Firstly, what is a stimulus package?

A stimulus package is a umbrella term used when Central banks try to boost their economies in times of economic stress. This is mainly implemented by buying bonds, tax rebates and lowering interest rates which all inject liquidity into the economy and encourage spending/ borrowing.

The ECB’s PePP stimulus package announcement on Thursday led to a broad rally across asset classes. The package will inject the necessary funds into companies battling with unemployment whilst lowering the cost of borrowing to allow businesses to continue growing. Emerging Market equity indices were up across the board with what seemed like a turning point for markets. It is expected that as tourism restrictions are lifted in Emerging Market travel, nations such as Turkey and South Africa will also start to recover.

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