Expect stimulus to counter coronavirus threat

We are likely to see a significant fiscal and monetary stimulus across the UK, eurozone and US in the coming days — lots more spending (e.g. tomorrow’s UK budget), and probably significant easing by the Bank of England, ECB and Fed (presumably measures to increase the flow of cheap credit to cash-strapped businesses and individuals, rather than pointless discount rate cuts).

But all of that could be a temporary markets steroid unless the spread of virus is decelerated.

So what really matters are stats on daily increases in infections, and whether what is happening in China and Korea — namely a sharp slowdown in new Covid-19 cases — is artificial suppression or genuine victory.

All eyes are therefore on the Italian lockdown and how effective that will be.