Daily Market Update

Global Economic Growth To Half Due To Coronavirus; Ultra Loose Monetary and Fiscal Policies To Devalue Currencies

The coronavirus is now present on every continent except Antarctic.
Source: Johns Hopkins CSSE

◆ The coronavirus may plunge the global economy into the worst downturn and crisis since 2009, the OECD has warned as the virus is now present on every continent except Antarctic.

◆ As the epidemic continues to expand rapidly worldwide, topping 90,000 cases and 3,000 deaths, the OECD has urged coronavirus affected countries to take necessary measures ‘as quickly as possible’ so as to prevent another global financial crisis.

◆ Health experts and systems are reacting as the coronavirus spreads across several continents; Three patients in England tested positive for Covid-19 on Monday, bringing the total number of UK cases to 39.

◆ Six people have died in the United States, including residents of a nursing care facility; the U.S. has imposed stricter screening on travelers from Italy and South Korea.

◆ Northern Italy and Lombardy is in lock down and Italy is set to inject cash to help the virus hit economy; 3.6 billion euros (around $4 billion) is set to be injected into the economy.

◆ Twitter and other tech companies have asked all employees to work from home due to the virus; Google has instructed its Dublin office to work from home as a “precautionary measure,” after one of its employees reported virus like symptoms.


◆ Stocks bounce from massive 30% plus sell off and gold rises as central banks vow to act on coronavirus impact; central banks looks set to slash rates further and monetary stimulus and fiscal stimulus by governments is likely; the ECB is working on lending scheme for coronavirus hit SMEs.

◆ Research and history shows how gold outperforms stocks and most assets in recessions including recent research from the largest fund manager in the world, Blackrock. Blackrock have shown that in recessions, gold has gained 11.5%, while U.S. stocks in the form of the S&P 500 have fallen 34.1% (see here and table above).

Gold in USD – 5 Years



NEWS & COMMENTARY

Gold gains on hopes of rate cuts by global central banks

Gold Climbs as Bond Yields Tumble

Rome splashes cash to help virus-hit economy

ECB working on lending scheme for coronavirus – hit SMEs -sources

First Negative U.S. Yields Get Closer Amid Virus Fallout Fears

Yen, franc climb as coronavirus uncertainty outweighs stimulus hopes

February’s ISM manufacturing index is 50.1, vs an expected 50.8



GOLD PRICES (USD, GBP & EUR – AM/ PM LBMA Fix)

02-Mar-20 1609.70 1599.65, 1258.79 1251.41 & 1451.47 1437.29
28-Feb-20 1626.35 1609.85, 1262.37 1254.88 & 1474.61 1468.18
27-Feb-20 1646.60 1652.00, 1278.58 1282.45 & 1505.32 1504.97
26-Feb-20 1647.95 1634.90, 1273.37 1264.76 & 1515.45 1505.42
25-Feb-20 1655.90 1650.30, 1275.54 1271.39 & 1528.06 1522.73
24-Feb-20 1682.35 1671.65, 1304.49 1293.69 & 1555.84 1540.26
21-Feb-20 1633.70 1643.30, 1264.81 1269.12 & 1512.48 1515.29
20-Feb-20 1610.35 1619.00, 1250.11 1258.45 & 1491.99 1496.77
19-Feb-20 1609.50 1604.20, 1239.80 1237.80 & 1490.40 1486.29
18-Feb-20 1588.20 1589.85, 1218.47 1220.37 & 1467.34 1470.77


Financial Contagion – What Are The Risks?



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Mark O'Byrne
Executive Director

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