The economic risks posed by the COVID-19 virus are still unknown. The uncertainty initially led to a caution, and a modest sell-down of Australian shares. Shares then bounced back, as authorities in China moved to contain the virus and stimulate economic activity. Some stronger corporate results boosted the bounce.

New cases of infection in other countries introduced fresh investor nervousness. Global markets had reached a “Goldilocks” juncture. The collective judgment was that the coronavirus outbreak would soften important economies enough to justify central bank support, but not enough to derail them.