Forex Weekly Look Back: Governments and regulators take measures to counter the corona-crisis

Looking back at the most intriguing and popular Forex industry news from the past week at LeapRate.

Goldman Sachs Group Inc injected over $ 1 billion into two of its prime money-market portfolios last week due to heavy investor withdrawals, filing with the US securities regulator reports. The Wall Street bank bought $722.4 million assets from its Goldman Sachs Financial Square Money Market Fund and $301.2 million from its Goldman Sachs Fund Square Prime Obligations Fund. The bank repurchased securities from the two funds after investors withdrew a net $8.1 billion from them last week during a four-day stretch.

The government of Japan and the ruling coalition are considering an emergency economic package worth over ¥30 trillion ($270 billion) to counteract the impact from the Covid-19 outbreak. The emergency package could include cash and gift certificates or even travel expenses. It could also provide some financing for small and midsize businesses so they can maintain employment.

Forex Weekly Look Back

The Securities and Exchange Commission announced yesterday a temporary flexibility for registered funds affected by the recent volatile market situation to borrow funds from certain affiliates and to enter into certain other lending arrangements. The relief is interceded to provide funds with additional tools to manage their portfolios so that all shareholders as investors may seek to re-balance their investments.

Australia announced on Sunday a $38 billion plan to reduce the economic impact of the coronavirus outbreak. Small businesses and non-profit organizations will receive cash aid of up to AU$100,000. Unemployment payment will temporarily double and pensioners will receive AU$750. Workers with reduced income by at least 20% because of the outbreak will have access to their retirement funds early. Those facing hardships will be allowed to withdraw up to AU$20,000 over two years.

The Securities Commission Malaysia (SC) announced today the addition of further relief measures which will immediately benefit 231 licensed entities, 30 registered audit firms and 9663 licensed individuals. The measures aim to lessen the cost burden of capital market participants and add to the wider relief effort announced by the government, the Economic Stimulus Package 2020, which was announced.

HM Treasury, the Bank of England (BoE), and the FCA also announced measures assist bank lending, help businesses and protect jobs in Covid-19 outbreak. COVID Corporate Financing Facility (CCFF) will provide additional help for large firms and Coronavirus Business Interruption Loan Scheme (CBILS) will provide government approved support for small and medium sized businesses.

The stock markets and the latest PMI figures from the US and Euro area suggest sharp economic contraction in US and Europe. The Euro area PMI composite dropped to 31.4 from 51.6, and lower than the 38.8 projected, while the US Markit PMI composite declined to 40 from 49.6. However, both the manufacturing sectors in the US and Europe performed better than expected. In the US, the drop was minimal, and we saw a decline to 49.2 from 50.7.

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