There is an indication that the coronavirus epidemic in China might be spreading instead of stopping. After several days of reported drops in the number of new infected patients, today it became clear that two different prisons not located in Hubei province (where the majority of the cases are) are now fighting the COVID-19 virus. With more than 200 inmates and staff affected, the authorities expect the number of to keep growing in the prisons’ enclosed space.
The total number of people suffering from the virus has now reached 75,685 in China, with over 2,000 deaths. Besides China, where the majority of the patients are, Japan and South Korea are affected the most. Japan is still keeping some 600 patients quarantined on a ship, where only passengers testing negative have been permitted to disembark.
Whatever modest optimism the financial markets were feeling earlier, likely due to earlier drops in the number of new cases of the virus and governments unveiling stimulus packages to support their economies, today none of that applies.
Risk aversion is extremely high right now. Beware of the Japanese yen, however. Even though the JPY is a popular safety asset, the virus has affected Japan, and investors are therefore avoiding it. Other Asian currencies are also not in a good place. The US dollar is the preferred safe haven currency instead.
Other reliable safety assets today include he Swiss franc and precious metals, especially gold.
