Safe Haven Assets Continue to Boom After Wuhan Contravirus Outbreak

 

The SARS-like virus has caused Chinese officials to shut down travel from Wuhan. The city is home to 11 million people and is believed to be the source of the outbreak. The World Health Organization is closely monitoring the spread and is in communication with Chinese officials. Currently, China has confirmed 571 coronavirus cases, with seven deaths. Investors continue to flock to safe haven assets as a resolution to the outbreak remains outstanding. The Shanghai Composite Index dropped by 2.8%, which is the largest shift before the New Year holiday in three decades.

 

 

This morning the ECB announced the launching of a broad review of its monetary policy strategy. It’s the first such review conducted by the central bank since 2003 and is expected to take about a year — encompassing a wide span of challenges faced by the region, from inflation to climate change. In addition, the Governing Council voted to keep the deposit rate unchanged at -0.5% and continue their pace of monthly bond buying. While global trade tensions have eased slightly following the US-China phase one agreement, US-EU trade relations have come into the spotlight, with President Trump reinforcing his threat on auto tariffs. “They’re going to make a deal, because they have to. They have to,” Trump stated in an interview yesterday.

 

 

Day ahead. Weekly initial jobless claims came in lower than expected at 211,000 – further evidencing tightness in the labor market. Later today the EIA will provide information on petroleum inventories in the US. Opening remarks in President Trump’s impeachment trial continue. American Airlines and Southwest highlight companies reporting earnings today.