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Corona virus weighs heavily across the board

Published January 28, 2020

By Rhys Miles

The Carona virus appears to be the sole driver of the markets at the moment. Originating in the now sealed off city of Wuhan and by all accounts finding its source through the ingestion of wild and endangered exotic animals, the virus has created quite a shock right across the financial markets with equities off aggressively and the Australian dollar in all sorts of trouble.

The AUD has fallen 4% since the high of the year of just over 0.7000 just over three weeks ago with activity in the last 24 hours having it the worst performing currency in the G10. The S & P 500 has had its biggest fall in four months with the Dow and European equities also off heavily. This week sees a very heavy US earnings reporting schedule and some good news is desperately needed after the virus inspired falls.  The ASX futures are reporting a 1.20% fall locally today.

With a risk off mentality pervading a market that has clear memories of the impact the SARS virus had a few years ago, the safe haven go to of government bonds at the expense of equities are the current default position with US 10 year treasuries dropping to 1.60%.

Both the US Fed and Bank of England meet this week with interest rate decisions announced. Locally, our CPI is out tomorrow with the AUD looking for any support whatsoever.

Oil and commodities generally have been sold off with the safe haven status of gold keeping it well supported.

 

 

 

 

 

Adam Nikitins and Stewart McCallum were appointed Joint and Several Voluntary Administrators of EncoreFX (Australia) Pty Ltd on 30 March 2020.

Rees Logan, Adam Nikitins and Stewart McCallum were appointed Joint and Several Voluntary Administrators of EncoreFX (NZ) Limited on 30 March 2020.

Any queries regarding the Administrations should be directed to encorefx@au.ey.com.