Easy come, easy go as risk trades lose ground on the day
- Japan confirms coronavirus case of person who has not been to Wuhan/China
- Hong Kong suspends personal travel permits from China amid coronavirus concerns
The headlines above are weighing on risk trades on the session as markets switch to being risk-off now. Treasury yields are hammered lower as European stocks also pare earlier gains as we start to see haven flows return.
USD/JPY is now down to session lows near 108.80 with the aussie and kiwi also brought lower even more as we go about European morning trade.
It doesn't quite matter that the mortality rate of the virus isn't as high as the SARS virus, it is the fact that countries and governments are continuing to respond to it.
And with Hong Kong being the latest to impose such travel restrictions, that is no doubt going to weigh further on the region's economy - in turn the global economy as well.
This will no doubt stoke more fears about things getting worse before they become better.
It is still early days in the development of the situation. Just remember, it took markets about ~5 months to get over the SARS virus back in 2003.
