· The World Health Organization (WHO) called a new coronavirus that has killed 18 people in China and infected around 650 globally “an emergency in China” on Thursday, but stopped short of declaring the epidemic of international concern.
· Coronavirus cases rise to more than 800 worldwide as China confirms death toll has risen to 25
China said on Friday local time that the total number of coronavirus cases in mainland China rose to 830 and the death toll has risen to 25. It comes as the fast-spreading infection prompted local authorities to quarantine several major cities and cancel Lunar New Year’s events in Beijing and elsewhere.
· ECB holds rates as strategic review gets underway
The European Central Bank (ECB) on Thursday held interest rates steady as it launched its first strategic review since 2003, in a bid to establish whether its inflation target is still appropriate.
In its first rate decision of the year, the central bank’s Governing Council voted unanimously to keep the main deposit rate at a historic low of -0.5%, in line with market expectations. The marginal lending facility remained at 0.25% and the main refinancing operations rate stayed at 0%.
In a press conference following the decision, ECB President Christine Lagarde said rates will “remain at their present or lower levels until we have seen the inflation outlook robustly converge to a level sufficiently close to, but below 2% within our projection horizon, and such convergence has been consistently reflected in underlying inflation dynamics.”
The strategic review launched Thursday was one of the first moves announced by Lagarde upon starting her tenure, with the central bank’s persistent low interest rate stance under fire from market participants who say it has become detrimental to economic growth.
In a press release on Thursday afternoon, the ECB revealed that the review will be concluded by the end of 2020, and will encompass “quantitative formulation of price stability, monetary policy toolkit, economic and monetary analyses and communication practices.”
Lagarde told the press conference on Thursday that the risks surrounding the euro area growth outlook “related to geopolitical factors, rising protectionism and vulnerabilities in emerging markets remain tilted to the downside, but have become less pronounced as some of the uncertainty surrounding international trade is decreasing.”
Inflation is expected to increase over the medium term, but she reiterated that other policy areas must “contribute more decisively” in order to “reap the full benefits” from the ECB’s accommodative policy measures.
· The dollar rose against the euro on Thursday after the European Central Bank left unchanged its key interest rates and stimulus programs and launched a broad review of its policy that was likely to see new President Christine Lagarde redefine the ECB’s main goal and how to achieve it.
The euro zone’s central bank has fallen short of its inflation target of just under 2% for years, even after Lagarde’s predecessor, Mario Draghi, launched increasingly aggressive stimulus measures.
The euro was 0.37% lower against the greenback at $1.1051, its weakest since Dec. 9.
The Japanese yen strengthened and China’s yuan fell to a two-week low on Thursday as investors grew more anxious about the spread of a virus in China.
Deaths from the flu-like coronavirus stand at 17 and almost 600 people are infected. China has locked down Wuhan, a city of 11 million people, where the outbreak was believed to have originated.
The moves up in the safe-haven yen and down in the yuan were measured, suggesting investors were not yet panicking about the virus.
Against the yen, which tends to draw investors during times of geopolitical or financial stress, the dollar was 0.36% lower at 109.43 yen.
The dollar gained 0.36% versus the offshore Chinese yuan to 6.9337 yuan. The Chinese currency has now lost more than 1% of its value since it touched six-month highs on Monday. The onshore yuan is on course for its worst week since August.
· Liberal billionaire George Soros took aim at President Donald Trump and China on Thursday at his annual dinner amid the World Economic Forum.
Chinese President Xi Jinping is “trying to exploit Trump’s weaknesses,” Soros told the gathering. He also accused Xi of using “artificial intelligence to have total control of his people.”
And while Soros did not discuss the Democratic presidential primary, in which he has yet to make an endorsement, he said the 2020 election will not just determine the relationship between Trump and Xi, but the “fate of the world.”
· U.S. President Donald Trump announced on Thursday that tariff quotas on washing machines would be allocated on a quarterly rather than an annual basis, saying that domestic producers had begun to do better in the face of foreign competitors but more was left to be done.
Under the original quota system, an annual limit was placed on washer imports. As of Feb.7, the administration will allocate the quota on a quarterly basis, with within-quota quantities of 1.2 million washers.
· Oil prices fell 2% on Thursday on concern that the spread of a virus from China could lower fuel demand if it stunts economic growth, but losses were limited by a drawdown in U.S. crude inventories.
Brent crude futures lost $1.20, or 1.9%, to trade at $62.00 per barrel, after having touched $61.25 a barrel, the lowest since early December.
U.S. West Texas Intermediate crude futures fell $1.15, or 2%, to settle at $55.59 a barrel. The contract earlier fell to $54.77 a barrel, the lowest since Nov. 1.
Reference: CNBC, Reuters
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