Investigating the Impact of COVID-19 Outbreak On CANADA'S Financial Markets

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SARS-Cov-2 was first reported in Wuhan, China, in December 2019, following an outbreak of non-pneumonia cases. The virus has since spread to over 200 countries, prompting the World Health Organization to declare it a pandemic on March 11, 2020. The economic repercussions have been severe, with many countries implementing partial or total lockdowns, disrupting global supply chains and causing significant declines in economic activity and asset prices. Canada, affected by the virus with 731,000 cases and 18,622 deaths as of January 21, 2020, has also faced these challenges. Although vaccines have been developed, the rate of contamination continues to rise. The socioeconomic impact remains uncertain as the public health crisis evolves, and limited studies exist due to its ongoing nature. This study aims to investigate the effects of COVID-19 on Canada's financial markets, focusing on commodity markets and Treasury bills. The author employs extreme bound analysis for market interpretation, utilizing data from the Bank of Canada and Our World in Data on COVID-19 from January 1 to December 31, 2020. Findings indicate that total deaths per million significantly affect the monthly Bank of Canada's commodity price index of energy, highlighting a robust relationship between them. Additionally, both the commodity price index of energy and total deaths per million are key determinants of the overall commodity price index.