What you need to know for the open: Coronavirus to keep markets on edge

The coronavirus is causing some stall in FX markets and Friday's close leaves a consolidative tone for today's open ahead of key risk events for the Aussie trading as a proxy to the coronavirus driver. The recent changes to the methodology for tracking cases caused widespread uncertainty in markets last week.

The latest on the virus has the total number of coronavirus cases in mainland China has reached 68,500, and the total deaths has reached 1,665, according to the latest statistics from China’s National Health Commission on Sunday. China’s National Health Commission reported that there were 2,009 new confirmed cases of the coronavirus and 142 additional deaths as of Feb. 15.

Markets appear to be expecting a short-lived economic impact, but we are very much in “wait-and-see” mode. This weekend, China announced increased fiscal spending to help support the economy, with corporate tax cuts on the agenda which may help to buoy markets in the open this week. Meanwhile, the IMF emphasised the importance of fiscal stimulus and structural reforms to boost what was already an anaemic outlook for global growth. The uncertainty around the coronavirus could continue to carry more weight in markets in a relatively scares data event calendar in the week ahead. For a quick recap of the closing events for Friday, see here: Forex Today: Coronavirus weight on growth keeping investors on the back foot

Key events for the week ahead

The immediate risk for this week falls on the Australian calendar with the Reserve Bank of Australia's minutes grabbing the market's attention considering that the RBA has displayed a preference to more clearly outline its thinking via Minutes than via the monthly statement. The wave of communication post the 4th Feb meeting reinforced the bar to easing is high. However, we will look for any signs that would force the RBA to reconsider its stance. In addition to the minutes this week, traders will look to the Aussie jobs report: "Assuming the unemployment rate rises 0.1%pts per month, the earliest the RBA would cut is in June assuming a 5.5% print in May is considered a material deterioration. We have headline at +12k, unemployment rate at 5.2% and part rate unchanged @ 66%. There is likely to be greater uncertainty for the Jan print," analysts at TD Securities explained. 

Another crucial event will come with the Federal Reserve's minutes, although there are not many expectations of new insights here following what the Fed's chair, Jerome Powell's recent testimony. "However, they will likely include an update on the review being conducted by the Fed. We expect the review to result in the adoption of some form of average inflation targeting, which is dovish given sub 2% inflation," analysts at TD Securities argued. 

In other G10's, the UK's Consumer Price Index and Manufacturing PMIs will be a focus. However, the Bank of England's estimate of 1.8% CPI YoY is ambitious and markets will be looking to the PMIs for clues in how not only how UK/EU trade talk sentiment is affecting, but also how the coronavirus is impacting. In Canada, we have the Consumer Price Index and Retails Sales with the markets looking for improvements to bolster the economic outlook following a muted performance through 2019.

Price analysis in focus 


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD pares weekly losses near 1.1150, German GDP, US inflation eyed

EUR/USD licks its wounds at the lowest levels in 20 months, recently easing from intraday high. Markets remain lackluster amid mixed concerns over Russia-Ukraine and softer start to Friday. ECB’s Kazimir expects near-term increase in inflation, improvement in German Consumer Confidence teases ECB hawks ahead of key GDP.


GBP/USD bounces off 11-week-old support but not out of the woods

GBP/USD fades the corrective pullback from a horizontal area established since early November, retreating to 1.3380 amid Friday’s Asian session. The cable pair dropped during the last two trading sessions before the bears took a breather around the five-week low of 1.3357.


Gold rebounds ahead of US PCE inflation, not out of the woods yet Premium

Gold price attempts a bounce as the US dollar retreats ahead of US PCE inflation. After Wednesday’s $40 sell-off, gold price tumbled another $23 on Thursday, as bulls finally surrendered the $1,800 area to hit the lowest level in two weeks at $1,792. 

Gold News

Why Bitcoin has entered a new bear market

Bitcoin price has tumbled to a multi-month low below $33,000, as the leading cryptocurrency loses 50% of its value from its all-time high in November 2021. This marks the second-worst sell-off since the bear market that spanned from 2018 to 2020. 

Read more

Apple (AAPL) Earnings for Q1 beats estimates on EPS and revenue

Apple (AAPL) reported earnings after the close on Thursday. Earnings per share (EPS) came in at $2.10 versus the estimate of $1.89. Revenue was $123.9 billion versus the estimate for $118.66 billion. AAPL is trading at $162.40 in Thursday's aftermarket, a change of 2% versus the regular session close of $159.16.

Read more