· CORONAVIRUS UPDATE:
- Too early to tell whether the outbreak is slowing in China
China may be reporting fewer new cases of coronavirus and fewer COVID-19 deaths, but it does not mean the country’s outbreak is slowing, immunologist Anthony Fauci told CNBC on Tuesday. “I think we need to give it a few more days to determine if that’s real or if that’s the variability that you generally see,” Fauci, a member of President Donald Trump’s coronavirus task force, said on “Closing Bell.” Fauci, who is the director of the National Institute of Allergy and Infectious Disease, was referencing reports Tuesday that the number of new daily cases in China fell below 2,000 for the first time since Jan. 30. Chinese officials also reported 98 deaths, the first time the daily toll was below 100 since Feb. 11.
- World Health Organization (WHO) Director-General Tedros Adhanom Ghebreyesus said Chinese data “appears to show a decline in new cases” but any apparent trend “must be interpreted very cautiously.”
“We have not seen sustained local transmission of coronavirus except in specific circumstances like the Diamond Princess cruise ship,” he said.
- Raymond James said China’s delayed response is inciting comparisons to the Soviet Union’s response to the Chernobyl nuclear disaster, and that the economic and market impact could get worse. China’s “slow reaction and continued unanswered questions appear to be sowing real concerns among the Chinese people,” wrote a team of Raymond James analysts led by Chris Meekins in a note to clients, which is amplifying concerns over General Secretary Xi and the Chinese Communist Party’s grip on power. Raymond James said that following conversations with government officials and academics, it believes the “worst is yet to come” and that the “market is underappreciating the potential dangers and what the key government leaders on the virus are saying.”
- China says total fatalities top 2,000
China’s National Health Commission said there were 1,749 confirmed new cases on the mainland and 136 additional deaths as of Feb. 18. Most of them occurred in the Hubei province, the epicenter of the outbreak. (see 7:03 a.m. update). Health authorities reported a total of 74,185 confirmed cases and 2,004 cumulative deaths so far.
- Economists are warning of potential mass layoffs in China later this year if the virus is not contained soon.
“The employment situation is OK in the first quarter, but if the virus is not contained by end-March, then from the second quarter, we’ll see a big round of layoffs,” said Dan Wang, an analyst with the Economist Intelligence Unit (EIU). Job losses could run as high as 4.5 million, he forecast.
- South Korean President Moon Jae-in said the economy there was in an emergency situation and required stimulus as the epidemic had disrupted demand for South Korean goods.
- Singapore announced a $4.5 billion financial package to help contain the outbreak in the city-state and weather its economic impact.
- Singapore sets aside $4 billion to help businesses and households amid coronavirus outbreak
Singapore on Tuesday said it has set aside 5.6 billion Singapore dollars ($4.02 billion) in the coming year to help businesses and households tide through the ongoing coronavirus outbreak.
The Southeast Asian country has reported one of the highest numbers of coronavirus — now known as COVID-19 — infections outside China. As of Monday noon, Singapore has had 77 confirmed cases, 24 of which have been discharged, said its Ministry of Health.
“The outbreak will certainly impact our economy,” said Heng Swee Keat, Singapore’s deputy prime minister and finance minister, in his speech outlining the country’s budget.
- Japan, where the economy was already shrinking and the epidemic has created fears of recession, the spread of the virus has prompted Tokyo to put limits on public crowds while some companies are telling employees to work from home.
- Japan’s government is expected to maintain its assessment that the economy is recovering in a monthly report due on Thursday, two sources familiar with its thinking said, despite the widening fallout from the coronavirus outbreak.
- Coronavirus forces delay of trade fairs and conferences
Over two dozen trade fairs and industry conferences in China and overseas have been postponed due to travel curbs and concerns about the spread of the coronavirus, potentially disrupting deals worth billions of dollars.
· Dollar climbs as weak German data dents euro
The dollar rose on Tuesday to its highest in nearly three years against the euro, which was pressured by a German survey showing slumping investor confidence in Europe’s largest economy.
The euro was 0.38% lower against the dollar at $1.0793, its first fall below the $1.08 level since April 2017.
On Tuesday, Germany’s ZEW research institute said in its monthly survey that investors’ mood deteriorated far more than expected in February, on worries the coronavirus would dampen world trade.
The survey added to expectations the German economy will lose more momentum in the first half as slumping exports keep manufacturers mired in a recession.
Some economists fear the coronavirus, which started in China and is impacting both the global supply chain and Chinese demand, could result in weaker German growth in the first quarter.
The euro has lost around 3.7% of its value against the U.S. dollar this year, its worst year-to-date performance in five years.
Poor euro area data has boosted speculation that monetary policy will remain looser for longer than previously expected.
The U.S. economy has proved more resilient than the rest of the world, keeping the dollar at 4-1/2 month highs against a basket of currencies. Other safe-haven assets such as the Swiss franc and Japanese yen have also benefited.
The Federal Open Market Committee is expected to issue minutes from its Jan. 28-29 meeting on Wednesday.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 99.440, rising from an earlier low of 99.139.
The Japanese yen traded at 109.91 against the dollar, little unchanged after hitting above the 110 level briefly last week.
China’s offshore-traded yuan fell 0.3% to an eight-day low of 7.0109 against the dollar.
Sterling was little changed on the day at $1.2997 after Britain’s new finance minister said he would deliver the budget as planned in three weeks, while a broadly weaker euro also supported the British currency.
· EU to unveil plans to boost European firms, rein in U.S. tech giants
The European Commission will on Wednesday launch the first of a raft of proposals to help European companies exploit their rich trove of industrial data and at the same time rein in online giants Facebook Inc, Alphabet Inc’s Google and Amazon.com Inc .
The data strategy and artificial intelligence discussion papers are part of a bigger scheme to help European companies better compete with U.S. tech giants and state-aided Chinese companies in the digital world.
· Oil near flat; virus impact offsets Libya supply disruptions
Oil prices were near flat on Tuesday, pressured by concerns over the impact on crude demand from the coronavirus outbreak in China, but prices drew support from a reduction in supply from Libya.
Brent crude LCOc1 rose 8 cents to settle at $57.75 a barrel. U.S. West Texas Intermediate (WTI) crude CLc1 futures were unchanged from the previous session, settling at $52.05 a barrel.
Though new cases of the coronavirus in mainland China have dipped, global experts said it was too early to judge if the outbreak is being contained. Forecasters including the International Energy Agency (IEA) have cut 2020 oil demand estimates because of the virus.
The virus is having a wider impact on financial markets. Asian shares fell and Wall Street also retreated after Apple Inc (AAPL.O) said it would miss quarterly revenue guidance due to slower iPhone production and weakened demand in China.
The IEA last week said first-quarter oil demand was likely to fall by 435,000 barrels per day (bpd) from a year ago.
The Organization of the Petroleum Exporting Countries (OPEC) and allied producers including Russia have been considering further production cuts to support prices.
Reference: Reuters, CNBC
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