|New Home Sales||Jan 27 15:00|
|FOMC's Williams Speaks||Jan 27 14:30|
Risk trades deepen their slump as market react to weekend news of the growing coronavirus outbreak, claiming at least 80 fatalities and sending the number of confirmed cases to 2744. Markets were especially hit in early Monday Asia by the revelation that the virus has an incubation of as long as 2 weeks, raising the possibility that people carrying the virus but not yet aware of the symptoms could infect others. Markets were also concerned with news reports of rocket attacks on the US embassy in Baghdad (see below). The US crude oil short opened at 59.65 on Jan 8th will be closed today. Here is the rationale for entering the trade even after a sharp drop in oil.
The coronavirus is increasingly drawing the attention of the financial markets and escalating headlines about infections are putting traders on edge. Chinese officials halted travel from Wuhan, locking down the city of 11 million people as they confront halting the spread of a new SARS-like virus that's already killed 17 and infected nearly 600 people. More below on how this compares to SARS in 2003. Aussie is the highest gainer on reduced expectations for an RBA rate cut next month after an unexpected decline in the jobless rate. Global indices are down across the board, oil extends its tumble, CAD fell sharply after the BoC issued a dovish hin, while JPY and bonds resume their ascent. The Premium trades in short oil and long cable are deepening in the green, while the EUR trades await the ECB's 500th ECB policy decision, due later today.Read More...
Here we go again; central bank meetings and more earnings from the US. US housing starts jumped 16% on Friday in a positive sign for the US consumer and a sign that low interest rates might be working too well. Trading was light on Monday largely because of the MLK holiday in the US. Gold leads all currencies, holding partly to gains after US inde futures bounce from Asia lows. The CFTC positioning data showed US dollar longs cutting back again. As speculation mounts ahead of this week's BoE and ECB monetary policy decisions, Ashraf posted the chart below, which he says is foretelling a major move in 2020.Read More...
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