Daily Market Color January 31, 2020Rates Rally as WHO Decalres Virus a Global Health Emergency Rates continue to churn as WHO declares global emergency with Wuhan coronavirus. Fears around the virus continue to dominate the narrative in markets, overshadowing the Fed and the Senate’s impeachment proceedings. Global cases have now climbed to 9,658 (exceeding the number of SARS cases) with 213 confirmed deaths. Economists now estimate the virus outbreak will reduce Q1 GDP figures by 0.40% (on an annualized basis) – a figure that could grow as the contagion spreads. Treasurys rallied to start the day yesterday in response to those fears, yields and swap rates falling as much as 6 basis points before abruptly reversing the course and ending the day unchanged. This morning rates are lower once more, the 10-year Treasury yield falling to 1.55%. Impeachment acquittal appears within reach as trial moves forward without witnesses. The impeachment trial of President Trump is set to move forward without witness testimony after a key senator said he would oppose a motion that would have called witnesses like John Bolton. A simple majority in the Senate is all that would have been required to call witnesses to the trial (conviction requiring a larger 2/3rds majority), but Democrats look like they will fall short of the necessary majority by one vote. PredictIt now has the probability of acquittal at 95%. Day ahead. This morning, Personal Income and Outlays data was released. Inflation has remained below the Fed’s target despite low unemployment numbers. Income rose 0.2% and spending pose 0.3%, which was slightly lower than expectations. Chicago PMI and consumer sentiment numbers will be released later this morning.