Awaiting Whether WHO Declares A Global Emergency Over The Coronavirus

Fundamental analysis of Forex market


  • Risk aversion and safe-haven flows dominate on coronavirus concerns;World Health Organization considered issuing a global alarm on China’s spreading coronavirus; India reported its 1st case of the coronavirus; WHO to hold
  • EU data continues to hint of stabilization taking root (higher YoY German inflation reading; better Euro Zone and German unemployment data)
  • Close call whether BOE cuts rates in Carney last meeting as gov


  • China’s death toll from the coronavirus rose to 170 from 132 previously, while the number of cases on the mainland jumped to 7,711 – World Health Organization (WHO) spokesperson: decision to reconvene the emergency committee on Thursday, Jan 31st was based on the increased spread of coronavirus; to consider the merits of declaring a global public health emergency. So far 15 countries had reported cases of the coronavirus, but the whole world needed to be on alert and take action
  • BOK Official Yoon: Too early to say whether impact from virus should be addressed with policy rate cut; Too early to comment on impact from coronavirus on the economy and markets


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  • Spain Catalan regional leader Torra calls snap election in a move to break the regional deadlock


  • EU Parliament passed the Brexit Withdrawal Agreement, clearing path for UK departure from European Union (as expected)
  • PM Johnson said to be prepared in upcoming speech to tell the EU he was prepared to accept post-Brexit border checks rather than allowing Britain to be a rule-taker


  • FOMC left Interest Rates unchanged between 1.50-1.75% range in an unanimous vote (10-0) but raised the Interest Rate on Excess Reserves (IOER) to by 5bps 1.60% and extended repo ops at least through April
  • Fed Chair Powell post rate decision press conference noted that some uncertainties around trade had diminished recently and signs of global growth had stabilized; other concerns now included the coronavirus . change in wording around being ‘near’ inflation target was to make it clear that we are not comfortable with inflation consistently running below 2% target
  • President Trump sign the USMCA (as expected)
  • White House econ adviser Kudlow: intensity of EU trade discussions will restart soon
  • White House trade adviser Navarro said to push back against the idea that the US would remove tariffs on Chinese imports if the deadly coronavirus begins to weigh on China’s economy
  • Chile Central Bank (BCCh) left the Overnight Rate Target unchanged at 1.75%



  • Indices [Stotxx600 -0.65% at 416.70, FTSE -0.64% 7,434.89, DAX -0.87% at 13,229.51, CAC-40 -1.11% at 5,888.89, IBEX-35 -0.43% at 9,506.00, FTSE MIB -0.95% at 23,933.96, SMI -0.63% at 10,791.00, S&P 500 Futures -0.60%]
  • Market Focal Points/Key Themes: European indices in the red following Asia indices lower (Shanghai closed) and lower US futures. On a busy corporate earnings front, Royal Dutch Shell down after missing on bottom line; will continue $25B buyback program albeit subject to macro headwinds and debt reduction. Diageo down after guiding FY20 revenue towards lower end of prior range and Swatch as FY19 earnings missed on top and bottom line. British Telecom trading lower as Q3 earnings results came in below expectations. Siemens Gamesa plunges after reporting Q1 net loss and cutting FY20 guidance. Getinge and Orsted also down. Unilever up after FY19 earnings and initiation of strategic review of global tea business. Volvo jumps on strong Q4 results and proposes special dividend. Roche up following earnings and small dividend increase proposed. H&M rallying after strong Q4 results and CEO and Chairman change, Deutsche Bank also gains reversing earlier losses as the company posted a wider than expected loss. Wartsila, Svenska Cellulosa, Stora Enso, Safilo and DWS also trading higher today post earnings. Looking ahead notable earners today include AmerisourceBergen, Archer Daniels Midland, Alliance Data Systems, Ameriprise Financial, Apollo Global Management, Franklin Resources, Biogen, Blackstone Group, CMS Energy, CNX Resources, DowDuPont, Quest Diagnostics, Danaher Corp, Dover Corp, WW Graninger, Hershey Foods, International Paper, Coca-Cola, Eli Lily, Marsh & McLennan, Magellan Midstream Partners, Altria, MSCi, Murphy Oil, Northrop Grumman, Parker Hannifin, Resolute Forest Products, Raytheon, Sherwin-Williams, Spectrum Brands, Thermo Fisher Scientific, UPS, Verizon, WEC Energy and Xcel Energy.


