MARKET WRAP
27 Jan 2020 Market Wrap
As of Tue 28 Jan, Singapore Time zone UTC+8
FX MOVES
U.S. Dollar Index, +0.08%, 97.94 (Sentiment: Neutral)
USDJPY, +0.12%, $108.93 (Sentiment: Neutral)
EURUSD, -0.05%, $1.1019 (Sentiment: Neutral)
GBPUSD, -0.01%, $1.3060 (Sentiment: Neutral)
USDCAD, +0.20%, $1.3188 (Sentiment: Higher)
AUDUSD, -0.58%, $0.6762 (Sentiment: Neutral)
NZDUSD, -0.44%, $0.6545 (Sentiment: Neutral)
MARKET MOVES
S&P500, -1.57%, 3,243.63 (Sentiment: Neutral)
Nasdaq, -1.89%, 9,139.31 (Sentiment: Neutral)
Nikkei Futures, -2.87%, 23,117.5 (Sentiment: Neutral)
MARKET OUTLOOK: The narrative surrounding the state of the Coronavirus epidemic has been the key driver of risk appetite. Should more Chinese cities go into lockdown and the contagion effect of the virus spreads, markets will be pricing in the economic impact of reduced trade and the impact on Global GDP.
SUMMARY OF NOTABLE EVENTS
DEATHS CLIMB ABOVE 80 AS CHINA RECORDS NEW CASES OF CORONAVIRUS
Stocks tumbled and oil prices fell on Monday as the virus spread worried investors around the globe. The S&P 500 fell 1.57%, with shares of airlines and companies dependent on tourism from China particularly hard hit. It was the sharpest decline since Oct. 2, when the trade war was fanning fears of a slowdown. American Airlines dropped more than 4% in early U.S. trading, and Wynn Resorts, which operates casinos in Macau, a special administrative region of China and a gambling haven for Chinese high rollers, dropped more than 7%. The price of Oil dropped, on fears that demand could slip. Renminbi and currencies of China’s associated trading partners like the Aussie & Kiwi Dollar fell alongside it, while investors moved into safe havens like gold.
GERMAN IFO BUSINESS CLIMATE INDEX DISAPPOINTS
German business morale deteriorated unexpectedly in January as the outlook for services darkened, a survey showed on Monday, suggesting that Europe’s largest economy got off to a slow start in 2020 after narrowly avoiding a recession last year. The headline German IFO Business Climate Index came in at 95.9 in January, weaker than last month’s 96.3 and missing the consensus estimates pointing to a reading of 97.0. The lackluster print knocked Euro off to a session low of 1.1017. The spot remains vulnerable, as the safe-haven appeal of the US Dollar remains underpinned amid growing concerns over the China coronavirus outbreak.
U.S. MARKETS
All 11 S&P 500 sectors finished in negative territory. The energy (-2.8%) and information technology (-2.4%) sectors were hit the hardest, while the defensive-oriented consumer staples (-0.3%) and utilities (-0.3%) sectors posted modest losses. Energy stocks were undercut by another 2.2% drop in WTI crude ($53.01/bbl, -1.20).