Coronavirus outbreak continues to remain at center stage this week

Coronavirus outbreak continues to remain at center stage this week

The coronavirus outbreak is expected to remain the main driver in the market this week. Sentiments are expected to remain sensitive to any virus-related news, with not much on the economic calendar to enthuse markets.

The last week began with disappointing news, US tech giant, Apple Inc, issued a rare profit warning on Monday, saying it will miss its first quarter revenue guidance as the coronavirus outbreak affects both production and demand in China. And as results, Wall Street indicators fell sharply. And then risk appetite recovered at the middle of the week motivated by the fell in numbers of new confirmed cases of coronavirus in China. The week ended on a more anxious note, as traders greeted the big fall in the number of new confirmed virus cases in China with extreme caution after authorities once again revised their counting methodology, raising suspicion about the reliability of the figures.

Besides coronavirus updates, there are some important indicators worth keeping an eye on. From the US, Durable goods orders for January and the second estimate of GDP for Q4 are due to release in Thursday, and the core PCE price index for the same month on Friday. However, Dollar continued to be king lately and the US dollar index came within touching distance of 100 on Thursday, and is expected to remain so since the US has a smaller exposure to China in terms of exports compared to other economies, and investors are insulating their portfolios from the virus fallout and cutting their exposure to economies that will be hardest hit from a severe slowdown in China. And so, this week’s figures cannot do much to draw end to the king Dollar.

From the Euro area major data due for release are, Germany’s Ifo business survey for February on Monday and preliminary inflation numbers for that month on Friday.

In brief, expected economic highlights include:

Monday

– German Ifo Business Climate Index (Feb) (09:00 GMT)

Tuesday

– German GDP (QoQ) (Q4) (07:00 GMT)

– US CB Consumer Confidence (Feb) (15:00 GMT)

Wednesday

– ECB President Lagarde Speaks (13:30 GMT)

– US New Home Sales (Jan) (15:00 GMT)

– Crude Oil Inventories (15:30 GMT)

Thursday

– US Core Durable Goods Orders (MoM) (Jan) (13:30 GMT)

– US GDP (QoQ) (Q4) (13:30 GMT)

– US Pending Home Sales (MoM) (Jan) (15:00 GMT)

Friday

– German Unemployment Change (Feb) (08:55 GMT)

– Canada GDP (MoM) (Dec) (13:30 GMT)

– US Core PCE Price Index (MoM) (Jan) (13:30 GMT)