Here is what you need to know on Monday, February 10:
The coronavirus has already taken the lives of over 900 people and infected over 40,000. While the disease continues spreading, the People's Bank of China has announced fresh measures to provide liquidity via re-lending funds and soothe markets.
Chinese consumer inflation rose by 5.4% in January – the fastest in eight years and due to soaring pork prices– while producer prices advanced by 0.1%. Moreover, several factories in the mainland are returning to production, providing a semblance of calm.
Markets are mixed amid news of the outbreak and the dollar is consolidating its gains, with EUR/USD remaining close to 1.0950, GBP/USD around 1.29 and USD/JPY close to 110. US Non-Farm Payrolls showed an increase of 225,000 jobs in January, better than originally expected and wages rose by 3.1% yearly. Gold has stabilized around $1,570.
Oil prices are on the back foot as Russia seems reluctant to bring forward a meeting between OPEC and non-OPEC members. The country sees no urgent need to cut production despite a recommendation for a 600kbpd recommendation by the group's technical committee.
Eurozone Sentix Investor Confidence is set to show a drop in business sentiment. German and French industrial figures dropped sharply in December, in publications that weighed on the euro last week.
UK: Prime Minister Boris Johnson is planning infrastructure spending to fulfill election promises. The pound suffered from fears of a no-deal Brexit last week.
Michelle Bowman and Patrick Harker, two members of the Federal Reserve, will speak later today and comment on recent upbeat figures.
Cryptocurrencies have been extending their gains over the weekend with Bitcoin topping $10,000 and Ethereum advancing to $225.
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Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
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