China remains on the lips of investors as the most pressing issue shaping the markets right now. The world’s second-largest economy does business with virtually any other country in the world, which is why China’s problems affect everyone.
Businesses are currently trying to restart their activity after the Lunar New Year celebrations, this year extended to help people avoid mingling in the midst of a deadly viral outbreak in the country. However, the return back to work has been slow, with many factories remaining partially or fully closed still. International events that China was meant to host (and benefit from economically) have all been canceled.
While it is difficult to estimate the precise damage to the Chinese economy inflicted by the coronavirus epidemic, it is certainly significant. The People’s Bank of China might have to bail out many to-be-bankrupt businesses in the weeks to come, which will further hinder economic growth.
According to the latest information, there are now over 40,000 people affected with the coronavirus in China. As of today, there have been over 1,000 deaths. The World Health Organization is trying to take charge of the outbreak, sending teams in China, and holding an emergency conference in Geneva at the same time.
In the current market situation, safety assets are benefiting the most. Among them, the US dollar stands out as the best performing currency, additionally boosted by the excellent results from fundamental reports released in the United States in the past few days.
Today we also expect the Q4 GDP report from the United Kingdom. A growth drop from 1.1% to 0.8% of growth is forecasted for the UK.
