European shares close mostly lower but off lows for the day

German DAX, -0.16%, France’s CAC, -0.36%

The major European indices are now close for the day and indices are closing lower but well off the lows for the day. The provisional closes are showing:

  • German DAX, -0.16%. It was as low as -1.26%
  • France’s CAC, -0.36%. It was as low as -1.25%
  • UKs FTSE 100, -1.25%. It was as low as -1.69%
  • Spain’s Ibex, -0.16%. It was as low as -1.47%
  • Italy’s FTSE MIB bucked the trend and rose by 0.19% That is up from a low of -1.10%.
In debt market, the benchmark 10 year yields are mostly lower with the exception of the UK. The ranges and changes are currently showing:
The European 10 year yields are mostly lowerIn other markets:
  • Spot gold is trading up $10.07 or 0.64% $1576.09
  • WTI crude oil is up $0.27 or 0.53% of $51.45
in the US equity market, the earlier declines in stocks have been mostly raised in the broad indices at least. The Dow is still negative:
  • S&P index is down -1.5 points or -0.5% at 3378. The hi reached 3380.36
  • NASDAQ index is unchanged at 9725.40. The high reached 9732.87.
  • Dow is down 78 points or -0.27% at 29471.4.
In the US debt market, yields are off lows but still remain modestly lower on the day.
US yields are still lower but off the lowest levels
The ranking of the major currencies shows the GBP is the strongest and the NZD is the weakest.

IEA sees fall in Q1 oil demand, the first quarterly drop in more than a decade

IEA estimates Q1 oil demand to fall by 435k bpd year-on-year

  • Q2 pglobal oil demand set to grow by 1.2 mil bpd
  • Assuming that economic activity returns progressively to normal
  • Cuts 2020 oil demand growth forecast by 365k bpd to 825k bpd
The changes to the forecasts and estimates are due to the coronavirus outbreak impact as IEA sees the widespread shutdown of the Chinese economy weighing heavily on demand – more so than OPEC – but they estimate a quicker recovery in the coming quarters.
That said, the agency says that the impact of the coronavirus outbreak will be felt by the oil market throughout the year and it is “hard to be precise about the impact” now.
Back to the headline reading, IEA had previously forecast a growth of 800k bpd in Q1 compared to a year earlier but now expect a contraction of 435k bpd instead – the first contraction since the global financial crisis back in 2009.

Yields continue to track lower on the day

US Treasury 10-year yields down by nearly 5 bps to 1.585%


The risk-off mood looks to stay the course ahead of European trading and this should set up a softer start for risk in the session ahead.
The track lower in yields is also pushing the yen higher as we see USD/JPY inch towards session lows of 109.78 as sellers threaten a break of the 100-hour moving average.
The latest economic data from China isn’t helping in that regard, with CAAM also warning that auto sales and production figures in February will be “bad”.

Nikkei 225 closes lower by 0.14% at 23,827.73

Asian equities slip on renewed coronavirus concerns

Nikkei 13-02

The jump in the number of cases reported by Hubei here – owing to a reclassification – is causing investors to be a little unsettled to start the day, as concerns surrounding the coronavirus outbreak continue to persist.

That has seen risk trades take a bit of a hit, with Chinese equities on course to snap their seven-day rally; Shanghai Composite is down by 0.8% currently.
USD/JPY is lingering near the lows around 109.84 currently as Treasury yields are also marked lower with 10-year yields down 3.6 bps to 1.597% at the moment.

Charlie Munger warns ‘lots of troubles coming’ – ‘too much wretched excess’

Charlie Munger is Warren Buffett’s longtime business partner and vice chairman of Berkshire Hathaway

CNBC have this report up on his comments at a shareholders meeting.
  • “In China, … they love to gamble in stocks. This is really stupid,” Munger said. “It’s hard to imagine anything dumber than the way the Chinese hold stocks.”
  • To make his point about excess, Munger cited the proliferation of EBITDA as a fake profit metric. “I don’t like when investment bankers talk about EBITDA, which I call bulls— earnings,” 
Here is the link for more.
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