Hubei confirms 840 new cases of coronavirus and 25 more deaths reported - CCTV

Hubei confirms 840 new cases of coronavirus and 25 more deaths also reported. The headlines are likely to keep the markets on edge, but w can expect ongoing reports of elevated numbers of cases as predicted. Measures to contain the outbreak of the virus to its epicentre in Hubei Province appear to have failed to stop the contagion. On Tuesday morning, Chinese officials said the number of cases had increased 60 percent overnight.

As the death tolls rise, countries, cities and businesses across the globe are now handing out very strong warnings not to travel to mainland China where the authorities are struggling to contain the outbreak of the new coronavirus.

Hong Kong authorities reduced by half the number of flights and shut down rail service to therein which other governments may well be inspired to follow. Additionally, the Chinese government has extended the Lunar New Year holiday until Feb. 3, with some of China’s biggest cities telling businesses not to open until the following week. Also, German officials said Tuesday that they had identified what they believed was the first instance of the virus spreading within Europe.

Market implications

Investors in Asia were gripped yesterday in fear of the contagion of the virus and we could be in for more of the same today, especially seen through the travel sector and in stocks in companies thought to be most vulnerable to the effects of the virus. 

AUD will be a special focus for the day, with the Consumer Price Index, Q4 (CPI). "ANZ expects headline inflation to come in at 0.7% QoQ– a touch higher than market expectations of 0.6% QoQ."  A discount towards 0.68 the figure could be on the offering on a positive surprise in the CPI. 

AUD/USD latest run to the downside, extending territories to well below the channel support, now testing bullish commitments at 0.6750.