Report (unconfirmed) that head of US intelligence ag. Iran, Iraq has been killed

Be careful. Unconfirmed.

UNCONFIRMED, but this might not be good if true… INTELSky who on their twitter account calls themselves a “MIDDLE EAST AND MEDITERRANEAN AIRSPACE OBSERVER. TRACKING VARIOUS & INTERESTING SPOTS, MIL AIRCRAFT. #OSINT CONFLICT ZONES” is out tweeting:
Be careful. Unconfirmed.
According to INTELSky, D’Andrea headed the hunt for Bin Laden.  There is no adverse reaction to markets.

OPEC said to be discussing extending output cuts until at least June

OPEC is said to be alarmed by the coronavirus outbreak

OPEC

Reuters is reporting on the matter, citing three OPEC sources, in saying that the bloc aims to extend the current oil output cuts through to June at least.

Adding that members are also discussing on deepening the cuts if oil prices or demand should fall significantly on the coronavirus outbreak.
There is little doubt that the virus will weigh on oil demand in Q1 at the very least but if it does have a prolonged impact, OPEC may have to live with lower oil prices until the world adjusts to the situation in the long-term.
I mean, if they can’t even properly comply with current quotas – what more if they choose to deepen cuts further. It’d be all talk but no action.

WHO chief has met with China president Xi on coronavirus outbreak – spokesman

WHO chief, Tedros Adhanom, is in China this week to discuss ways of containing the virus outbreak

The spokesman also said that Tedros has met up with top Chinese officials and discussed measures to protect Chinese and foreigners in areas affected by the coronavirus. They are also said to have discussed possible alternatives to evacuations.

Adding that Tedros did not travel to any place outside of Beijing and that the WHO emergency committee is being ‘kept in the loop’ about the situation.
Tedros is also coming under quite a bit of flak after the WHO previously described the virus risk as being “moderate” over the weekend before admitting to their mistake and correcting the risk to “very high in China and at a regional level, and high at a global level”.
It still doesn’t look like they will declare the virus as a public health emergency it seems.

PBOC confirms that Chinese markets to only resume trading on 3 February

Says that interbank markets will also observe the extended holiday period

For those unaware, China is observing an extended holiday until 2 February in an attempt to curb the spreading of the coronavirus infection. The central bank also reaffirms that they will offer ample levels of liquidity after the holidays via OMOs.

What is your preferred source of safety from the Coronavirus?

Via Bloomberg, question of the day ?

Via Bloomberg, question of the day ? 
This was a question on Bloomberg Market’s Live blog this week and I thought I would ask our Forexlive readership the same question. What are you looking at for safety in the current concerns over the coronavirus?
  • Treasuries: One of the first ‘go to places’.
  • Gold: Another quick go to place for value. Short term it makes sense for a quick spike, but longer term the improving US outlook means that gains should be capped
  • Bitcoin: Sometimes mirrors gold as a digital ‘gold’, but for some investors the jury is still out whether bitcoin is here to stay or a first flush of a changing digital age that may or may not be here. For me, when investing in a safe haven on the coronavirus fears, I would favour gold over bitcoin every time. Is that just an unfair bias and unnecessary conservatism, or sensible? Anyone take the other view?
  • Tech stocks: Seen as less vulnerable as industrials, finance or energy stocks. Perhaps long health stocks?
Other areas to look at?

Continue reading »

China said to urge its citizens to delay foreign travel over virus fears

AFP reports

From the headline, it doesn’t appear to be a hard rule but more of a travel advisory – along the lines of asking travelers to reconsider their plans. These travel warnings have always been a bit of a blur line and in my view, I don’t ever see them having much impact.

But if we do see a significant drop in Chinese travelers around the world, expect that to weigh on global economic conditions even more to start the year – especially in economies that rely heavily on tourism and services.

Coronavirus: British nationals returning from Wuhan to be quarantined for two weeks

All 1,500 people who have flown in from Wuhan since mid-January will be asked to remain in isolation for at least a fortnight reports the UK Telegraph (link may be gated)

Wuhexit?
Health officials are now attempting to track cases to make sure they stay in their homes
  • But it is understood that they only have contact details for one in 10 cases who arrived on such flights.
Another 200 British nationals stranded in Wuhan.
All 1,500 people who have flown in from Wuhan since mid-January will be asked to remain in isolation for at least a fortnight reports the UK Telegraph (link may be gated) 

Coronavirus – confirmed cases across the world now 4,295. Death toll at 106.

4,295 confirmed cases

  • 106 fatalities
  • 855+ in serious/critical condition
  • 15 countries reporting cases
Here is the progression:

  • Jan 17: 41
  • Jan 19: 62
  • Jan 20: 201
  • Jan 21: 291
  • Jan 22: 440
  • Jan 24: 830
  • Jan 25: 1,287

“Global standard” gauge of currency misalignment has GBP 22% undervalued against the USD

Here’s a bit of (useful) fun, The Economist’s “Big Mac index” to gauge whether currencies are at their “correct” level against the US dollar.

Its based on the currency valuation model of purchasing-power parity (PPP), i.e. that “in the long run exchange rates should move towards the rate that would equalise the prices of an identical basket of goods and services (in this case, a burger) in any two countries”.Says the magazine (link here, may be gated(

  • Burgernomics was never intended as a precise gauge of currency misalignment, merely a tool to make exchange-rate theory more digestible. Yet the Big Mac index has become a global standard, included in several economic textbooks and the subject of dozens of academic studies. 

Some of the results (more at that link)

The Economist's "Big Mac index" currencies US dollar