· China coronavirus death toll climbs to 82 with at least 2,900 cases worldwide
A novel coronavirus has now taken the lives of at least 82 people in China and sickened at least 2,900 worldwide, including in the U.S. and Europe, as Chinese authorities work to contain the fast-spreading infection.
· Coronavirus prompts automakers to evacuate workers, weigh production delays at Chinese factories
Automakers are withdrawing employees from China and weighing whether to suspend manufacturing in the country as the virus that emerged in Wuhan less than a month ago ravages the mainland.
Most major automakers have restricted or banned travel to the country due to the fast-spreading disease, which as of Monday had taken the lives of at least 82 people in China and sickened 2,900 worldwide. Manufacturing in China was temporarily halted in honor of the Lunar New Year — which kicked off this weekend — but normal operations were due to resume this week. Automakers across the globe with operations in China could keep those plants closed even longer, people familiar with the matter said.
In Shanghai, local officials are prohibiting companies in the city from resuming operations before Feb. 9, Reuters reported. Electric car maker Tesla, which just opened its first factory in China just outside of Shanghai, didn’t return multiple requests for comment.
Business in China is essentially shutdown through Thursday as part of the long Chinese New Year holiday, known as the Spring Festival. Chinese authorities extended the shutdown to Feb. 2 to keep the public at home and avoid spreading infection.
· Fed likely to reassure markets that it is watchful of coronavirus impact
The Fed is not expected to take any action on its benchmark fed funds rate this week, but it is likely to reassure markets that it is watching the outbreak of the coronavirus and other geopolitical uncertainties.
Fed Chairman Jerome Powell is slated to brief the press after the Fed releases its statement Wednesday afternoon, and it is in those comments investors will likely get the most insight into the Fed’s thinking. The Fed starts its two-day meeting Tuesday.
It is still unclear how serious the virus will become, or how it will impact the Chinese and other economies. By Monday, the virus had affected 2,900 people and killed 82.
On the policy side, the Fed is expected to hold rates steady and not signal any other moves.
· The U.S. dollar index, the Japanese yen and the Swiss franc rose on Monday morning, while the offshore yuan tumbled to a 2020 low as growing fears about the spread of a coronavirus from China pushed investors into safer assets.
While safe-haven assets have strengthened, currency moves were limited. The yen was the main beneficiary, up 0.3% to 108.94, although it remained well below the peak hit on Jan. 8.
The dollar index was up 0.09%, last at 97.94.
The offshore yuan shed as much as 0.9% to 6.99 per dollar , its weakest since Dec. 30.
The yuan has gone into a tailspin since it rallied to a 5-1/2-month high earlier in January. The dollar has gained more than 2% versus the Chinese currency since last Monday.
Traders said low liquidity could exacerbate market moves. Financial markets in China, Hong Kong, Singapore and Australia are closed for holidays.
The euro fell to a two-month low against the yen of 119.90 yen and was last 0.3% lower on the day to 120.08.
The euro erased its earlier gains against the dollar after the Ifo institute said that German business morale deteriorated unexpectedly in January. The euro was last 0.02% weaker at $1.102.
· Crude futures dropped 2% to three-month lows on Monday as the death toll from China’s coronavirus grew, curtailing travel and fueling expectations of slowing oil demand.
Brent crude LCOc1 settled at $59.32 a barrel, losing $1.37, or 2.3%, its lowest since Oct. 21. U.S. crude CLc1 settled at $53.14 a barrel, was down $1.05, or 1.9%, its lowest since Oct. 2.
Global stock exchanges, which oil prices tend to follow, also sank as investors grew increasingly anxious about the widening crisis. Demand spiked for safe-haven assets, such as the Japanese yen and Treasury notes.
· Prime Minister Boris Johnson’s decision to launch one of the biggest advertising campaigns since World War Two to get Britain ready for a no-deal Brexit was largely ineffective, according to a report by the government’s spending watchdog.
The “Get Ready for Brexit” campaign stated that the United Kingdom would be leaving the EU on Oct. 31 last year and urged the public to visit a new website to check what they needed to do to prepare for a no-deal exit.
The government had allocated 100 million pounds ($131 million) for its Brexit preparation campaign with adverts running across television, radio, newspapers, online and on billboards. Roadshows and campaigns targeting specific groups, such as road hauliers were also held.
Reference: CNBC, Reuters
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