CHINA’S LNG DEMAND GROWTH MAY DROP 38% ON VIRUS, IHS SAYS
Archives of “February 2020” month
rssChinese doctor and early coronavirus whistleblower dies
Dr. Li Wenliang was one of 8 doctors visited by policy after early warnings on virus
Ophthalmologist Dr. Li Wenliang become somewhat of a folk hero in China as one of the 8 doctors who was disciplined by police after warning fellow doctors to wear protective clothing because of a new SARS virus.
He was then visited by policy and the Public Security Bureau where he was told to sign a letter where he was accused of “making false comments” that had “severely disturbed the social order”.
On the weekend, he revealed he had contracted the virus himself after testing negative a number of times.
“Today nucleic acid testing came back with a positive result, the dust has settled, finally diagnosed,” he said in a video that was widely watched.
State media is now reporting that the 34-year-old died today. He had a wife and five-year-old daughter. There are reports that his wife is sick as well.
What a tragedy.
If You Traded VW You Know How To Trade … Jesse Livermore
The First Law Of Thermodynamics Law of Conservation of Energy
This Thing Of Ours What’s It About?
Treasury yields turn flat across the curve, risk currencies pare gains
10-year Treasury yields are now flat on the session
The early trading in the bond market is hinting at some indecision about the risk mood. Treasury yields turned flatter about two hours ago before recovering some poise and is now back to flat levels again on the session.
As a result, USD/JPY has pared gains to 109.81 currently and we are seeing a similar story for the aussie as AUD/USD falls to a session low of 0.6743 after having traded around 0.67455-65 earlier in the day – just take note AUD/JPY is at key resistance levels as well.
European equities have pared back some of its earlier gains too but are still keeping higher in trading so far. This may yet lead to some mixed tones between stocks and bonds again but just be mindful of the market saying that “the bond market is always right”.
How quickly can the globe shake off the ‘Wuflu’?
Question of the day, via Bloomberg
This is an interesting question that was on Market’s Live Blog this am and I thought I would share it out today on my post to get the benefit of some seasoned readers views. Yesterday I posted on ‘Dr Copper’s’ remedy for the Wuflu and how, so far, initial signs were good. Global equities have been leading the way with a strong recovery since Monday on rumours of a vaccine very close to being developed. The market is shrugging off the Wuflu worries amidst two different narratives. Narrative 1 is that this is no worse than the flu. Narrative 2 is that this is an underreported killer. Most people I am reading on the flu have either of these narratives or a bit of a blend. Narrative 1 is winning for now.
What will be the longer term impact of Wuflu?
A number of economists have been trying to asses the impact of the coronavirus. The main question is this, ‘has this coronavirus outbreak been a blip in the year that we can just ignore?’Are we back to how it was before the coronavirus now? Or will there be knock on effects down the line?’
Has the market priced in more relief than we will see?
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In other words has the recent rally in commodities and equities been on relief that the coronavirus will be contained rather than on its actual impact ?
What about the potential supply disruptions to factories that is still to come from countries with China as a key part of the supply chain? Has this been overlooked in relief that it now appears the globe is not going to be consumed by a killer virus.
Take the long view
So, what do you see as the longer term asset impact of the coronavirus, say in 3-6 months from here. Let’s assume, for the sake of argument, that the coronavirus is contained from here on in and the current relief for equities and commodities last.
European equities open higher to start the day
Virus? What virus?
- Eurostoxx +0.7%
- Germany DAX +0.9%
- France CAC 40 +0.8%
- UK FTSE +0.6%
- Spain IBEX +0.5%
Equities are continuing to brush aside coronavirus fears as the good news on US-China trade earlier sets up the perfect platform for a risk-on push in Europe to start the day.
It will now be a question whether or not the momentum can be sustained all the way through US trading as well later today. So far, virus headlines are being brushed aside but just be wary that there are cautionary signs of the fallout that the virus impact is having.
Global PMI hit a ten-month high in January
ICYMI, the J. P. Morgan Global PMI Composite Output Index hit 52.2, taking it to a 10 mth high
- from 51.6 in December
- (says the report – It should be noted that the majority of the January PMI survey data were collected before the nCoV outbreak.)
Keeping in mind the impact that the virus will have ahead this is nevertheless a piece of good news. Better to be into economic headwinds in a better place than a worse one.
Comments from JPM:
- “The global economy started 2020 on a stronger footing, with output growth rising for the third straight month to its highest since March of last year suggesting global growth at an-above potential pace. However, we brace ourselves for a much weaker outcome this quarter as the outbreak of the nCoV virus disrupts activity in China and potentially around the world. Encouragingly, the gains in the PMI were not just confined to the Output Index, with trends in new orders, business sentiment and employment also firming.”
Fitch says the ongoing coronavirus outbreak will dampen economic growth in China this year
Fitch ratings
- ongoing coronavirus outbreak will dampen economic growth in China this year
- if Chinese govt were to launch a large-scale stimulus to offset effects of coronavirus, it could have adverse effect on other policy goals
- still too early to make definitive adjustments to China’s GDP forecasts at this stage & instead have examined some illustrative scenarios
- huge uncertainties remain over impact of coronavirus on China’s economy
- says China govt only likely launch large-scale stimulus if economic impact of virus proves substantially larger than SARS outbreak in 2003
- if epidemic is not contained until well into Q2 growth could fall more steeply, China GDP growth in Q1 could be closer to 3%
more to come