International financial markets breathed a sigh of relief this week, of sorts, even though the last couple of days saw some reversal of sentiment because of the US president’s less than diplomatic utterances about the People’s Republic of China. Therefore, even though safe haven investment vehicles in the currency markets, such as the Japanese yen and Swiss franc, rose the last couple of days, the finished the week as the worst of the lot. It seems that the decision to relax lockdowns across the world is beginning to do the trick for financial markets as even oil spent much of the week rallying; signifying confidence in its immediate outlook for the global economy. All that needs to be done now, from the looks of things, is to keep the American president heeled enough to control his unwarranted outbursts, especially since China is perhaps the best performing nation in the world at the moment as far as the fight against the coronavirus goes. Yet this is also precisely the time when nobody can afford to be complacent. The downside of these few days, that is the number of new infections, will not be known for at least another two weeks. And it could well be a case of ‘one step forward, two steps back’ if it turns out that social safety procedures were not implemented and practiced to the degree needed. Going by our own example in Pakistan, scenes of people thronging to markets in large crows, as if bent upon violating social distancing rules, we should be psychologically prepared for some bad news sometime down the road. And that, of course, will do the market no favours either. Therefore, the best bet seems to be putting our best foot forward and making sure that basic safety measures are implemented no matter where we go or what we do and everything, including the all-important market, will be just fine. Truth be told, international financial markets – usually a reliable indicator of where things are going – have been uncharacteristically decoupled from the real economy over much of the past few weeks. They posed record gains even as the world’s biggest economies were registering their worst economic indicators in decades, if not centuries. The best explanation that analysts have been able to come up with is desperation. With the coronavirus bringing an entirely unexpected type of economic shutdown, markets have been quickly incapacitated and are, for want of a better word, really desperate to turn things around; plus there was also the opportunity for some bottom fishing as stocks and commodities hit record lows. And this reversal would have brought some smiles on faces of people suffering from low or no incomes. Yet it remains to be seen if the optimism will last. *