Archives of “February 2020” month

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German economy ministry says that economic impact of coronavirus cannot be estimated at the moment

  
Analysis, Economy

Says that risks from abroad have increased due to the coronavirus outbreak

Germany
  • German economy is still experiencing a period of weakness
  • Industrial sector remains weak
  • But improved business sentiment suggests some stability in the coming months
  • Impact of virus outbreak on China and trade partners cannot be estimated currently
A couple of general commentary by German lawmakers after the Q4 GDP report earlier. The report saw German economic conditions stagnate in the final quarter of 2019 and the brighter outlook going into this year has been largely tempered by the virus outbreak.
As such, any expected recovery may have to be shelved and that may could mean softer economic conditions in the euro area the longer that the virus continues to impact the Chinese economy and global supply chains.

Chinese equities wrap up the week with modest gains

  
Analysis, Global Indices

A solid performance on the week

CSI 300

The CSI 300 index closes up by 0.7% while the Shanghai Composite closes up by 0.4% on the day. For the week, the former is up by 2.3% while the latter posts gains of 1.4%.
Chinese authorities continue to keep the calm in the market and the continued injection of liquidity certainly helps in that regard – and it is working.
Both the CSI 300 and Shanghai Composite have pretty much closed the gap from the sharp drop last Monday and this should breathe more confidence among investors ahead of the weekend as coronavirus fears show signs of abating for now.

US stocks end the session down marginally

  
Analysis, US Market

S&P and NASDAQ snap 3 day winning streak

The major indices are ending the session marginally lower. The S&P index and the NASDAQ index at 3 day winning streak. The Dow has been down 3 last 5 trading days.
The final numbers are showing:
  • The S&P index -5.51 points or -0.16% at 3373.94
  • NASDAQ index -13.993 points or -0.14% at 9711.96
  • Dow -128.11 points or -0.43% at 29423.34
I guess every day does not close with a record.

European shares close mostly lower but off lows for the day

  
Analysis, Global Indices
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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

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

Oil
  • 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.
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