Coronavirus Concerns Stall Momentum As New Year Celebrations Begin
MarketPulse | Jan 24, 2020 12:15AM ET
h3 Death Toll Rises/h3
The latest news out of China reports that 10 cities in Hubei province (where Wuhan is situated) have suspended some public transport as the number of victims falling to the virus has risen to 25 with a total of 830 other cases reported as at yesterday. China press has reported that work has started on building a new hospital in Wuhan to deal with the escalating virus. It should be completed in six days!!
A time to celebrate?
With parts of Asia already starting to celebrate the Lunar New Year and others approaching some extended breaks, the activity in the markets was noticeably muted during this morning’s session. US indices edged marginally higher though the concerns about the spreading coronavirus prevented any significant gains. Wall Street indices registered only gains of between 0.03% and 0.09%.
h3 Welcome News For Bank Of Japan/h3Japan’s inflation rate surprisingly jumped to +0.8% y/y in December, up from +0.5% the previous month and better than economists’ forecasts of a dip to +0.4%. That was the highest print in eight months and was caused by the biggest increase in food prices in 14 months and higher housing prices.
Japan’s PMI rises.
In other positive news for the Japanese economy, the flash Jibun Bank manufacturing PMI rose to 49.3, higher than analysts’ estimates of 48.7 and up from December’s 48.4. It’s the first increase in three months and the highest reading since August last year.
USD/JPY didn’t show much of a reaction to the better news, trading in a tight range with some Asian centres already closed ahead of the Lunar New Year celebrations. USD/JPY eased off 0.02% to 109.47 after touching an intra-day low of 109.26 yesterday, the lowest level in two weeks.The 55-day moving average is at 109.16 and prices have traded above this average since January 8.
Flash PMIs on tap.
Today is the day from Markit to release its flash manufacturing PMI reading for January from around the globe. Most are expected to show an improvement from December, some only marginal with others more respectable. First off, Germany’s PMI is seen moving to 44.5 from 43.7, which would be the highest reading since June, while the Euro-zone’s is expected to rise to 46.8 from 46.3. The UK equivalent probably increased to 48.9 from 47.5. By contrast, the US flash reading is expected to rise a marginal 0.1 point to 52.5.
Get The News You Want
Aside from the PMIs we have a speech from ECB President Christine Lagarde to monitor as well as Canada’s retail sales for November.
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