Money markets were also relatively stress-free, as reflected by the continued narrowing in Overnight Index Swap (OIS) spreads at the time. The global economy emerged from recession in the latter half of 2009, much sooner-thanexpected and at a pace that was stronger than even the most optimistic forecasts. This development proved to be the catalyst for the rally in financial markets.
Furthermore, the pace and speed of the recovery, differed vastly across countries and regions, with emerging markets proving to be the engine for global growth. Together with record-low interest rates in advanced economies, risk aversion having dissipated and abundant liquidity, emerging market countries started to attract significant capital inflows.