Archives of “January 2020” month

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China says 30,453 people are under medical observation and at risk of coronavirus

  
  Analysis
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That’s the number of close contacts

That's the number of close contacts
Today’s data:
  • 769 new confirmed cases (total 2,744)
  • 137 severe cases
  • 24 new deaths
  • 461 cases of severe cases
  • 30 provinces affected
  • 5794 suspected cases
  • 32,799 close contacts have been traced
  • 583 people have been released from medical observation
  • 30,453 people are currently receiving medical observation
  • Source
In the provincial breakdown, some of the hardest hit provinces were:
  • Henan – 128, particularly in Zhengzhou
  • Hunan – 26
  • Zhejiang – 24
This is a worrisome case from South Korea:
The Yonhap News Agency reported on the 26th that there was a third case of  coronavirus in South Korea. The patient previously stayed in Wuhan, China. He returned to Korea from Wuhan on the 20th. He returned without any abnormal symptoms. He had symptoms of warmth and cold from the 22nd. He had intermittent cough and sputum on the 25th.

The Korean health department said that the patient had been active in the community without knowing that he was infected from 20th to 25th. He may become a spreader of the new coronavirus and is closely monitoring the situation of the people in his community.

Markets wake up: Oil drops, gold jumps, yen bid

  
Analysis, Gold / Silver
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Risk aversion kicks in

Risk aversion kicks in
Gold is up $14 in the first minutes of trading while WTI crude has fallen 2.5% to $52.85. S&P 500 futures are down 1%. The US 10-year note future contract is up 11 ticks.
The yen is bid but not as much as I anticipated. NZD/JPY is down 50 pips to 71.69 and is the biggest percentage mover. USD/JPY is down 45 pips to 108.83.
Get ready for a wild week.

US confirms fifth case of coronavirus

  
  Analysis
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A case in Arizona

Phoenix officials say a resident was diagnosed with coronavirus on Sunday.
Officials said the patient recently returned from Wuhan, China and is a member of the Arizona State University community who does not live in university housing.
They say he/she is severely ill and in isolation. They’re working with the patient to identify anyone who may have been in close contact or been exposed.
“While the immediate risk of the 2019 Novel Coronavirus to the general public is believed to be low at this time, ADHS and our county public health partners will continue to actively monitor for the disease,” said Dr. Cara Christ, ADHS director. “There are simple daily precautions that everyone should always take to prevent the spread of diseases.”
I’m starting to feel like this virus is targeting ForexLive. In the past 48 hours there have been cases in Toronto, Melbourne, Kuala Lumpur and now Pheonix. With that, the four of us will continue to never leave our homes and desks.

US embassy in Baghdad hit with a rocket

  
Analysis, Politics

Rockets hit Green Zone in Baghdad

Five Katyusha rockets hit the Green Zone in Haghdad on Sunday, according to Iraqi security forces.
There were no casualties but one hit the US Embassy, according to al-Sumaria. A separate report says the dining facility was hit.
The attack was first reported 4 hours ago and there is said to be heavy helicopter traffic there now.
In May 2019 a rocket was fired inside the Green Zone and on January 4 one rocket landed in the Green Zone.
The Iraqi PM said the attack will have serious consequences and condemned it.

China’s national health minister warns virus appears to be infectious during incubation and is getting stronger

  
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“The virus’s ability to spread seems to be getting somewhat stronger”

"The virus's ability to spread seems to be getting somewhat stronger"
China’s National Health Commission Minister Ma Xiaowei today said the incubation period for the virus can range from one to 14 days, and the virus is infectious during incubation, which was not the case with Severe Acute Respiratory Syndrome.
“According to recent clinical information, the virus’s ability to spread seems to be getting somewhat stronger,” Ma told a media briefing.
He warned that containment efforts will be intensified.
China has now announced that going forward there will be daily briefings at 9 am Beijing time. That’s 0100 GMT or 8 pm in New York.
The WHO repeated on Sunday that it has not yet declared the virus to be a global emergency.
Separately, researchers are debating on what to name the coronavirus. While it’s being simply labeled as ‘coronavirus’ colloquially, that’s a scientific term that’s used for a type of virus. The interim name is novel coronavirus (2019-nCoV) in scientific communities. Many are pushing to name it Wuhan coronavirus but the WHO discourages including place names so they might call it SARS-2. Colloquially, I don’t think that name will work and I suspect that something like the ‘Wuhan flu’ will win out in the general public.

Shantou reverses lockdown order

  
  Analysis
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Reversal may have been ordered from above

Reversal may have been ordered from above
Earlier the city of Shantou, 1000km from Wuhan, had order a lockdown on travel. It was the first city outside of Hubei to do so.
As I highlighted, what was unique about the order was that it was forbidding all transport from entering the city. The lockdowns in Hubei prevent people from leaving.
So despite two confirmed cases in Shantou the aim here was likely to keep people out rather than keep the disease from traveling. Now they’ve had second thoughts and have sent a new notice that says the city will monitor people, vehicles, ships entering city but there are no travel restrictions. All taxi, car hailing, buses will operate normally.
What likely happened is that higher-up officials reversed the order because they didn’t want other cities to follow and a situation of every-town-for-itself. Either that or the situation isn’t as bad as feared.

A city 1000km from Wuhan just declared a full lockdown

  
Analysis, Life

Shantou, a city of 5.5m on the southern coast will go on lockdown

Shantou, a city of 5.5m on the southern coast will go on lockdown
The city of Shantou on the southern coast of China in Guangdong province has announced it will be the first outside of Hubei province to go on lockdown.
That means no individual, vehicle or boat will be allowed to entering the city beginning on January 27. What’s different here is that Hubei cities are preventing people from leaving; in Shantou, they’re baring them from entering.
The choice of this city is extremely concerning. There are only 2 confirmed cases there and many are speculating this is a sign that the entire country is about to be put on lockdown. While that would be economically devastating in the short-term, it would be China’s best chance of halting the spread of the virus.

Bond market worries: What implied volatility says about the week ahead

  
  Analysis
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The volatility playbook for the week ahead

After a week where markets have had to try and understand the potential fallout on the Chinese economy from the coronavirus outbreak, a more dovish BoC, a reasonable Aussie jobs report, and solid UK data, we head into the new week with a number of moving parts through which to navigate.
One aspect that I have addressed in the ‘Week Ahead’ playbook is the message I am seeing from the US bond market and it is a play that is progressively suggesting more risk averse positioning. It gives me some belief that implied volatility in markets could start to respond and move higher. I have mentioned in reports of past that the bond market has never fully bought into the reflation trade that so many economists had got quite excited about going into 2020. Where, if I look at the long end of the US Treasury or German bund curve, or even the copper/gold ratio, the market is saying reflation is a pipe dream, and instead, we may actually be too optimistic about the global growth story.

(Green – US 10-year inflation expectations, white – copper/.gold ratio)

US 10-year inflation expectations, white
We know the FOMC meeting is this coming week and while no one expects a change in the fed funds rate, we are expecting Jay Powell to be intensely probed about the Fed’s balance sheet and measures to support the repo market. Risk markets, such as equities, have been supported by changes to excess reserves, which despite calls to the contrary from the Fed, the market has taken these changes as QE, and this may well be coming to an end – or, should I say, the expansion of reserve growth will soon abate.

(White – excess reserves, yellow – Fed’s balance sheet, purple – USD index)

White - excess reserves, yellow

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