  • Consumer discretionary: Unilever [UNA.NL] +1.5% (earnings), H&M [HMB.SE] +9% (earnings), Diageo [DGE.UK] -1% (cut guidance)
  • Energy: Royal Dutch Shell [RDSA.NL] -4% (earnings)
  • Financials: DWS [DWS.DE] +1% (earnings), Deutsche Bank [DBK.DE] +1% (earnings)
  • Industrials: Volvo [VOLVA.SE] +7% (earnings; extra dividend)
  • Telecom: BT Group [BT.A.UK] -6% (earnings)


  • ECB SSM chief Enria: Considering a range of options on cross-border issues. Might remove some of the hurdles that deter banks from doing business across borders. ECB to continue to advocate for legislative change
  • EU commission said to back revision of Euro-area fiscal rules
  • Turkey Central Bank (CBRT) Gov Uysal: Quarterly Inflation Report press conference saw continued disinflation in the period ahead. Country’s risk premium had improved significantly and its economic activity continued to recover in Q4. Saw no inflationary pressure from consumption in 2020
  • Turkey Central Bank (CBRT) Quarterly Inflation Report maintained its 2020 CPI outlook at 8.2% and 2021 CPI at 5.4%. Maintained end-2020 Food price inflation at 11.0% and set end-2021 Food price Inflation at 7.0%
  • BOJ Dep Gov Amamiya: Impact of coronavirus to depend on how much it spreads
  • Taiwan Central Bank (CBC) Dec Minutes: 1 member saw global economic downside risks. 1 member saw no reason to cut rates; 1 member favored unchanged rates; 1 member noted that must watch real estate speculation
  • Macau to extend school holiday ‘until further notice’ to help contain the spread of coronavirus

Currencies/Fixed Income

  • Risk aversion and safe-haven flows dominate on coronavirus concerns
  • Global bond yields were lower coupled with firmer JPY and CHF currencies with focus on World Health Organization said to be considering issuing a global alarm on China’s spreading coronavirus.
  • EUR/USD was slightly higher as EU data continued to hint of stabilization taking root (higher YoY German inflation reading; better German unemployment data). EUR/USD holding above the 1.10 level.
  • GBP/USD was softer by 0.2% ahead of the BOE rate decision. Today’s decision seen as a ‘close call’ on whether the BOE cuts interest rates for the 1st time since mid-2016.
  • USD/JPY was lower but holding above key short-term support of 108.70 despite the growing concerns of the coronavirus. USD sell stops lurking below the level and break would open the door to retest the pivotal 105 support area.
  • USD/CNH Offshore yuan weakens to 7 per dollar for the first time in a month as the spread of coronavirus fans concern over a slowdown in China’s economy (**Note: onshore market remains closed for Lunar New Year Holiday)

