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Coronavirus Fear Grips Markets | Commodity-Linked Currencies in the Red

Published January 27, 2020
  • With the number of coronavirus cases and deaths racking up, fear is starting to set in across the world, and it’s being reflected in financial markets.  US equity futures are deep in the red this morning after seeing Japanese and European stocks selloff overnight, and the risk-off sentiment has sent the yen, dollar, and US treasuries higher.  The market moves are likely being further inflated by low-liquidity with many Asia-Pacific markets closed for holidays.
  • Oil is selling off as markets fear demand will drop off with the virus forcing many businesses in China to shut down.  The selloff has seen oil prices plunge 2.5% to the lowest levels since October, taking commodity-linked currencies with it.  The kiwi and aussie dollar have fallen nearly 1% on the news, while the loonie is down nearly 0.4% – its lowest since December 13.
  • President Donald Trump’s impeachment trial resumes today and Senate Republicans could be under pressure to allow new witnesses after a New York Times report was released that mentions an unpublished manuscript from former National Security Advisor John Bolton.  The report cites several people familiar with the manuscript as saying Trump explicitly told Bolton he wanted to freeze Ukraine aid until the country helped investigate Joe Biden, and his son, Hunter.  It is uncertain whether the claim will be admitted as evidence, or if Bolton will be called on to testify, but everyone will be watching to see if these developments end up swaying moderate Senate Republicans into allowing witnesses or subpoenaing more documents.