Due to the epidemic, more investors turn to Asian bond markets, The Fed allows non-profit companies to borrow money from them

In Daily Market Review, English
20 7 月, 2020

Due to the epidemic, more investors turn to Asian bond markets
As many countries around the world print money during the epidemic, it is relatively easy for investors to obtain cheap funds in the market. In addition, many investors believe that after the outbreak of the epidemic in many major industrial countries, it will be difficult for their economies to recover in the short term. For this reason, many investment funds have been redirected to the bond markets of Asian countries that have been well controlled in terms of the epidemic. In addition to China’s earlier announcement of the historical inflow of overseas investment into its bond market in June, in fact many Asian countries’ bond markets have also benefited from overseas capital inflows in recent months. According to the bond market data collected by Reuters from Indonesia, Malaysia, Thailand, South Korea, India and other countries, it is found that in the entire June, the net inflow of the five countries’ bond markets was as high as 6.45 billion U.S. dollars, which is the highest from June 2019.

The Fed allows non-profit companies to borrow money from them
The Federal Reserve announced that it would allow these non-profit companies to directly borrow money from the Federal Reserve. The Federal Reserve stated that these non-profit-making companies suffered a severe blow to their income due to lack of assistance during the epidemic, and it was difficult to borrow money from commercial banks. If they did not help, they might go bankrupt at any time. By then, it may affect 30,000 jobs, which is equivalent to about 10% of the labor market in the United States. However, in the announcement, the Fed did not indicate how much funds will be used for this operation. As to whether the funds lent to non-profit organizations can eventually be recovered, I believe it will also be a big question.


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