing in almost two weeks, as more signs emerge that the pandemic is easing in some of the hardest hit locations.
Tallies curated by Johns Hopkins Center for Health Security shows Spain's daily incident rate has decreased considerably during the past week, Italy's continues to decline, though more slowly. Other European nations including France, Germany and Austria are also now experiencing falls in daily new cases.
In New York state, considered to be the epicentre of the US outbreak, Governor Andrew Cuomo said deaths were showing signs of levelling off.
Meanwhile, the Chinese government will tomorrow ease travel restrictions in Wuhan, where the outbreak began.
Markets are likely to remain volatile over the coming days as investors weigh the slowing of the virus in major countries and unprecedented economic stimulus with the continued spread of the disease and worsening economic data in some locations.
The pound weakened as Boris Johnson was moved into an intensive care unit last night as a precautionary measure. Britain's three-week lockdown is likely to be extended when it ends on Monday, though the government's medical advisors say they are planning for the next phase. The UK outbreak is likely to peak during the week ahead.
Property market headlines
This morning, Oliver Knight compares current pressures on the economy and housing market with those that prevailed in 2008. Whilst it is still too early to tell the scale of the direct economic impact of coronavirus, the upheaval caused by the outbreak is not expected to be as damaging or long-lasting as in the years following the financial crisis. The underlying economic forecast we have adopted points to a contraction of GDP of 4% in 2020 and growth of 4.5% in 2021.
In Prime Central London, prices climbed 0.2% during Q1, the largest first quarter increase in five years, writes Tom Bill. The data further underlines the strength of the property market before restrictions on movement were implemented.
Kate Everett-Allen takes a closer look at fiscal stimulus introduced in the US that equates to some 10.5% of GDP, and weighs it alongside the outlook for New York residential property, where demand had been building through January and February.
Anna Ward's analysis of Covid-19's impact on construction supply chains suggests developers may accelerate strategies to rely less on international sources that were already being implemented as a result of Brexit.
Meanwhile, Andrew Shirley's Rural market update shows farmland prices have remained resilient in the face of the outbreak.
If you have any questions, please contact me, or the team.