Week Ahead Coronavirus Continues to Remain Market Focus

Week Ahead: Coronavirus Continues to Remain Market Focus

Market participants began the week wondering whether China would be able to contain the Coronavirus or if it would spread across the country and to other parts of the world. Markets quickly discovered the answer, and it wasn’t good for risk. For the most part, the FOMC was a non-event. However, the BOE did cause some excitement by leaving rates unchanged. Expectations were a 50-50 chance of a rate cut. As a result, GBP/USD has gone bid from near 1.3000 at the time of the announcement to 1.3200 at today’s close. Earnings were stellar this week for many of the top tech companies such as Apple, Tesla, Microsoft and Amazon.

As of Friday morning, China’s National Health Commission said the total number of confirmed Coronavirus cases was 9,692. That figure does not include cases outside of China and is surely to increase throughout the weekend. Reports suggest that the virus has spread to 25 countries. China has extended its Lunar New Year until Monday and many companies in China are encouraging their employees to work from home next week. In addition, some multinational companies have temporarily closed, and airlines have suspended flights to and from China. This trend is likely to continue until the rate of new cases begins to fall.

This week also brings the beginning of the primary voting season for the US Presidential Election on November 3rd. On Monday, the we get the Iowa caucuses. Current polling shows Joe Biden and Bernie Sanders in a close race for the Democratic delegates.

The US Senate continues its debate next week regarding the Impeachment of President Trump. So far, the process has had no effect on the markets. However, if that changes and markets feel there is a chance he may be impeached, risk off may ensue.

Earnings reports continue through next week with highlights including GOOG, F, DIS, BIDU, and UBER.

In addition, economic data will focus on Manufacturing PMIs, the RBA Interest Rate Decision, and Canadian and US employment data. Expected economic data for next week is as follows:

Monday

China Caixin Manufacturing PMI
Global Markit Manufacturing PMI
US ISM Manufacturing PMI
ECB’s Lagarde speech

Tuesday

RBA Interest Rate Decision

Wednesday

New Zealand Employment Change
China Caixin Services and Composite PMI
Global Services and Composite PMI
RBA’s Lowe Speech
Euro Area Retail Sales
ECB’s Lagarde Speech
Canada Trade Balance
US Trade Balance
US ADP Employment Change
US ISM Non-Manufacturing PMI
Crude Oil Inventories

Thursday

Australia Trade Balance
ECB’s Lagarde Speech
ECB Economic Bulletin

Friday

RBA’s Lowe Speech
RBA Statement on Monetary Policy
China Trade Balance
Germany Trade Balance
Canada Employment Change
US Non-Farm Payrolls

Chart to Watch: AUD/USD Weekly

Source: Tradingview, City Index

The AUD/USD has been trading lower since 2011, when it put in a high near 1.1080. The pair made a low in 2016 near .6850 and bounced to near .8125. However, in late summer of 2019, AUD/USD took out the 2016 lows and traded down to .6670 before bouncing up to near .7000. The pair is now threatening to take out the summer lows near .6670. A series of lower lows and lower highs is a downward trend! The next major level of support is near .6550, which is horizontal support from 2009. Resistance on the weekly chart is up at .7000.

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.

ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.

City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.

The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.

The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.

The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.

This advertisement has not been reviewed by the Monetary Authority of Singapore.