Aussie Drops, With Traders Cautious on Virus Woes: Markets Wrap

The caution that’s gripped financial markets lately showed no signs of letting up as trading got underway this week, with concern that the coronavirus will hamper growth prospects hitting the Australian and New Zealand dollars. The yen gained.

Equity futures indicated a soft start across the Asia Pacific after the S&P 500 Index lost 1.1% on Friday. Over the weekend, finance chiefs and central bankers from the world’s largest economies said they see downside risks to the global economy persisting as supply chains get disrupted from the deadly virus. Japan is shut for a holiday and Treasuries won’t trade until the London open.

Treasury yields last week reached fresh lows and global equities declined as investors took a defensive stance as new virus cases outside China lifted anxiety levels. South Korea has seen a 20-fold increase in cases in five days and Italy canceled some public events after coronavirus infections rose to 140.

“While the coronavirus is probably slowing in China, it is speeding up elsewhere,” said Charles Gillams, managing director at RJMG Asset Management Ltd. “Its impact on Chinese business is already deep. So, whether that has a one economic quarter impact — of some severity — or is a bigger issue remains unclear and indeed we won’t know for while.”

Here are the main moves in markets:

Stocks

  • The S&P 500 fell 1.1% on Friday.
  • Futures on Australia’s S&P/ASX 200 Index declined 0.7%.
  • Hang Seng futures added 0.3%.

Currencies

  • The yen rose 0.2% to 111.36 per dollar.
  • The offshore yuan slipped 0.1% to 7.0418 per dollar.
  • The euro bought $1.0832.
  • The Aussie slid 0.4% to 66 U.S. cents.
  • The kiwi declined 0.4% to 63.22 U.S. cents.

Bonds

  • The yield on 10-year Treasuries dropped five basis points to 1.47% on Friday.

Commodities

  • West Texas Intermediate crude lost 0.9% to $53.38 a barrel on Friday.
  • Gold added 1.5% to $1,643.41 an ounce.

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