Despite Chinese markets being closed for the largest part of the week, investors are likely to keep their gaze locked on headlines surrounding the coronavirus. We also have two central banks deciding on interest rates this week: The FOMC and the BoE. While the Fed is widely expected to refrain from acting, there is a 50% chance that the BoE will hit the cut button at this meeting. On Friday, the UK officially exits the EU, but market participants have already turned their eyes to the transition period and whether the two sides can eventually strike a trade deal by the end of the year.
On Monday, markets have been closed in Australia in celebration of the Australia Day, while Chinese markets will stay closed until Thursday, due to the Lunar New Year holiday, which started on Friday. Despite Chinese markets being closed, investors around the globe will stay on the edge of their seats, reading news and headlines surrounding the coronavirus, the outbreak of which started in China and is now spreading around the globe. More than 2000 people worldwide have been infected, while 56 in China were killed, with China’s National Health Commission ringing alarm bells that the virus’s transmission ability is getting stronger. With millions of Chinese traveling home and abroad for the holidays, fears over further spreading may keep investors in a risk-averse mood, thereby reducing their risk exposures and seeking shelter in safe havens.
During the European day, we get the German Ifo survey for January. Both the...
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