Markets update: Markets paused for a breath on virus concerns

Markets | Mon 27 Jan | Author – Business & Finance

Stocks and crude oil are tumbling once again, with havens including the yen and treasuries jumping, as fears deepen about the impact of the deadly coronavirus on near-term growth, writes Ian Slattery.

The yield on the benchmark 10-year treasury note plunged to its lowest level in about three months on Friday. Last week was a short one for traders, as US equity markets were closed on Monday in honour of Martin Luther King Jr. Day.

Ian Slattery Zurich

Ian Slattery, Zurich Insurance

Italy’s Matteo Salvini suffered a stinging defeat in a key regional vote, providing a much-needed boost to Prime Minister Giuseppe Conte’s fragile government and making a snap general election less likely.

Fears deepen about the impact of the deadly coronavirus on near-term growth

In France and Germany, the largest economies in the eurozone, a positive start to the year was noted, with combined output growth at a five month high in January.

Equities

Global markets closed lower for the shortened trade week. Hong Kong fell by – 3.2% in local terms, leading losses among major markets.

Fixed Income & FX

The US 10-year yield finished at 1.62% last week. The German equivalent finished at -0.37%. The Irish 10 year bond yield finished at 0.11%. The Euro/US Dollar exchange rate remained at 1.10, whilst Euro/GBP was at 0.84.

Commodities

Oil fell back finishing the week at $53 per barrel. Gold increased to $1,583 per troy ounce and copper decreased to $5,900 per tonne.

The week ahead

Wednesday 29th January:

  • FOMC rate decision

Thursday 30th January:

  • Bank of England interest rate decision

Friday 31st January:

  •  Eurozone GDP Q4 and January inflation figures released

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