Jump in new coronavirus cases derails stock rally

© Reuters. An investor sits next to a stock quotation board at a brokerage office in Beijing © Reuters. An investor sits next to a stock quotation board at a brokerage office in Beijing

By Tom Westbrook

SINGAPORE (Reuters) – Asian stock markets wobbled and the safe-havens of the Japanese yen, gold and bonds rose on Thursday as the number of new coronavirus cases at the outbreak’s epicenter jumped sharply.

China’s Hubei province, the epicenter of the virus, reported 242 new deaths and confirmed 14,840 new cases on Feb. 12, a dramatic rise from the 2,015 new cases a day earlier.

The increase came as provincial officials adopted a new methodology for counting infections although it was not immediately clear how the new methods affected the results, nor why the death toll rose so sharply.

The spike dashed hopes that the virus was slowing, knocking U.S. e-mini stock futures in to negative territory, sending the Japanese yen 0.2% higher against the dollar and pushing yields on U.S. 10-year Treasuries about 3 basis points lower ().

It also capped gains on stock boards, with MSCI’s broadest index of Asia-Pacific shares outside Japan () 0.04% weaker, despite a strong rally on Wall Street overnight.

Japan’s Nikkei () was 0.2% lower, while Australia’s ASX/S&P 200 index () retreated from a record high.

“The slowdown was the key driver of the rally in growth-exposed assets that we’ve seen over the past 24 hours…a lot of people leapt to the conclusion that we might have seen a peak,” said Michael McCarthy, chief strategist at CMC Markets in Sydney.

“The reversal of what appeared to be good news is enough to have people scrambling for the exits.”

The yen last traded at 109.91 per dollar while export-exposed currencies, which had rallied on confidence the virus could be contained, retraced rises.

The Australian dollar lost 0.2% , as did China’s yuan and the Korean won . Gold rose 0.3% to $ 1570.30 per ounce .

Overnight, World Health Organization chief Tedros Adhanom Ghebreyesus had warned the apparent slowdown in the spread of the epidemic should be viewed with “extreme caution.”

“This outbreak could still go in any direction,” he told a briefing in Geneva.

More than 1,300 people have died from the epidemic in China and the total number of cases in Hubei province now stands at 48,206.

The economy has also been upended, with factory closures hitting supply chains from car makers to tech firms.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Forex – Dollar Rally Continues as Rate-Cut Expectations Ease

© Reuters.  © Reuters.

By Yasin Ebrahim

Investing.com – The U.S. dollar continued to rack up gains against its rivals Wednesday as Federal Reserve Chairman Jerome Powell’s second day of testimony did little to support rate-cut hopes.

The , which measures the greenback against a trade-weighted basket of six major currencies, rose by 0.25% to 98.84.

In his second day of testimony on Capitol Hill, Jay Powell continued to talk up the strength of the economy and suggested there was little reason for the Fed to cut rates as the economy remained in a good place.

In the run-up to Powell’s testimony, investor hopes were running high that Powell would hint at a further stimulus in the wake of the Covid-19 outbreak. The Fed chief, however, said it was too early to determine the virus’ impact on the global economy.

About 31% of traders expect at least one cut in June, down from 35% a day earlier, according to Investing.com’s .

The dollar was held back by the pound, however, as expectations for the next U.K. budget due in March to include a boost to fiscal spending, supporting economic growth eased worries about tricky U.K.-EU negotiations slated for March.

rose 0.15% to $ 1.2955 and fell 0.33% to $ 1.0878

slipped 0.30% to C$ 1.3291 as the loonie firmed on a surge in oil prices as hopes Russia may support OPEC-led proposals to cut production further offset a larger-than-expected build in U.S. weekly crude inventories.

gained 0.24% to Y110.04 on subdued safe-haven demand as investors bet that China’s efforts to contain the coronavirus are starting to take shape following a slowdown in infections in Hubei, the province at the epicenter of the outbreak.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Pound Rally Passes Euro Milestone as Polls Back Conservatives

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The pound strengthened Monday to a fresh two-and-a-half year high against the , as weekend opinion polls continued to point to a win for the ruling Conservatives in this week’s general election.

The currency also rose against the after polls in Britain’s Sunday newspapers all putting Boris Johnson’s party in the lead. Though the gap between the parties has narrowed throughout the campaign, it is not enough to keep the Conservatives from returning to power this week. The weekend surveys spurred buying by European investors, according to traders.

“The pound is rallying again after markets all but fully discount a good Tory majority,” wrote Elsa Lignos, global head of currency strategy at Royal Bank of Canada, in a research note. “Friday will show whether that was a good strategy or not.”

