Investors are steeling for another fraught rollercoaster week on financial markets as Europe goes into lockdown and the US Federal Reserve prepares to slash rates, with analysts warning of increased volatility and further declines ahead as the coronavirus pandemic threatens to plunge the global economy into recession.

The warnings come after Australian and US sharemarkets staged a stunning rebound on Friday on the back of central bank action and US President Donald Trump declaring a national emergency, unlocking $US50bn ($80bn) in funds to support the US economy.

Managing director of Yarra Capital Management, Dion Hershan, said markets were responding to the panic seen in other parts of society and there had been a degree of complacency in the system prior to the correction.

“It’s impossible to predict the short-term outlook for stocks. History suggests panics like this tend to be a great opportunity but you need to be able to live through (or ignore) the extreme volatility over coming months.

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