Local and international equity markets continue to take comfort from the prospect of vaccinations bringing the coronavirus pandemic under control

The first coronavirus vaccinations are underway, and in many countries (including New Zealand) the economic bounceback from the initial lockdowns has been stronger and faster than earlier expected.

It is not surprising that earlier this month the Reserve Bank of New Zealand has provided further monetary policy support to help with what is likely to be an extended period of post-COVID-19 recovery

Here the virus remains well-contained, but overseas there has been a resurgence in cases across a wide range of countries. However, the latest analysis is that the global economy will still recover in 2021.

as demonstrated by the impact of the recent cluster of new cases in Auckland and the resultant business restrictions. At the moment, the consensus view is that both the global and local economies will gradually pull out of the COVID-19-induced recession, but it will be a long and slow haul, with ongoing risk of relapse. Given the ongoing uncertainty, extensive diversification and other defensive portfolio insurance will be central to good outcomes.