Daily thread to exchange ideas and to share your thoughts
Happy hump day, everyone! Hope you're all doing well as we get things going here in the European morning session. Markets are in a bit more of a cheery mood at the moment as investors brush aside China virus concerns, in a contrast to yesterday.
US futures are firmer while bond yields are also a bit higher, with the likes of gold and the yen weaker on the day currently. USD/JPY is back up to the 110.00 handle again but not much else is happening in the major currencies space.
Despite investors seemingly quick to move on from the pessimism observed yesterday, the real test for the new coronavirus outbreak is yet to come in my view.
The hectic travel period during the Chinese New Year holidays will prove to be the litmus test as to whether or not this may blow up into something bigger to impact the Chinese economy - especially the services sector.
If things are relatively contained despite such extensive travel and human contact, this will prove to be nothing more than a blip.
On the flip side, the worst-case scenario may see this develop into something similar or potentially more serious than the SARS virus outbreak back in 2002-03.
Given that China is a more integral part of the world economy now compared to nearly two decades ago, negative developments will reverberate more strongly across markets.
What are your views on the market right now? Share your thoughts/ideas with the ForexLive community here.