As well as gaining 0.3% to 83.93 pence per euro, it also added as much as 0.3% against the dollar to $ 1.3181 Monday. The pound has strengthened 3% against the U.S. currency over the past month, as investors grow increasingly confident of a win for Johnson in the December vote. Still, the cost of hedging against a fall in the pound has also surged as the election looms, showing lingering caution following the failure of most opinion polls to accurately predict prior votes such as the 2016 Brexit referendum.

The spot rate for the pound-dollar pair continues to diverge with options, as two-week risk reversals show increased demand to hedge an unexpected outcome from Thursday’s voting. A Bloomberg survey last month found the pound would fall to $ 1.27 on a Labour-led coalition outcome, a more than 3% drop from current levels.

Positioning on the currency also remains mixed, with leveraged funds slashing short positions to the lowest since May while asset managers have turned more bearish on the currency, according to the latest data from the Commodity Futures Trading Commission.

“The scope for surprise at this week’s general election is sizeable,” wrote Goldman Sachs (NYSE:) strategists including Alain Durre in a research note. “The share of voters that are still undecided- so late in the campaign- means that even a small swing in that slice of the electorate would lead to a hung parliament.”

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Kiwi leads faint risk rally, Brexit promise lifts sterling

By Tom Westbrook

SINGAPORE (Reuters) – The dollar and export-focused currencies found support on Monday as positive signs for the U.S. economy and upbeat headlines on U.S.-China trade talks boosted investor confidence.

The pound climbed, too, on hopes for an imminent Brexit and an end to years of political paralysis.

The day’s mood – tempered with weariness at the flow of trade news – was best illustrated by the New Zealand dollar. It rose 0.4% against the safe-haven Japanese yen () to 69.83 yen.

“Even if the numbers are small, there’s a message in there that risk appetite has improved,” said Westpac FX strategist Sean Callow.

The dollar added 0.1% on the yen to 108.76 yen and touched its highest level since Nov. 14 against the euro () at $ 1.1012. It sat at 98.278 against a basket of currencies, just below a two-week high ().

Sterling rose 0.1% to $ 1.2847, after British Prime Minister Boris Johnson, whose Conservative Party leads in opinion polls ahead of the Dec. 12 election, promised to bring a deal to leave the European Union to parliament before Christmas.

“The markets are holding on to any sort of positivity we get at the moment,” said Sean MacLean, research strategist at Pepperstone, a brokerage in Melbourne. “We want to keep that momentum going.”

Keeping hopes for a breakthrough in trade talks alive was the weekend announcement of Chinese plans for improving protection of intellectual property rights – seen as a move to address a sticking point between the parties.

U.S. national security adviser Robert O’Brien also said on Saturday a deal was possible by year’s end.

On the economic front, the greenback was buttressed by better-than-expected U.S. manufacturing data on Friday, seen as staving off the need for a rate cut. The main check on confidence has been rising tensions over Hong Kong.

The city has been rocked by more than five months of anti-government protests, and Beijing has already reacted angrily to the passage of U.S. legislation backing protesters, which has cleared Congress but not been endorsed by President Donald Trump.

“The price of the ‘Hong Kong bill’ will be increased underlying U.S.-China tensions,” said Vishnu Varathan, head of economics and strategy at Mizuho Bank in Singapore, adding that means greater uncertainty around the trade deal.

Nevertheless, the day’s optimistic sentiment was enough to lift the trade-exposed Australian dollar 0.2% higher on the greenback to $ 0.6796, and for the New Zealand dollar to gain 0.3% to $ 0.6421.

China’s yuan strengthened slightly to 7.0356.

Later in the trading day focus is expected to shift to German service-sector data and a speech from the European Central Bank’s Chief Economist Philip Lane at 1800 GMT.

U.S. Federal Reserve Chairman Jerome Powell’s makes a speech at 0000 GMT.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Pound Needs More Than Election Date to Sustain October’s Rally

© Reuters.  Pound Needs More Than Election Date to Sustain October's Rally © Reuters. Pound Needs More Than Election Date to Sustain October’s Rally

(Bloomberg) — Sign up to our Brexit Bulletin, follow us @Brexit and subscribe to our podcast.

Pound traders are unlikely to find that the promise of a December U.K. election provides an escape from the Brexit maze.

The currency pared losses after the Labour Party backed government plans for an early poll, before lawmakers vote on the decision later Tuesday. An election is unlikely to send the pound plunging with the Conservatives ahead in the polls, strategists say, yet there is enough uncertainty around the result and the Brexit outcome that it also won’t prompt a huge rally.

