March was a turbulent month for global financial markets. Evidence of the Covid-19 virus spreading into Europe triggered a sharp fall in equities and other assets, combined with a liquidity squeeze as demand for USD cash rocketed. The AUD fell nearly 10c against the USD. Volatility rose across many asset classes, with equities moving up and down by 10% in a day.

These conditions continued until around the middle of the month when central banks stepped in to cut interest rates sharply and implemented programs to supply trillions of dollars of liquidity to global markets and banking systems. However, equity markets did not really take heart until a few days later when governments around the world, including Australia but particularly the US, announced fiscal packages amounting to trillions of dollars in total.

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