Economic Data

  • (NL) Netherlands Jan Producer Confidence Index: 2.5 v 2.9 prior
  • (ZA) South Africa Dec M3 Money Supply Y/Y: 6.2% v 7.5%e; Private Sector Credit Y/Y: 6.1% v 6.4%e
  • (NO) Norway Dec Retail Sales M/M: –2.0% v 0.6%e
  • (DK) Denmark Dec Unemployment Rate: 3.1% v 3.1% prior; Gross Unemployment Rate: 3.7% v 3.7% prior
  • (DE) Germany Jan CPI Saxony M/M: -0.6% v +0.6% prior; Y/Y: 1.8% v 1.4% prior
  • (CH) Swiss Jan KOF Leading Indicator: 100.1 v 97.0e
  • (AT) Austria Q4 Preliminary GDP Q/Q: 0.3% v 0.1% prior; Y/Y: 1.1% v 1.6% prior
  • (AT) Austria PPI M/M: 0.0% v 0.2% prior; Y/Y: -0.4% v -1.1% prior
  • (HK) Hong Kong Dec Trade Balance (HKD): -32.5B v -33.7Be; Exports Y/Y: +3.3% v +2.7%e; Imports Y/Y: -1.9% v -1.9%e
  • (SE) Sweden Nov Non-Manual Workers’ Wages Y/Y: 2.6% v 2.7% prior
  • (DE) Germany Jan Net Unemployment Change: -2.0K v +5.0Ke; Unemployment Claims Rate: 5.0% v 5.0%e
  • (DE) Germany Jan CPI Brandenburg M/M: -0.6% v +0.6% prior; Y/Y: 1.7% v 1.8% prior
  • (DE) Germany Jan CPI Hesse M/M: -0.7% v 0.5% prior; Y/Y: 1.9% v 1.5% prior
  • (DE) Germany Jan CPI Bavaria M/M: -0.8% v +0.5% prior; Y/Y: 1.5% v 1.3% prior
  • (DE) Germany Jan CPI Baden Wuerttemberg M/M: -0.7% v +0.6% prior; Y/Y: 1.7% v +1.5% prior –
  • (IT) Italy Dec Preliminary Unemployment Rate: 9.8% v 9.7%e
  • (IS) Iceland Jan CPI M/M: -0.7% v +0.1% prior; Y/Y: 1.7% v 2.0% prior
  • (DE) Germany Jan CPI North Rhine Westphalia M/M: -0.6% v +0.5% prior; Y/Y: 1.8% v 1.7% prior
  • (PT) Portugal Jan Consumer Confidence Index: -7.8 v -7.2 prior; Economic Climate Indicator: 2.2 v 2.1 prior
  • (ZA) South Africa Dec PPI M/M: 0.2% v 0.1%e; Y/Y: 3.4% v 3.4%e
  • (EU) Euro Zone Dec Unemployment Rate: 7.4% v 7.5%e (lowest level in 2008)
  • (EU) Euro Zone Jan Business Climate Indicator: -0.23 v -0.20e ; Economic Confidence: 102.8 v 101.8e; Industrial Confidence: -7.3 v -8.8e; Services Confidence: 11.0 v 11.3e; Consumer Confidence (final): -8.1 v -8.1 prelim
  • (BE) Belgium Dec Unemployment Rate: 5.2% v 5.2% prior

Fixed Income Issuance

  • (DK) Denmark sold total DKK0B (nil) in 1- month and 3-month Bills (rejected all bids)
  • (IT) Italy Debt Agency (Tesoro) sold total €6.0B vs. €5.0-6.0B indicated range in 5-year and 10-year BTP Bonds
  • Sold €2.75B vs. €2.25-2.75B indicated range in 0.35% Feb 2025 BTP bonds; Avg Yield: 0.31% v 0.61% prior; Bid-to-cover: 1.36x v 1.47x prior
  • Sold €3.25B vs. €2.75-3.25B indicated range in 1.35% Apr 2030 BTP; Avg Yield: 0.94% v 1.35% prior; Bid-to-cover: 1.24x v 1.33x prior
  • (IT) Italy Debt Agency (Tesoro) sold €2.75B vs. €2.25-2.75B indicated range in 0.00% Jan 2025 CCTeu (Floating Rate bonds); Avg Yield: 0.18% v 0.71% prior; Bid-to-cover: 1.32x v 1.75x prior

