Riskier Assets Sink as the Coronavirus Goes Global

It’s ‘risk-off’ early this morning as the markets in Asia respond to the spread of the coronavirus. The WHO could add further pressure…
Bob Mason
Stock market down

Earlier in the Day:

It was a quiet day on the Asian economic calendar this morning. There were no material stats due out, with holidays in China and Australia leaving volumes on the lighter side.

A lack of stats left the markets in the hands of the news wires, as updates on the coronavirus hit market risk appetite. Riskier assets hit reverse early, as the spread of the virus could ultimately impact the Chinese economy and beyond.

On the geopolitical front, concerns over U.S tariffs on EU goods and autos, in particular, were also market risk negative.

For the Majors

At the time of writing, the Japanese Yen was up by 0.43% to ¥108.81 against the U.S Dollar, while the Aussie Dollar was down by 0.38% to $0.6806. The Kiwi Dollar was down by 0.36% to $0.6583.

The Day Ahead:

For the EUR

It’s a relatively quiet day ahead on the economic calendar. Key stats include IFO business Climate Index figures due out of Germany.

Following better than expected PMI numbers out of Germany last week, today’s Business Climate Figures will need to support. Optimism across the private sector hit a 16-month high in January, according to the prelim PMI.

Outside of the numbers, however, risk aversion over the coronavirus could pin back the EUR, as would any further chatter from the U.S on EU trade tariffs…

At the time of writing, the EUR was up by 0.03% to $1.1028, with early support coming as the Asian markets responded to last week’s PMIs.

For the Pound

It’s a quiet day ahead on the economic calendar, with no material stats due out of the UK to provide the Pound with direction.

Based on last week’s numbers alone, the Pound should find a further upside, though chatter from the EU on trade will likely influence.

The EU is not expected to be in too much of a hurry in reaching a trade agreement with the UK. Johnson will need to keep the focus on the EU and other trading partners to support a positive outlook post-transition.

It’s Britain’s last week as a member of the EU. After more than three-and-a-half-years of political chaos, the wait is over…

At the time of writing, the Pound was down by 0.07% to $1.3064.

Across the Pond

It’s a relatively quiet day on the data front, with economic data limited to December new home sales figures from the U.S.

Barring dire numbers, the figures are unlikely to have a material impact on the day.

Outside of the numbers, expect updates on the coronavirus and the Oval Office to also influence. A further spread of the virus would further raise demand for the safe havens.

In the early part of this week, a further spread of the virus could force the World Health Organization’s hand in revising its view of the virus…

The Dollar Spot Index was down by 0.02% to 97.832 at the time of writing.

For the Loonie

It’s a quiet day ahead on the economic calendar, with no material stats due out of Canada.

A lack of stats will leave the Loonie in the hands of risk appetite on the day. The effect of the coronavirus on the Chinese economy and demand would be negative for crude oil prices and riskier assets in general.

The Loonie was down by 0.13% at C$1.3160 against the U.S Dollar, at the time of writing.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.