China’s State Assets Regulator: Impact of coronavirus outbreak on industries will mainly show in Feb

Dhwani Mehta FXStreet

Amid risk-off at full steam in Asia, as rising coronavirus risks globally spook investors, China State‑owned Assets Supervision and Administration (SASAC), state assets regulator, Vice Chairman Ren came out on the wires, via Reuters, noting that the impact of coronavirus outbreak on industries will mainly show in February.

The scheduled production targets and reform plans of key State-owned enterprises will not be changed due to the COVID19 epidemic, he added.

SASAC’s spokesman said that they will guide centrally held firms to extend or revise contracts with some small and medium-sized firms hit hard by coronavirus epidemic.

Further Quotes:

Coronavirus outbreak has an impact on central SOEs’ overseas projects and investments.

Will strengthen health monitoring of central SOEs’ employees to be dispatched to overseas projects for coronavirus containment.

Meanwhile, China’s Trade Body noted: some customers in Russia, Turkey, the Middle East and North Africa have stopped accepting deliveries of China’s metal products amid coronavirus outbreak.

Separately, South Korea’s President Moon expressed his concerns about the virus spread, citing that the economy is in an emergency situation due to coronavirus.

Additional Comments:

The government should use all available policies to boost the local economy.

Policy support needed to boost corporate, consumer spending at home.

FX Implications:

The demand for the higher-yielding assets is almost absent so far this Tuesday, as markets remain wary over the economic impact of the virus outbreak internationally. The virus infection rate in Japan picked up while China reported 1,886 new cases on Feb. 17^th.

Therefore, Asian stocks are in a sea of red alongside the US stock futures and Treasury yields while the safe-haven yen is gaining ground near 109.70 vs. the greenback. The Chinese proxies, the Antipodeans, are the worst-hit across the fx board, with AUD/USD down 0.40% at 0.6685 while the Kiwi attacks 0.6400.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

AUD/USD bulls regain control above 0.6950 amid USD retreat

AUD/USD regains traction and extends the previous day's bounce from the weekly low, aiming for 0.7000 in Asia on Friday. The overnight pullback in US bond yields keeps the US Dollar below an 18-month high, which in turn offers some support to the pair. Meanwhile, hawkish RBA expectations also keep the major underpinned.

USD/JPY holds gains near 158.00 after Japan's weak Household Spending data

USD/JPY clings to gains around 158.00 after data showed on Friday that Japan's Household Spending fell for the ninth straight month, undermining the Japanese Yen. Meanwhile, the US Dollar remains depressed as the overnight fall in US bond yields counters a hawkish Fed and geopolitical uncertainties, could cap any downside in the pair.

Gold remains range-bound below $4,200

Gold has given up some ground after an initial bullish attempt to reach weekly highs, returning to below the $4,200 mark per troy ounce on Friday. The US Dollar’s strong upside momentum, combined with rising US Treasury yields across the curve, seems to keep further gains in the yellow metal under scrutiny.

Has Bitcoin really escaped the macro forces it was built to fight?

Over 17 years ago, Satoshi Nakamoto designed Bitcoin (BTC) on the back of a global financial crisis as an alternative to the global monetary system outside the control of central banks, governments and traditional intermediaries. This raises a key question: has Bitcoin really become independent of the macroeconomic forces it was built to challenge?

The Euro is not the sick man of Europe. France's bond market is

EUR/USD remains under pressure, near the 17-month low of 1.1161 reached on Monday. The pair has lost more than 7% since its yearly peak, as concerns over France's public finances increasingly weigh on the single currency. But behind the weakness of the Euro (EUR), the problem does not necessarily lie with the European economy as a whole.