23.01 - Asia faces crisis because of coronavirus spreading
Even though we saw a pretty good recovery in the Asian segment of the market yesterday, it didn’t really save the segment form dropping the price for major indices today. All because of the coronavirus threats spreading across China. The situation became so dire that one of the cities was shut down for quarantine in order to stop the spreading of the virus further and contaminating other countries.
The situation was perfectly described by Michael McCarthy, chief market strategist at CMC Markets in Sydney “Markets are expressing concern about the growth outlook,” he said. “The coronavirus has introduced some caution. There is no reason to expect a global pandemic now, but there is some repricing in financial markets.”
In the meantime, almost all of the major assets have gotten a hit from the current world situation. It wasn’t long after Chinese and Asian markets fell that USD started to decline as well. As right now USD is looking lower than we would care for. This was the opportunity that GBP and yen successfully took and grew. Other currencies were not successful in their attempts to grow, as we can see in the numbers right now.
Today is not going to be easy as we are waiting for monetary policies report from euro. This week has already been marked by similar reports from Japan and Canada and the effect from them as right here in front of us. Rated in Japan were left unaltered while rates in Canada are expected to be lowered. Both of the decision call for reaction from traders and we can see and guess what this reaction is going to be according to the present movements of the market.
Eyes of the world are not only on China and euro. We are also watching pound pretty closely. Brexit is very close – in fact it is going to happen in the end of next week, so we have to be an alert for any rapid GBP/USD movements for these 8 days.
Here is what major assets look like today:
Topix decreased 0.7 percent.
Kospi lost 1 percent.
Shanghai Composite declined 2.7 percent.
Hang Seng from Hong Kong shed 2.05 percent
S&P 500 are lower by 0.2 percent.
Euro was flat - $1.1084.
Pound grew 0.5 percent - $1.3123.
Yen advanced 0.5 percent – 109.55 per dollar.
Canadian dollar decreased 0.7 percent - $1.3166.
Tesla recovered 4.1 percent - $569.56.
Apple added 0.4 percent - $317.7.
Facebook nudged a little bit lower percent – $221.32.
Amazon lost 0.2 percent - $1887.46 per share.
Google advanced 0.1 percent - $1484.17.
WTI dropped 0.7 percent - $55.66 per barrel.
Brent is by 0.7 percent lower - $62.18 per barrel.
Gold declined 0.1 percent - $1557.5 per ounce.
Silver shed 0.5 percent - $17.72 per ounce.
Platinum dropped 1 percent – $1005.02.