Trading Themes in 2021 - Full recovery of the global economy

ATFX

Publish date: Wed, 10 Feb 2021, 04:54 PM

After the roller coaster ride witnessed in the markets in 2020, we can comfortably say that 2021 carries forward many of the aspects of last year’s market. However, 2021 has ushered in some changes such as the ongoing rollout of COVID-19 vaccination programmes in many countries. Most investors are optimistic about the recovery of the global economy driven by the vaccination programmes that promise to restore the normal rhythms of life. The volatility witnessed in the global financial markets last year is also likely to carry over into 2021 giving traders excellent trading opportunities.

Full recovery of the global economy

Although the uncertainty of the pandemic is still there in 2021, global vaccination programs have been initiated, and the ability to respond to the epidemic is improving. What remains unchanged is that governments and central banks will continue to provide fiscal and monetary policies to support the economic recovery in the post-pandemic era. Although the global economy is not expected to fully return to normal in 2021, the expected growth will create new opportunities for everyone.

It is just the extent and progress of the recovery that largely depends on the extent to which the coronavirus pandemic is truly controlled. That is to say, economic growth can be accelerated in an all-round way only when the majority of people have been vaccinated. Therefore, the progress of the vaccination campaigns also determines the speed of economic recovery in various countries. With the improvement of the economy, it means that the prices of risky assets and commodities are likely to increase, but this does not imply that safe-haven assets will collapse.

On the whole, the pace of global economic recovery will be accompanied by twists and turns, while reflecting differences. Among the major economies, China is expected to remain the main force leading the global economic recovery, and the United States is expected to fully recover as the new government brings more fiscal stimulus. The arrival of the new US president, could signal the return of global multilateral trade, which means that at the political level, this will create a favorable environment for the global economic recovery.

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