Chinese markets reopened last night following an extended Lunar New Year holiday. With their markets playing catch up the main Chinese index plunged up to 9% on the open. Chinese authorities did what they could to cushion the blow over the weekend, they confirmed liquidity injections of up to $180 billion and additionally banned short selling. Global markets have not reacted negatively to this as a lot of the panic was already priced-in last week. No doubt this week’s trade will be focused on Coronavirus and any positive or negative developments.
On the data front, global PMIs will certainly be on the watchlist. Today, from the UK, we’ll be observing manufacturing PMI followed by construction tomorrow and the all-important services PMI on Wednesday. In addition, US non-farm payrolls are due for release on Friday. However, one thing’s become clear in the last week or so, economic data will play second fiddle to any Coronavirus developments as the global economy continues to measure up accurate implications.
In respect to central banks, the Reserve Bank of Australia will make an announcement on monetary policy tonight. The RBA lowered rates 3 times last year to a record low of 0.75%. The pressure is now back on for another cut with the economy still soft, especially in light of the recent devastating fires.
Written by Viv Savani. 8:42am, February 3rd 2020
The details expressed in this market report are for information purposes only and are not intended as a solicitation for funds or a recommendation to trade. Cornhill International Payments limited accepts no liability whatsoever for any loss or damages suffered through any act or omission taken as a result of reading or interpreting any of the above information.