• Risk-off remains as coronavirus concerns continue to weigh
• China’s National Health Commission confirmed 2744 cases of coronavirus and death toll at 80 as of the end of January 26th
• China extended the Lunar New Year holiday to February 2nd to contain the coronavirus; unclear if market closures will follow suit
• Italy’s Centre-Left bloc defeated Salvini’s league in Emilia-Romagna, with BTP’s substantially outperforming as such
• FX space is mixed vs. a modestly firmer USD, with safe havens...

• China has stated that the number of people infected with Coronavirus has risen to 2744 with the death toll at 80
• China warned that the coronavirus is getting stronger and the number of cases could increase
• This heavily pressured US equity futures which slipped around 1% in early trade and spurred safe-haven bids for T-notes and gold
• Italy's Centre-Left bloc, led by the Democratic Party are set to defeat Matteo Salvini’s League in the Emilia...

• European bourses are firmer this morning, as sentiment improved overnight as the WHO did not declare an international emergency
• UK Flash PMIs beat expectations, though GBP has slipped post-release; January BoE cut expectations are back to near 50/50
• OPEC+ have reportedly discussed an output cut extension until the end of 2020
• US President Trump will sign the USMCA trade deal at the White House on January 29th
• Looking ahead, highlights include US Flash...

• Asian equity markets traded cautiously but eventually posted mild gains; Mainland China was shut due to Lunar New Year holiday  
• Total number of confirmed coronavirus cases in China was at 830 with the death toll at 25 according to state media  
• World Health Organization did not declare the coronavirus as a Public Health Emergency of International Concern, but the panel was split 50/50 on the decision  
• In FX, DXY traded...

• European bourses are flat/mixed at present, as focus switches to today’s ECB meeting
• French Finance Minister Le Maire says they have reached an agreement with the US regarding the basis for digital tax discussions at next week's OECD
• US is preparing for a longer and more wide-spread campaign to exclude Huawei from 5G cellular networks globally
• Norges Bank left rates unchanged at 1.5% as expected, with AUD outperforming a firmer USD post-AUS...

• Asian equity markets weakened following the indecisive performance on Wall St where stocks finished relatively flat after a pullback from record highs
• China confirmed 571 total cases of the new coronavirus, the number of deaths from the virus was reported at 17
• The EU withdrawal agreement bill concluded its parliamentary stages and has been sent to the Queen, as expected
• Calls for an RBA rate cut next month have been pared back after the latest jobs report showed a firmer than expected employment...

• European bourses are firmer, but off of session highs, as focus turns to Davos programming
• Coronavirus cases have risen to 440 with the death toll now at 9; US President Trump stated the US case is under control
• EU is reportedly preparing to offer the UK a trade deal on tougher terms than its deals with other leading trade partners
• Sterling outperforms on firmer CBI data for January while G10 peers are mostly little changed vs. USD
• Looking ahead, highlights include Canadian CPI, US Existing...

• Asian equity markets gradually improved and shrugged off the lacklustre lead from Wall St, Mainland China underperformed  
• Coronavirus cases have risen to 440 with the death toll now at 9; US Center for Disease Control and Prevention confirmed the first case in the US  
• EU is reportedly preparing to offer the UK a trade deal on tougher terms than its deals with other leading trade partners  
• In FX, DXY traded slightly firmer,...

• European bourses are subdued this morning, in a continuation of APAC trade
• 291 cases of Coronavirus have now been confirmed by China (as of Jan 20th), according to State media
• US Treasury Secretary Mnuchin says, with the Phase One China deal in place the Phase Two deal would not necessarily lead to the removal of all tariffs; could be done sequentially along the way, WSJ
• UK labour market data was firmer than expected, though expectations for a January BoE remain around 60%
• BoJ kept rates and...

• Asian equity markets weakened across the board following a non-existent handover from their peers on Wall St
• China confirmed 224 coronavirus cases so far and a 4th death from the outbreak. WHO called an emergency meeting amid the spread to more cities
• BoJ kept monetary policy settings unchanged as expected with NIRP maintained at -0.1% and 10yr JGB yield target at around 0%, while reaffirming forward guidance
• US President Trump spoke with French President Macron in which they agreed to pursue talks...

MON: PBoC Loan Prime Rate Setting, Japanese Industrial Output, German PPI, Indonesian Central Bank Monetary Policy Decision, Huawei CFO Extradition Hearing begins, Eurogroup Meeting, Martin Luther King Day

TUE: World Economic Forum in Davos Begins (21st-24th January), BoJ Monetary Policy Decision, UK Labour Market Report, German ZEW, Eurozone Economic Sentiment, Canadian Manufacturing Sales

WED: BoC Monetary Policy Decision, Canadian CPI, South African CPI, Japanese...

• Most major Asia-Pac indices began the week higher as the global rally just about remained intact following another record finish last Friday on Wall St
• PBoC kept the Loan Prime Rate unchanged at 4.15% vs. forecasts for a 5bps cut
• UK Chancellor Javid urged UK companies forget about being closely aligned to the EU post-Brexit and adjust to the new reality
• Crude markets supported by supply disruptions in Libya after Libya's National Oil Corp. declared a force majeure
• Looking ahead, highlights...