“The most severe of the longer-term structural risks facing the U.K. — a no-deal crash out — have all but evaporated,” said Ned Rumpeltin, European head of currency strategy at Toronto-Dominion Bank. “There is a lot of good news in the price, and the balance of headlines may not be as constructive once we head into an election cycle.”

The pound is headed for its best month against the dollar since January 2018, with no-deal Brexit risk reduced after lawmakers voted to force Prime Minister Boris Johnson to seek an extension to the deadline. The likely election now looks set to become a proxy vote on European Union membership.

The rose 0.1% to $ 1.2878 on Tuesday, and climbed 0.2% to 86.16 pence per . The yield on government bonds held steady at 0.72%.

Wary Investors

Even as polls suggest a Tory-led government is the most likely outcome, the market will be mindful of risks around Jeremy Corbyn. Investors have long been wary of a government led by the left-wing Labour leader, who is seen nationalizing parts of the economy, boosting borrowing and redistributing income.

There is also the question of how the two main parties position themselves on Brexit. If Labour opts to campaign on a platform of no Brexit or an arrangement where Britain maintains close ties with the EU, while the Conservatives go for a departure at any cost, volatility will likely pick up into the vote, according to Thu Lan Nguyen, a currency strategist at Commerzbank AG (DE:).

“I wouldn’t expect a large market reaction in pound spot rates,” said Nguyen. “Rather, I think we will see a repricing on options markets, factoring in an increased political risk around the date of the elections.”

Option pricing has been subdued in recent days, with implied volatility in the pound staying low in the shorter and longer term. This suggests traders foresee smaller jumps in the currency, reflecting optimism about the fading risk of no-deal, contained by pessimism caused by simmering political uncertainty.

Persistent question marks over Brexit itself could also keep a lid on the pound. Traders may also shift their attention to the risk of the second phase of Brexit negotiations when Britain will have to decide its future relationship with the EU.

“The capacity for sterling to enjoy a major relief rally that ‘it’s over’ may be more constrained than others may think because, let’s face it, it’s not over,” said Toronto-Dominion’s Rumpeltin. “Not by a long shot.”

(Adds options context, comments from Commerzbank, updates pricing.)

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Turkish Markets Rally as Erdogan Clinches Syria Deal With U.S.

© Reuters.  Turkish Markets Rally as Erdogan Clinches Syria Deal With U.S. © Reuters. Turkish Markets Rally as Erdogan Clinches Syria Deal With U.S.

(Bloomberg) — The jumped to its strongest level in almost two weeks while bonds and stocks rallied after the U.S. agreed not to impose any further sanctions on Turkey as part of a temporary cease-fire deal in Syria struck between Ankara and Washington on Thursday.

The currency gained as much as 1.3% to 5.7585 per dollar, erasing losses that were fueled in recent days by concern Washington would impose punitive measures against the Turkish economy in response to the offensive against Kurdish rebels in Syria.

The benchmark stock gauge jumped almost 4% at the open, its biggest advance since June. The yield on five-year benchmark bonds dropped more than 160 basis points, falling below 15% for the first time in a week.

“The truce deal, even a temporary one, fueled optimism among investors that the risk of sanctions has diminished significantly,” said Can Oksun, senior manager of institutional sales at Global Securities in Istanbul. “The mood is broadly more positive.”

The agreement enshrines Turkish control of a 20-mile deep “safe zone” in northern Syria, representing a victory for President Recep Tayyip Erdogan, who had been seeking one for years. The U.S. has also promised to withdraw sanctions announced earlier this week once a permanent cease-fire takes effect.

‘Brutal’ House Bill

Still, risks remain. Republican and Democratic lawmakers have vowed to move ahead with sanctions despite Thursday’s announcement. The measures would penalize Turkish leaders, financial institutions and its energy sector, as well as prohibit any U.S. firms or individuals from buying the country’s sovereign debt.

“If this bill holds as is and is passed it would be brutal,” said Timothy Ash, a strategist at BlueBay Asset Management in London. “Sanctioning sovereign debt would be lights out for Turkey, given it has $ 180 billion in short-term external debt to finance every year.”

While there is strong bipartisan opposition to Turkey’s incursion into northern Syria, Senate leaders haven’t committed to bringing a sanctions bill to a vote.

