Fears of the coronavirus epidemic continue to put pressure on financial markets. It is unclear what the impact will be on the global economy and that of China, but it is this uncertainty that continues to push investors more towards safe haven assets.
The US dollar remains mixed, but it is trading in a narrow range against major major currencies, with the Kiwi and Australian being the worst losers on the FX front because of the softer risk tone today.
Asian markets are down again and US futures are down about 0.5% each. Yesterday’s Facebook results, which although expected, led to a price drop of 8% in the AH session. The sentiment was also worsened by Facebook, which also pulled tech companies down.
In the meantime, bonds continue to attract buyers. The 10-year yield is down to 1.568%, keeping the yen weak before the European session.
Again and today markets will weigh the risks of coronavirus and how they will respond to the news around the situation.
Later today, the WHO have a meeting to consider whether to officially declare the epidemic worldwide. Keep this in mind, because the increase in fear can also increase the sale of risky assets.
The focus of the European session remains the BoE meeting, the decision on the interest rate and the reaction of the pound.
Trader Martin Nikolov