CORONAVIRUS UPDATE
Total confirmed cases: More than 95,488
Total deaths: At least 3,286
The coronavirus COVID-19 is affecting 84 countries and territories around the world and 1 international conveyance (the Diamond Princess cruise ship harbored in Yokohama, Japan).
· China coronavirus infections spike in central city of Wuhan
Mainland China reported a rise in new confirmed cases of coronavirus on Thursday, reversing three straight days of declines, because of a spike in new infections in Wuhan, the city at the center of the outbreak.
Mainland China had 139 new confirmed cases as of Wednesday, the National Health Commission (NHC) said, bringing the total accumulated number of cases to 80,409. Authorities reported 119 new cases the previous day and 125 the day before that.
Wuhan’s new infections climbed to 131 from 114 a day earlier. There was no immediate elaboration and health officials were due to hold a briefing later in the day.
· South Korea declared a “special care zone” on Thursday around a second city hit hard by the coronavirus and the U.S. military confirmed two new cases among relatives of its troops in the country, which is battling the biggest epidemic outside China.
The South Korean government declared a “special care zone” around Gyeongsan, a city of about 275,000 people 250 kms (150 miles) southeast of Seoul, promising extra resources such as face masks and warning people from traveling there.
· Italy closed all schools and universities and took other emergency measures on Wednesday to try to slow the spread of the coronavirus in Europe’s worst-hit country as the death toll and number of cases jumped.
The total number of dead in Italy rose to 107 after 28 people died of the highly contagious virus over the past 24 hours, the Civil Protection Agency said.
Italy’s government is likely to increase to 5 billion euros ($5.57 billion) the value of measures to help the economy withstand the largest outbreak of coronavirus in Europe, Deputy Economy Minister Laura Castelli said on Thursday.
· Japan plans to adopt a mandatory quarantine term of two weeks for all visitors from neighbors China and South Korea, the Yomiuri newspaper said, in a battle to rein in the spread of a coronavirus.
Japan plans to halt visas already issued for visitors from both countries, the paper said, adding that Prime Minister Shinzo Abe is expected to discuss such steps at a meeting on virus response measures on Thursday evening.
Earlier, Olympics minister Seiko Hashimoto signaled the Summer Games would go ahead as planned from July, even as the outbreak spread to new regions.
· Thailand reports four new coronavirus cases, total 47
Thailand reports four new coronavirus cases, bringing its total to 47 since January, Suwanchai Wattanayingcharoen, director-general of the Department of Disease Control said in a news conference on Thursday.
Thailand has recorded one coronavirus fatality, 31 patients have recovered and returned home, while 15 are still being treated in hospitals.
· The dollar struggled to make headway on Thursday, as very low U.S. yields and the prospect of even more monetary easing held back gains, while virus fears supported the safe-haven yen.
Strong data showing U.S. services activity at a one-year high and hiring growth had pushed the greenback 0.3% higher on the euro overnight.
But with benchmark U.S. 10-year yields just a tad above 1% and futures markets pricing another 50 basis points of Federal Reserve cuts by July <0#FF:>, the greenback failed to forge ahead in Asia, leaving the euro steady at $1.1136.
The strong performance of former Vice President Joe Biden in the Democratic nomination campaign had pulled the dollar firmer than that overnight, with an increase in risk appetite drawing investors away from the safety of the Japanese currency.
Biden is considered less likely to raise taxes and impose new regulations on business than rival Bernie Sanders.
· But deep concern about the widening economic fallout from the coronavirus outbreak had the yen rising 0.2% through Thursday and last trading at 107.33 per dollar.
The British pound held overnight gains after the incoming Bank of England governor said he would wait for more clarity about the virus before moving interest rates, rather than rushing to an emergency cut.
The pound last bought $1.2873 and traded at 86.51 pence per euro.
· FOMC to make three 0.25% cuts by June - Westpac
Bill Evans & Elliot Clarke, Analysts at Westpac, have revised their forecast for the US FOMC, with 0.25% rate cuts in March, April, and June.
Key quotes:
“Readers will be aware that Westpac has forecast three cuts in the federal funds rate in 2020 since the middle of 2019.
That was based on a likely slowdown in the US economy to below trend (to 1.5%) in 2020 particularly as consumer spending slowed from a 3% pace in 2019 to near 2% in 2020.
· Apple, Microsoft, Google look to move production away from China. That’s not going to be easy
With the U.S.-China trade war last year and the outbreak of the new coronavirus, American technology firms Apple, Microsoft and Google have reportedly looked to move more production of their hardware products out of the world’s second-largest economy.
But reducing reliance on China won’t be easy.
“China manufacturing is far more embedded into American supply chains than ever before,” Sean Maharaj, managing director at AArete, a global management consultancy.
Eyes on Vietnam, Thailand
Google and Microsoft are accelerating their efforts to shift production of hardware to other parts of Asia, the Nikkei Asian Review reported last week.
The problem for all these countries is that moving supply chains quickly will be a tough task and China will still have to play a major role. That might mean mitigating risk is a lot harder.
The Nikkei, citing people with direct knowledge of the matter, said Google is set to begin production of an upcoming low-cost smartphone, rumored to be called the Pixel 4a, in Vietnam as soon as April. The upcoming flagship smartphone will also be manufactured there in the second half of the year, according to the report.
Google has also asked a manufacturing partner in Thailand to prepare production lines for its so-called smart home products, such as voice assistant-enabled speakers, Nikkei said. Meanwhile, Microsoft is hoping to start production in Vietnam in the second quarter for its Surface line of notebooks and desktop PCs, it added.
· Oil prices rose more than 1% on Thursday ahead of an OPEC meeting in which Saudi Arabia is expected to push the group and its allies including Russia to agree to further output cuts to support the market.
Prices were also supported by a lower-than-expected rise in crude oil inventories in the United States, alleviating some concerns of oversupply in the world’s biggest oil consumer.
Brent crude LCOc1 rose by 67 cents, or 1.3%, to $51.80 per barrel by 0436 GMT, while U.S. West Texas Intermediate (WTI) CLc1 was up by 55 cents, or 1.2%, at $47.33 per barrel.
· CRUDE OIL FORECAST: OIL PRICE HINGES ON OPEC MEETING & EXPECTED PRODUCTION CUT AMID CORONAVIRUS SHOCK TO DEMAND
Oil is trading near 15-month lows after the novel coronavirus outbreak and backtrack in Middle East tensions caused the commodity to crash over 20% from its January high
Crude oil could recover recent downside with the prospect of extended production cuts from OPEC and its allies on the horizon
The price of oil might also benefit from global central banks keeping financial conditions accommodative in aims of boosting economic activity
Shifting focus to a technical perspective, we find that crude oil has, so far, found technical support around the $45.00 price level. This seems to align closely with the positively sloped trendline extended through the August 2016 and December 2018 swing lows.
While this week’s OPEC meeting could provide crude oil with a catalyst that helps propel the commodity higher, technical resistance presented around the $50.00 price level may thwart a rebound in oil prices.
If this area of confluence can be overcome by crude oil bulls, however, the $52.50 mark might come into focus as the next possible upside objective. That said, a bearish death-cross of the 50-day and 200-day simple moving averages looms, which might reiterate the broader downtrend in crude oil price action.
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