The lira was trading 0.9% stronger at 5.7803 per dollar as of 10:53 a.m. in Istanbul. The Borsa Istanbul 100 Index trimmed its advance to 3.5%, with gains being led by Turkiye Garanti Bankasi AS and Akbank TAS, the nation’s largest listed lenders.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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US President Trump addressing a rally says China wants to talk

HIGH RISK WARNING: Foreign exchange trading carries a high level of risk that may not be suitable for all investors. Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance. You could lose some or all of your initial investment; do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions.

ADVISORY WARNING: FOREXLIVE™ provides references and links to selected blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the blogs or other sources of information. Clients and prospects are advised to carefully consider the opinions and analysis offered in the blogs or other information sources in the context of the client or prospect’s individual analysis and decision making. None of the blogs or other sources of information is to be considered as constituting a track record. Past performance is no guarantee of future results and FOREXLIVE™ specifically advises clients and prospects to carefully review all claims and representations made by advisors, bloggers, money managers and system vendors before investing any funds or opening an account with any Forex dealer. Any news, opinions, research, data, or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. FOREXLIVE™ expressly disclaims any liability for any lost principal or profits without limitation which may arise directly or indirectly from the use of or reliance on such information. As with all such advisory services, past results are never a guarantee of future results.

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US dollar rally halted after Richmond Fed

US dollar still near the highs of the day

The march higher in the US dollar today stalled after a surprise drop in the Richmond Fed. The index sank to -12 from +2. It’s the worst reading since 2013 and was coupled with significant declines in nearly all the underlying indexes.

What’s so puzzling about it is that other regional manufacturing numbers have rebounded. The Philly Fed posted its largest one-month rise on record this month.

The dollar had been rallying ahead of the data but it’s stalled out now. However EUR/USD remains near the session low of 1.1151 and the dollar is less than a dozen pips away from the peak right across the board.

The move in USD/JPY is a bit more pronounced but it’s all within a narrow range.

US dollar still near the highs of the day

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Italian Bond Rally Hits a Hurdle as Election Uncertainty Grows

(Bloomberg) — This week’s rally in Italian bonds has come to a halt on uncertainty over whether the country is heading for an election.

Benchmark 10-year yields jumped Friday, after falling to a three-year low Thursday, on a report that Deputy Prime Minister Matteo Salvini hadn’t decided whether to hold a snap election. The securities are still on their longest-winning weekly streak in five years as investors bet on monetary policy easing by the European Central Bank.

Salvini is seen as Italy’s most powerful politician following his League party’s strong performance in May’s European vote. President Sergio Mattarella wants him to make his intentions on an election clear in the next 48 hours, so that any new government can be in place by October to deal with the 2020 budget and deficit talks with the European Commission, according to an official.

“The uncertainty of a general election tends to make investors cautious, hence this knee-jerk BTP selling and spread widening,” said Peter Chatwell, head of European rates strategy at Mizuho International Plc.

The yield on Italy’s 10-year bonds rose five basis points to 1.60%, widening the premium over its German peers by six basis points to 193 basis points. Yields have fallen for seven weeks, the longest streak since 2014.

Italian and Greek bonds have been leading the rally across Europe in the past month after ECB President Mario Draghi flagged possible further stimulus. The ECB meets to discuss policy next week. That means there are now plenty of “willing profit takers” after the run of gains, said Charles Diebel, head of fixed income at Mediolanum S.p.A.

“Many investors recently increased their exposure to peripheral European government bonds on the back of the prospect of ECB easing, expected to be delivered by September,“ said Martin van Vliet, a rates strategist at Robeco. “This bout of uncertainty affects conviction.”

(Adds comment by Martin Van Vliet in the seventh paragraph.)

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Video: What to watch for in the non-farm payrolls report and why CAD could rally

HIGH RISK WARNING: Foreign exchange trading carries a high level of risk that may not be suitable for all investors. Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance. You could lose some or all of your initial investment; do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions.

ADVISORY WARNING: FOREXLIVE™ provides references and links to selected blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the blogs or other sources of information. Clients and prospects are advised to carefully consider the opinions and analysis offered in the blogs or other information sources in the context of the client or prospect’s individual analysis and decision making. None of the blogs or other sources of information is to be considered as constituting a track record. Past performance is no guarantee of future results and FOREXLIVE™ specifically advises clients and prospects to carefully review all claims and representations made by advisors, bloggers, money managers and system vendors before investing any funds or opening an account with any Forex dealer. Any news, opinions, research, data, or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. FOREXLIVE™ expressly disclaims any liability for any lost principal or profits without limitation which may arise directly or indirectly from the use of or reliance on such information. As with all such advisory services, past results are never a guarantee of future results.

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