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Second, the global health crisis was triggered by a respiratory syndrome caused by the highly infectious coronavirus, which has left many people short of oxygen and with life-threatening consequences. And finally, the resulting economic crisis has strangled many economies and businesses, leaving major wounds that will need time to heal.

As is often the case, financial markets were early sensors of the crisis. At first, they signalled a breakdown in spring 2020 that dominated the subsequent second quarter of the year. One of the greatest pullbacks in global output followed, as an unprecedented lockdown paralysed the backbone of the economy – the services sector. Then, the policy response set in, scientists learnt more about the nature of the pandemic, and the public recovered from the initial panic. Now at year end, the crisis does not seem to be contained, and the fallout will keep the world busy well into next year – maybe even into 2022. Yet rays of hope have appeared, and the prospects have improved quite substantially. Medical treatments have advanced, vaccines have been developed at breathtaking speed, corporates and individuals have learned to deal with the situation, and policymakers have ramped up their efforts big time. Thus, by the close of the year, the recovery of financial markets following the March breakdown does not look as exaggerated as many had feared back in the summer. Against this backdrop, therefore, we do not see much reason to change course. ‘Stay the course’ has been the mantra and will likely remain so as this storm too shall pass.   

So this is it for 2020. Thank you for your support and inspiration in this challenging year. The first 2021 edition of our ’Research Weekly’ will be published on 5 January. We wish you a happy holiday season and a good start to the New Year.

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