Market comment | Swing back to ‘risk-off’ as virus scare grows in Beijing and beyond China

Summary

COVID-19 spillover concerns rattled financial markets as cases jumped, particularly in Beijing, Japan and South Korea while leading multinational corporations issued coronavirus warnings for Q1. Implied volatility in equity markets surged (VIX at 17; +3).

Key points

• