DAY AHEAD
As of Fri 31 Jan, Singapore Time zone UTC+8
Markets will continue to be affected by coronavirus development, Asian Risk Assets along with its associated trade partners like Australia, New Zealand, and Emerging Markets will be sensitive to any potential economic impact.
FX MOVES
U.S. Dollar Index, -0.20%, 97.86 (Sentiment: Negative)
USDJPY, -0.10%, $108.89 (Sentiment: Neutral)
EURUSD, +0.16%, $1.1028 (Sentiment: Neutral)
GBPUSD, +0.50%, $1.3086 (Sentiment: Neutral)
USDCAD, +0.08%, $1.3209 (Sentiment: Positive)
AUDUSD, +0.25%, $0.6722 (Sentiment: Neutral)
NZDUSD, -0.66%, $0.6484 (Sentiment: Neutral)
MARKET MOVES
S&P500, +0.31%, 3,283.66 (Sentiment: Positive)
Nasdaq, +0.26%, 9,298.93 (Sentiment: Positive)
Nikkei Futures, -0.99%, 23,128.0 (Sentiment: Positive)
WHAT HAPPENED YESTERDAY
STERLING GAINS AFTER BoE LEAVES INTEREST RATES UNCHANGED
Sterling gained on Thursday after the Bank of England held interest rates at 0.75%, defying money markets that had seen a 50% probability of a cut to help the economy. Britain’s economy struggled at the end of 2019, prompting several policymakers to say this month they would vote for a rate cut unless data improved. Carney said earlier this month a case could be made for a precautionary cut. But economic momentum has shown signs of picking up since December’s general election, the BOE said, adding that signs of global stabilization also meant stimulus was not needed yet. The Monetary Policy Committee remained split 7-2 as before, with external members Michael Saunders and Jonathan Haskel again voting to lower rates.
IMPACT: Following the move, interest rate futures moved to almost price out a rate cut at the March meeting as well, reinforcing Sterling’s gains. Money markets are still pricing in a quarter-point reduction by September, however.
AMAZON’S ONE DAY SHIPPING PAYS OFF
Amazon.com Inc on Thursday posted holiday quarter results well above expectations as the expansion of its one-day shipping program came under budget and membership in its Prime loyalty club notched a 50% rise in two years. Amazon also forecasts operating income of up to $4.2 billion in the current quarter, down from $4.4 billion the year prior. Still, that appeared to assuage investor concerns about Amazon’s continued spending on fast delivery, which could have erased windfalls from e-commerce, advertising, and cloud computing sales.
IMPACT: Shares soared as much as 13% in after-hours trade, putting the online retailer back in the $1 trillion market capitalization club. If the share gain holds on Friday, it will be the biggest daily jump for Amazon since October 2017.
CHINA VIRUS DEATHS RISES, WHO DECLARES GLOBAL EMERGENCY
The death toll in Hubei, the Chinese province at the center of the epidemic, had risen to 204 and there were 9,692 cases of infection nationally as of Thursday, Chinese health authorities said. About 100 cases have been reported in at least 18 other countries, with no deaths outside China.
IMPACT: Foreign governments have been flying home their citizens from Hubei and holding them in quarantine, while airlines including Air France, American Airlines and British Airways have stopped flying to mainland China. Airline and Gambling Stocks will bear the brunt of the damage as Chinese travelers which constitutes a large segment will be missing. The outbreak poses the biggest epidemic threat to the airline industry since the 2003 SARS crisis, which led to a 45% plunge in passenger demand in Asia at its peak in April of that year, analysts said.