It’s been a mad time on the floor - a few points I'm keen to flag:
We then saw the anticipated G7 statement setting the tone: “We…are closely monitoring the spread of the coronavirus disease 2019 (COVID-19) and its impact on markets and economic conditions. Given the potential impacts of COVID-19 on global growth, we reaffirm our commitment to use all appropriate policy tools to achieve strong, sustainable growth and safeguard against downside risks." All pretty standard and no reason to buy risk and it has had little impact on sentiment.
It’s all looking somewhat reminiscent of the GFC, although the two situations are very different – in 2008 it was a banking and liquidity crises – banks didn’t want to lend to other banks for fear of counter party risk and solvency. This is an economic crisis potentially in the making, and more about the spread of a virus and how it alters people’s daily lives and spending habits, not to mention the ability to even get into work to offer services and create products. What started as a concern about the extent of fragility to the Chinese economy has mopped into a worldwide problem. It seems unclear what rate cuts will do though, but the market has demanded them, and central banks have no choice but to meet the market or risk causing more damage and higher volatility.
There are over 92,000 cases now. Spain and Chile have recorded their first cases overnight, Washington have reported two new deaths and seven more cases, and on my count I make it 76 countries. Although most of the cases (outside of China) are concentrated in Korea (5186 cases), Iran (2336) and Italy (2036).
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