Oil and stocks steadied on Wednesday and the dollar eased, as investors looked forward to less volatile trading, a day after world stocks recorded one of their biggest rallies in years and oil prices swung in a 10 percent range. After a strong start to the week for risk assets like stocks and oil the mood was a little more cautious, with so-called safe haven assets like the Japanese yen, government bonds and gold all moving higher. Investors will watch oil as a barometer of broader market sentiment on Wednesday, in particular how a proposal from top exporters Russia and Saudi Arabia on Tuesday to freeze output is greeted by Iran, which was absent from the talks and is determined to raise production.
Financial markets that predicted eight of the last six recessions may be yet be wrong again, but market stress itself is now part of the calculus and leaves the world more open to left-field shocks. Given the violence of this year's slump in equities, where more than $8 trillion has been wiped off global stock market values, it is remarkable how few economists still see recession as the most likely outcome.