Looking Ahead

  • (BE) Belgium Jan CPI M/M: No est v 0.1% prior; Y/Y: No est v 0.8% prior
  • 05:30 (HU) Hungary Debt Agency (AKK) to sell 3-year, 5-year and 10-year) Bonds
  • 06:00 (IL) Israel Dec Unemployment Rate: No est v 3.9% prior
  • 06:00 (BR) Brazil Jan FGV Inflation IGPM M/M: 0.5%e v 2.1% prior; Y/Y: 7.5%e v 7.3% prior
  • 06:00 (PT) Portugal Dec Industrial Production M/M: No est v -0.6% prior; Y/Y: No est v 0.2% prior
  • 06:00 (PT) Portugal Dec Retail Sales M/M: No est v 0.8% prior; Y/Y: No est v 3.7% prior
  • 06:00 (CA) Canada Jan CFIB Business Barometer: No est v 55.5 prior
  • 06:00 (CZ) Czech Republic to sell 6-month bills
  • 06:30 (IS) Iceland to sell 6-month Bills
  • 07:00 (UK) Bank of England (BOE) Interest Rate Decision: Expected to leave Interest Rate unchanged at 0.75%; Expected to leave Corporate Bond Target at £10B and Asset Purchase Target at £435B
  • 07:00 (UR) Ukraine Central Bank (NBU) Interest Rate Decision: Expected to cut Interest Rates by 200bps to 11.50%
  • 07:00 (MX) Mexico Q4 Preliminary GDP Q/Q: -0.2%e v 0.0% prior; Y/Y: -0.5%e v -0.3% prior
  • 07:00 (ZA) South Africa Dec Budget Balance (ZAR): +8.7Be v -15.1B prior
  • 07:30 (UK) BOE Gov Carney post rate decision press conference
  • 07:00 World Health Organization Emergency Committee meeting
  • 08:00 (RU) Russia Gold and Forex Reserve w/e Jan 24th: No est v $558.9B prior
  • 08:00 (DE) Germany Jan Preliminary CPI M/M: -0.6%e v +0.5% prior; Y/Y: 1.7%e v 1.5% prior
  • 08:00 (DE) Germany Jan Preliminary CPI EU Harmonized M/M: -0.7% est v +0.6% prior; Y/Y: 1.7%e v 1.5% prior
  • 08:00 (UK) Daily Baltic Dry Bulk Index
  • 08:30 (US) Q4 Advance GDP Annualized Q/Q: 2.1%e v 2.1% prior; Personal Consumption: 2.0%e v 3.2% prior
  • 08:30 (US) Q4 Advance GDP Price Index: 1.8%e v 1.8% prior; Core PCE Q/Q: 1.6%e v 2.1% prior
  • 08:30 (US) Initial Jobless Claims: 215Ke v 211K prior; Continuing Claims: 1.74Me v 1.731M prior
  • 08:30 (US) Weekly USDA Net Export Sales
  • 09:00 (BE) Belgium Q4 Preliminary GDP Q/Q: No est v 0.4% prior; Y/Y: No est v 1.6% prior
  • 10:30 (US) Weekly EIA Natural Gas Inventories
  • 12:00 (CA) Canada to sell 5 Year Bonds
  • 15:15 (CA) Bank of Canada (BOC) Beaudry
  • 16:00 (NZ) New Zealand Jan ANZ Consumer Confidence Index: No est v 123.3 prior
  • (MX) Mexico Dec YTD Budget Balance (MXN): No est v -167.2B prior
  • 18:00 (KR) South Korea Dec Industrial Production M/M: +0.7%e v -0.5% prior; Y/Y: +1.0%e v -0.3% prior
  • 18:30 (JP) Japan Jan Tokyo CPI Y/Y: 0.7%e v 0.9% prior; CPI (ex-fresh food) Y/Y: 0.8%e v 0.8% prior; CPI (ex-fresh food/energy) Y/Y: 0.9%e v 0.9% prior
  • 18:30 (JP) Japan Dec Jobless Rate: 2.3%e v 2.2% prior; Job-To-Applicant Ratio: 1.57x v 1.57 prior
  • 18:30 (JP) Japan Dec Dept. Store, Supermarket Sales Y/Y: -2.5%e v -1.8% prior
  • 18:30 (JP) Japan Dec Preliminary Industrial Production M/M: +0.7%e v -1.0% prior; Y/Y: -3.6%e v -8.2% prior
  • 19:01 (UK) Jan GfK Consumer Confidence: -9e v -11 prior
  • 19:30 (AU) Australia Q4 Preliminary PPI Q/Q: No est v 0.4% prior; Y/Y: No est v 1.6% prior
  • 19:30 (AU) Australia Dec Private Sector Credit M/M: 0.2%e v 0.1% prior; Y/Y: 2.3%e v 2.3% prior
  • 20:00 (CN) China Jan Manufacturing PMI: 50.0e v 50.2 prior; Non-manufacturing PMI: 53.0e v 53.5 prior; Composite PMI: No est v 53.4 prior
  • 21:00 (SG) Singapore Dec M2Money Supply Y/Y: No est v 5.9% prior; M1 Money Supply Y/Y: No est v 6.6% prior
  • 22:30 (JP) Japan to sell 3-Month Bills
  • 23:00 (JP) Japan Nov Vehicle Production Y/Y: No est v -11.9% prior