By Deepta Bolaky
After a rocky start to the week, global stocks traded near record highs as virus fears fade.
The coronavirus remains the primary concern for markets at the moment as it continues to spread across borders. However, investors are monitoring the number of cases in the Hubei province and the rest of the world to determine the pace of the outbreak.
In what is the largest quarantine in history with more than 50 million people in lockdown, investors are being reassured by the ramping efforts from governments and the WHO to contain the global pandemic.
Amid the coronavirus fears, China injected $174 billion into the financial markets through open market repo operations to stabilize market expectations and announced its plans to halve tariffs on $75 billion worth of US goods.
Earnings have been a positive contributor in driving the stock market. Investors welcome the signs that earnings have started to pick up and more companies are revising up their profits targets.
European and the US markets recovered strongly and are poised to end the week on a positive note while Chinese stocks are bearing the brunt of the virus. As the week comes to an end, a risk-off sentiment gripped the markets in Asia.
Source: Bloomberg Terminal
The US Dollar Index which tracks the performance of the greenback against a basket of currencies traded higher for four consecutive days. As risk appetite improves across the board, safe-haven currencies like the Japanese Yen and Swiss franc emerged as the worst-performers against the US dollar.
Source: Bloomberg Terminal
The Australian dollar rose higher against the US dollar on the back of a combination of upbeat economic data and RBA’s interest rate decision and statement. However, the central bank revised the GDP lower at the Statement of Monetary Policy which tamed the upside momentum of the Aussie dollar.
It was a volatile week for the oil market. WTI and Brent Crude bottomed down to the lowest level seen in more than a year despite speculations that OPEC members might agree to deeper cuts.
Oil prices mid-week recovery was shortlived as bearish weekly oil reports show a significant build in crude oil inventories. As of writing, WTI and Brent Crude are currently trading at $51 and $55 respectively.
|Monday, 10 February 2020 |
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