• European bourses are firmer this morning, continuing the positive tone from APAC hours
• Sterling lags and Gilts lead core debt peers after dismal UK retail sales
• White House officials confirmed they are planning election year stimulus which will focus on tax reductions
• Chinese GDP printed in-line with exp. with IP and retail sales topping estimates
• Looking ahead, highlights include US Building Permits, Housing Starts, Industrial Production, JOLTS, Uni. Of Michigan, Baker Hughes, Fed’s Harker,...

• Asian equity markets traded mostly positive after taking impetus from another record-setting session on Wall St.
• Chinese GDP printed in-line with expectations, whilst both Industrial Production and Retail Sales topped estimates
• China’s Global Times noted comments from an expert who suggested that China could demand that the US roll back all tariffs prior to phase two talks
• DXY was relatively flat and held near the prior day’s highs, while its major counterparts were indecisive
• Looking ahead,...

• European equities are little changed at present, as newsflow has slowed since the Phase One signing
• Chinese VP Liu He says it is unwise to rush into the Phase Two negotiations, stating Beijing has little interest in immediately doing so
• US Senate Majority Leader McConnell said the impeachment trial will begin on Tuesday and the Senate will complete USMCA trade deal today
• USD is slightly softer as antipodeans benefit on the trade deal, other G10 currencies little changed/mixed at...

• Asian equity markets traded mostly higher but with gains capped as the euphoria from the US-China Phase 1 trade deal signing dissipated
• The deal was caveated by China’s commitment to purchase agricultural goods “based on market conditions” and potential for China to exit the deal
• President Trump said he will visit China in the not too distant future to reciprocate for the Phase 1 signing. Work on Phase 2 will begin as soon as this one kicks...

• European bourses are mixed-flat in tentative trade ahead of the US-China Phase One Signing
• US Treasury Secretary Mnuchin stated that tariffs will stay in place until there is a Phase 2 agreement with China
• Soft UK CPI and comments from BoE’s Saunders have seen market pricing for a January cut increase to 60%
• Russian Energy Minister Novak states there are no plans to delay the March OPEC+ meeting
• FX complex is similarly tentative while gilts are driving upside in debt
• Looking ahead,...

• Asian equity markets followed suit to the cautious performance on Wall St amid trade-related headwinds
• Tariffs on China will remain until after the US election despite a Phase 1 deal, according to sources
• US Treasury Secretary Mnuchin stated that tariffs will stay in place until there is a Phase 2 agreement with China
• OPEC+ is mulling the delay of its March meeting to June and could extend output cuts until then if so, according to reports citing sources
• Looking ahead, highlights include...

• European bourses are relatively unchanged in choppy trade on quiet newsflow in European hours
• US Treasury removed China from the currency manipulator list, said China made enforceable commitments to refrain from competitive devaluation in the Phase 1 deal
• US-China Phase 1 deal will include pledge by China to buy USD 200bln of US goods over a 2-year period
• Chinese trade date showed a sizable increase in the trade balance, albeit this did miss (USD-denominated) expectations
• USD is firmer but...

• European equities are mixed, but overall little changed, this morning; aside from the FTSE 100 on currency effects
• US Treasury Secretary Mnuchin stated that China’s commitments in Phase 1 deal were not changed during the lengthy translation process
• BoE’s Vlieghe becomes the latest MPC member to come out in support of a potential rate cut if data does not improve; subsequently, UK GDP Estimate (Nov) printed below expectations
• As such, GBP is...

• Asian equity markets began the week somewhat mixed with the region indecisive ahead of the US-China Phase 1 deal signing
• US Treasury Secretary Mnuchin stated that China’s commitments in Phase 1 deal were not changed during the lengthy translation process
• BoE’s Vlieghe becomes the latest MPC member to come out in support of a potential rate cut if data does not improve
• Iran admitted that it accidentally shot down the Ukraine passenger jet in which it alleged that the airliner took the flying posture...

• European bourses are little changed, as newsflow slows with NFP ahead
• US President Trump said he thinks the US-China Phase One deal will be signed on January 15th or shortly after
• China Global Times tweeted that a Phase Two trade deal after November is too far away
• USD is firmer this morning, with GBP briefly dented by comments from BoE’s Tenreyro
• Looking ahead, highlights include US & Canadian Jobs Reports

GEOPOLITICS

Israeli Air Force jets...

10th January 2020

·       Rockets reportedly landed near the Balad military base north of Baghdad, which houses US troops, according to Iraqi police

·       US government officials are now confident the Ukrainian Boeing 737-800 was shot down by an Iranian missile, citing satellite data

·       US President Trump said he might want to wait till after the election to complete Phase...

• European bourses are firmer, as markets return to risk-on following the Middle-East de-escalation
• Senior Iranian Revolutionary Guard Commander states that Iran will take 'harsher revenge soon' following on from the missile attacks on US targets in Iraq., Tasnim
• China and the US will sign the Phase One deal, which will occur on January 15th at 16:30GMT., Chinese Press
• USD is outperforming G10 counterparts today, particularly GBP post-Carney
• Looking ahead, highlights include Jobless Claims,...

·       US President Trump confirmed no Americans or Iraqi lives were lost by the Iranian strike and added that Iran appears to be standing down

·       Two rockets reportedly hit Baghdad’s Green Zone near the US Embassy in Iraq with no casualties reported, according to Iraq military

·       Asia-Pac bourses traded with firm gains across the board after a positive handover from Wall...