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DAILY MARKET REPORT

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China’s annual inflation rate jumped to 5.4% in Jan 2020 from 4.5% in December, above the market consensus of 4.9%. The fastest acceleration since October 2011 was mainly down to the skyrocketing price of food.  The price hikes were mainly caused by the Lunar New Year holidays and novel coronavirus outbreak.

EQUITIES

Asian stocks ended the day higher, taking comfort from Beijing’s steps to support the economy as workers stepped back into offices after an extended Lunar New Year holiday. Most of the factories in China started to work on Monday, but many are expected to remain shut for longer. While global shares fell on Monday as the death toll from a coronavirus outbreak exceeded the SARS epidemic two decades ago.

OIL

Oil prices dropped on Monday Asian session due to after a growing virus hit demand in the world’s largest oil importer. Concerns about supply were not eased on Friday. Russia said it needed further time to decide on a recommendation from a technical committee that has advised the OPEC, and its allies to cut production by a further 600,000 barrels per day.

CURRENCIES

Pound struggles around 10-week low amid hard Brexit fears and currently trading above 1.29 after dropping fresh low on Monday to 1.2870. The US Dollar found strong buyers to end Friday as the top performer, reflective of the solid jobs data.

GOLD

Gold prices held steady on Monday as rising concerns over the severity of the coronavirus outbreak offset a slight reprieve for equities after China eased some work and travel restrictions.

Economic Outlook

On Friday, US NFP topped estimated with a number of +225K vs +165K expected. While the unemployment rate jumped to 3.6% from 3.5%.

The latest updates on the coronavirus show an additional 89 deaths in mainland China on Saturday, bringing the total death toll around the world to at least 813. The WHO announced it will send a team to China to investigate the outbreak of the deadly virus

Technical Outlook

AUD/USD: The pair jumped above 0.67 today benefited from positive Chinese inflation figures. The pair may continue to push higher if it holds above 0.67.

Gold: The yellow metal trading weaker in the European session after surged to 1575$. The safe-haven metal may continue to lose ground, as early signs of bearish reversal have emerged on the weekly chart.

Quote of the day: Work for a cause, not for applause. Live life to express, not to impress.

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