Earlier today, one of the issues we pondered regarding the coronavirus was that USD/JPY was only down 40 pips from the day’s highs, while stocks were getting hammered and gold was flying. Where was the “flight to safety”? USD/JPY and stock indices are supposed to move together. As stocks indices move lower, there is a tendency to buy yen. Below is a 240-minute chart of USD/JPY. The green panel below shows the correlation between USD/JPY and the S&P 500. Notice that as USD/JPY began to move higher earlier last week, the correlation began to move lower. Stocks weren’t “buying into” the [...]
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China’s economic powerhouse Guangdong lowers coronavirus threat level amid drive to get economy going againadmin 2020-02-25T10:45:54+00:00
China’s southern economic powerhouse of Guangdong lowered its public health emergency response to the Covid-19 epidemic on Monday, offering relief to some businesses. A Grade I alert – the highest level – had been in force for a month and the decision to lower it to a Grade II was matched by five other provinces and came amid a government push to get the country’s economy moving again. On Sunday, President Xi Jinping addressed tens of thousands of officials across the country in a rare teleconference in which he told them to vary disease control measures depending on local conditions, and [...]
The dollar checked its march higher on Tuesday, as investors sharply raised bets that the growing fallout from the coronavirus outbreak would prompt U.S. interest rate cuts. World markets are in a tailspin as infections spread quickly beyond China. The World Health Organization has said it is not a pandemic yet, but the potential exists. Supply chains around the world are jammed as China locks down to combat the virus and stocks have tumbled, bonds have jumped and expectations of rate hikes in the United States have vanished. Futures for the Federal Reserve funds rate have surged to now price in [...]
U.S. stocks opened sharply lower on Monday following steep drops in European and Asian markets, as the number of coronavirus cases outside of China surged over the weekend, with Italy and South Korea becoming the latest two major economies at risk from the outbreak. • Wall Street plunged to start the week: The Dow Jones industrial average fell over 1,000 points, dropping 3.6%, while the S&P 500 also lost 3.4% and the Nasdaq Composite lost 3.7%. • Stocks plunged on Monday on news that the outbreak has now infected more than 79,000 people globally and killed over 2,600, with Italy, South [...]
Fed's Mester: Monday's Market Reaction To The Coronavirus Is 'One Day' — LiveSquawk (@LiveSquawk) Fed's Mester: Economic Impact Of Coronavirus Outbreak Depends On How Deep And Long-Lasting It Is — LiveSquawk (@LiveSquawk) Fed's Mester: Her Business Contacts So Far Say That Impact Of Coronavirus Is Only On The Supply Side, No Downturn In Demand — LiveSquawk (@LiveSquawk) Fed's Mester: She Does Not Want To Overreact To Volatility In The Financial Markets While Still Taking Them Into Account. — LiveSquawk (@LiveSquawk)
BoE Chief Economist Haldane: Does Not See Overstretched Balance Sheets Or Asset Bubbles Generally Around The World — LiveSquawk (@LiveSquawk)
The U.S. stock market’s sharp sell-off on Monday came after coronavirus cases increased outside of China, but there were several other factors that may have helped send stocks downward. The Dow Jones Industrial Average and the S&P 500 both fell more than 3% on the day, with travel stocks and those with heavy reliance on supply chains in China and South Korea, such as Apple, falling more than the broader market. Strategists and technical analysts pointed to other signals in the market that helped fuel a sell-off that the outbreak had failed to trigger so far. Technical indicators A lack of [...]
As cases of the new coronavirus surge outside of China, world health officials said Monday that other countries should start preparing for epidemic outbreaks of COVID-19 to cross their borders. “It is time to do everything you would do in preparing for a pandemic,” Dr. Mike Ryan, executive director of the World Health Organization’s health emergencies program, told reporters at a news briefing at the organization’s headquarters in Geneva. “We’re still trying to avoid that reality. We’re still trying to avoid that eventuality.” In the past week, the virus has spread substantially outside of China. In ... (full story)
Asian currencies slid on Monday as the rapid spread of the coronavirus beyond China drove fears of a pandemic and sent investors flocking to gold and the dollar for safety. Italy, South Korea and Iran all posted sharp rises in infections over the weekend. South Korea now has more than 600 cases, Italy more than 150 and Iran 43 cases. The World Health Organization said it was worried about the growing number of cases without any clear link to China, where the virus’ outbreak is believed to have begun. The Australian dollar AUD=D3, sensitive to developments in the outbreak because Australia [...]