Signs that the spread of the coronavirus is slowing down

Despite some negative headlines over the weekend, there have been more signs in recent days that the spread of the coronavirus is slowing down.
When it comes to the number of deaths, it is now above 800, which exceeds the level from SARS in 2003. The death count should slow down with a lag compared to the number of infections.
China is restarting production today following an extended holiday. It could lead to a pick-up in the contagion rate and hence uncertainty will be with us for a while.
We continue to look for a V-shape scenario for Chinese growth with a sharp decline in February and March but a rebound during Q2, see also Research: Vshape scenario for global growth on back of coronavirus, 3 February 2020.

Allan von Mehren Danske Bank A/S

A run-down of the latest data

Infections. The number of infections has increased to 40,536. However, the daily rate of increase has slowed down. The absolute rise in cases was 2,500-3,000 in the past two days, down from 3,500-4,000 five days ago. The number of suspected cases showed the first decline today when it dropped to 23,589 from 28,942 yesterday.

The slowdown in contagion is mostly evident outside the Hubei province (the epicentre of the crisis). Today 416 new cases were reported, the lowest level in two weeks (Chart 2). The daily percent is down to 4% from above 50% two weeks ago. The percent increase in cases outside mainland China is also fairly low at 5%.

Based on the recent developments our models point to a peak around 60,000 cases, 48,000 in Hubei and 12,000 outside Hubei (Chart 4 and 5).

Death rate. The number of deaths rose to 910 today. Of the deaths 96% were in the Hubei province. The total death rate is 2.2% with 2.9% inside the Hubei province and 0.4% outside. Outside mainland China, the death count is still two, leading to a death rate of 0.5%.

Download The Full Flash Comment

Author

Allan von Mehren

Danske Bank A/S

EUR/USD flirts with daily highs, retargets 1.1900

EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold clings to gains just above $5,000/oz

Gold is reclaiming part of the ground lost on Wednesday’s marked decline, as bargain-hunters keep piling up and lifting prices past the key $5,000 per troy ounce. The precious metal’s move higher is also underpinned by the slight pullback in the US Dollar and declining US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP in choppy price action, weighed down by falling institutional interest

Bitcoin's upside remains largely constrained amid weak technicals and declining institutional interest. Ethereum trades sideways above $1,900 support with the upside capped below $2,000 amid ETF outflows.

Week ahead – Data blitz, Fed Minutes and RBNZ decision in the spotlight

US GDP and PCE inflation are main highlights, plus the Fed minutes. UK and Japan have busy calendars too with focus on CPI. Flash PMIs for February will also be doing the rounds. RBNZ meets, is unlikely to follow RBA’s hawkish path.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.