The first week of Market Recap of February was marked by a resurgence in demand for risky assets as market concerns about the spread of coronavirus from China and its impact on the global economy diminished. The central bank of China announced that the epidemic will have a short-term effect on economic growth.
Nevertheless, the Chinese regulator took significant monetary stimulus measures, announcing a 1.2 trillion yuan (174 billion dollars) bond repurchase program, which boosted the Chinese stock market, and also triggered the growth on global stock exchanges.
Here are the market movers of the week
A number of other factors also contributed to the growth of stock markets and the weakening of safe-haven assets, in particular:
- Reports on the breakthrough in the development of the coronavirus vaccine from China and the UK.
- China halved tariffs on goods imported from the USA for a total value of $ 75 billion.
- A number of Fed officials said there was no significant impact of the epidemic on the US economy.
- The US Senate voted against the impeachment of President Trump.
- Positive macroeconomic data from the USA, in particular, data on purchasing managers’ indices and employment change.
This week market participants will remain focused on the dynamics of the spread of coronavirus and reports on measures to combat the epidemic. The People’s Bank of China may announce new monetary stimulus measures this week. In particular, it is likely that the regulator will cut the interest rate and reserve requirements.
Also, traders will follow the results of the OPEC + meeting, which may take place on February 14-15. Sources from OPEC reported a possible increase in oil production cuts by 600 thousand barrels per day.
On Tuesday, data on UK GDP will be presented, which may affect the position of the Bank of England regarding the interest rate and move the pound.
On Wednesday, a meeting of the Reserve Bank of New Zealand will take place. It is expected that the regulator will decide to keep the interest rate at 1%. Indications on further plans of the regulator will determine the dynamics of the New Zealand dollar.
On Friday, data on US retail sales and German GDP will be presented.
Following this week in our market recap, a number of companies will publish quarterly reports, in particular: Alibaba, Nvidia, Pepsi, Canopy and Airbus.