Via Bloomberg.
My view regarding the coronavirus is that we will see a bottom in safe haven prices/reactions for now. I outlined my position yesterday. However, having said that, no-one can predict the future. From the reading that I have done my view is that the coronavirus is contagious, but not as deadly as SARS. Yes, there are models of 'possible' outcomes. However, these statistical models are different to each other, vary widely in the outcome and are prone to caveats (it seems, possibly, assumes etc). So, getting a feel from it all tells me this, people fear it could be very bad, but at the moment it isn't as bad as feared.
Now, as I write that sentence I feel a strange sense of detachment analysing people's deaths to a killer virus in order to profit. It's right and proper to do, of course and needs to be done to responsibly manage finances etc, but it's not very human. The fact is that most people aren't aware of these decisions going on in their investments. So, none of this is meant to be dismissive of the sad human toll already felt by so many across China and beyond. It is one of the sad factors of life that even death has its own economics .The baptist minister part of me wants to respond as well as the currency trader. So, you are, like me, torn. Such is the way of this world.
USDCNH
I came across this article of interest this am on Market's Live Blog from Mark Cranfield. I often find myself valuing an article on the blog and find his name at the bottom. He highlighted the USDCNH pair:
- Recent USDCNH failed to take it above the 7.00 handle
- 50SMA falling below 200SMA for a Golden Cross
- The Chinese authorities are able to support a slowing economy
It is not a surprise that I like this call, as I am thinking the market has over-reacted to the coronavirus. Here is the chart below :
Stops above 7.000 make sense to me here on a USDCNH short expecting the Yuan to strengthen
