25 February 2020 by jbchevrel
Markets continued the sharp risk-off move which had started yesterday. In our European close time, Main and IG were +2.5 XOver and HY were about +10. CDX EM widened by +8. The focus is still on the global pandemic risk on coronavirus. Today global coronavirus cases reached 80,000 in Asia time, with 60 new cases reported in South Korea and 449 new cases reported in China. Italy number of cases official is 229. Tianjin university in China and US pharmaceutical/biotech company Moderna both claimed to have developed coronavirus vaccines. The Moderna’s vaccine will now proceed to phase one tests on humans, while the Tianjin university is currently looking for partners to run clinical trials on its vaccine... President Trump has requested $2.5b from the Congress to help fight the coronavirus outbreak, over $1 billion of which would be used to manufacture a vaccine. Interestingly, Chinese state media reported that 6% of Chinese firms face bankruptcy as a result of the coronavirus outbreak. In the UK, BoE Chief Economist Andy Haldane said that a “big chunk, if not all” of the Brexit related uncertainty facing the UK economy had been lifted. Haldane suggested that a fall in Brexit related uncertainty should help to boost investment spending, although he cautioned that it’s “too early to declare victory”. In the US, Cleveland Fed President Mester (voter) described the coronavirus outbreak as a “downside risk” but reiterated her view that the Fed’s current policy stance is appropriate pointing to “growth near its trend pace, solid labour market conditions” and inflation “not far” from 2%.