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Four headlines hit at virtually the same time to undercut sentiment

  
  Analysis
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Risk trades leg lower in a big way

Commodity currencies and stocks were caught in a quick downdraft after at least four headlines hit at virtually the same time:
  • Florida virus cases spike
  • Beijing moved to phase-2 containment on the latest virus outbreak, closing schools
  • Texas virus hospitalizations rose 8.3% to hit a record
  • Powell indicated that corporate bond buying probably won’t be aggressive and is more of a contingency
The S&P 500 is up just 0.45% after rising nearly 3% at the open.
Trump rant about Powell incoming…

Risk remains softer ahead of European trading

  
  Analysis
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Virus worries weigh on the market but Chinese stocks are still rallying

USGG10YR

Treasury yields are lower across the curve with 10-year yields back under 1.50%, slipping to its lowest levels since September last year as the market is leaning towards being more risk averse ahead of European trading today.
In turn, gold is breaking out in a strong way with price near the highs now around $1,628 with the currencies space also reflecting softer risk flows.
The aussie and kiwi are weighed lower with the franc among the better performers, despite narrower trading for the time being. USD/JPY is also seeing a bit of a pullback under 112.00 for now, so perhaps are we seeing a return to the norm for the yen?
Despite the negativity, Chinese stocks are continuing to rally as authorities prop up the equities market with more and more stimulus measures. The run just keeps going.
SHCOMP
It’ll be interesting to see if Wall Street can turn things around later today, but with PMI readings in the European morning likely to reaffirm worries about global growth, I reckon we may be set for a more risk averse period before the weekend this time around.

Beijing cancels large-scale Chinese New Year celebrations due to new coronavirus outbreak

  
  Analysis
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China continues to take steps to contain the virus from spreading

Beijing just announced that they will be cancelling all major events, including the Chinese New Year celebrations because of the new coronavirus outbreak.

It is a wise move in an effort to keep the situation from potentially getting worse but it will dampen the mood ahead of the holiday period for Chinese citizens.
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