Despite a strong rebound in the third quarter, the bloc recorded a 0.4 per cent contraction in the fourth, raising fears of a double-dip recession.

Supply lines have been badly interrupted and the world is running short of key goods and materials, leaving the global economy with much catching up to do. Shipping containers are in short supply, with demand and prices surging worldwide.

While markets are riding high on monetary stimulus, the Fed’s objective is to spur real job growth, not trading fads. A tax on financial transactions would not only curb exuberance, but help foot the government’s stimulus bill.

When weighed against the risks, US Treasuries still offer the best returns for China’s massive reserve stockpile. Diversifying into the euro and yen, for example, would mean giving up yield.

The Fed’s dilemma is whether the new US president’s stimulus plan risks overheating the US, given that the economy is being swamped with liquidity from the central bank’s bond buy-back programme.

It might be time for Beijing to consider reining back the excess slack and for markets to be prepared for the prospect of higher interest rates ahead. Easy money can’t last forever and Beijing needs to think about normalising policy.

China and Europe’s patience with renminbi and euro appreciation, respectively, may not last, while the Biden team could be less opposed to a stronger dollar. The Fed’s response will be key, as pressure builds to keep the economy from overheating.

China’s export performance is accelerating in spite of headwinds, putting it at odds with its biggest trading partners, especially the US. If the US and China are to defuse trade tensions, compromise and concessions are needed on both sides.

Asian manufacturers are at the forefront of the upturn, judging by business confidence data showing surges in purchasing managers’ indices. Given the way manufacturing indices are pointing, global GDP growth in 2021 could be heading for its strongest level for a decade.

Given that Yellen has been chair of the Fed, US fiscal and monetary policy are likely to be much more in sync. While Yellen is not an advocate of austerity policies, if the market appetite for risk skyrockets or the dollar weakens considerably, higher interest rates might come sooner than expected.

If Beijing is anxious about US sovereign credit risks, there are other investment options like euros and gold, but they come with major consequences on prices and exchange rates.

Signs are already pointing to an uneven economic recovery across the continent. Stronger fiscal stimulus is needed to revitalise domestic demand, but Europe must also open its doors to faster export-led growth, especially with major partners like China.

While some expect that China’s economy could eventually end up looking like the US’, where consumer demand drives growth, it is not a direction Beijing wants to take. For now, China prefers to maintain high savings and strong investment in R&D.

The burst of activity as economies in China, the US and the EU emerge from the coronavirus-induced lethargy raises hopes of a spectacular return to growth. As long as fiscal support holds up, the dreaded double-dip recession can be fended off.

China has rallied resources with carefully placed investments in strategic areas of the economy. Conversely, the US and Europe have relied too much on blanket stimulus to turn things around, with less effect.

With the threat of a no-deal Brexit looming and the European Central Bank moving towards another monetary policy ease, the euro is living on borrowed time. A US interest rate rise is likely while euro zone rates are in negative territory, so shorting the euro and going long on dollars could gain a strong following.

At a time when the US economic outlook may be faltering, China has an opportunity to take up the slack and help lead the way in the global recovery. Lifting global growth might mean bigger deficits and a smaller trade surplus for China, but major benefits would follow if it eases tensions with the US.

November’s US presidential election could easily be a lottery like 2016, making it too risky for investors to make rock-solid bets at this stage. The worry is how the rest of the world responds to any new phase of US dollar instability.

To insulate the economy from international downside risks, Beijing must boost domestic demand by easier credit conditions, extra liquidity injections and further fiscal stimulus.

A raft of new monetary and fiscal stimulus is working its way through, a global business upturn is already under way and risk appetite is tentatively gaining ground.

The appetite for multilateral problem-solving is much weaker now than in 2008 when the global financial crisis hit, with US-China friction setting the tone for global relations. A change in US leadership could turn the tide.

The dollar is being undermined by loose US monetary policy and uncertainty surrounding the outcome of the presidential election. The latter could mark a turning point for the currency.

Investors can only rely on the available data for their decisions amid uncertainty about the pandemic’s track. With both the sentiment surveys and hard economic indicators showing a positive trend, equity markets cannot be blamed for being optimistic.

The rebound in the euro is simply the flip side of the US dollar being undermined by uncertainty about the presidential election. The monetary muddle in Europe won’t help the currency after the dust settles in America.

Birth rates around the world are declining at an alarming rate, with major implications for future growth, prosperity and social stability. Future monetary and fiscal incentives must be attuned to rebuilding the right conditions and incentives for sustainable global population growth ahead.

The upturn in trade and job numbers and positive market sentiment are fuelled by generous policy stimulus. While the illusion of plenty lasts, a sustainable economic recovery built on business and consumer confidence must take root.

The recent US dollar sell-off raises questions about confidence in the world’s dominant currency, but the fact remains it has no peers as a reserve asset. The woes of the US economy notwithstanding, the dollar will bounce back, as it has always done.

The amount of money earmarked for European recovery is huge, with scant regard for the consequences. Both the EU and China need more bilateral trade to stand any hope of a stronger recovery this year, but concessions and compromise will be needed.

In a world of rising unemployment, governments must focus on job creation initiatives and look out for workers’ rights when firms attempt to put profits above people.

Trump’s business-friendly tax bonanza has come at a cost and the US’ deteriorating economic fundamentals are in need of repair. Democrat presidents are usually written off as tax-and-spenders but recent experience suggests otherwise.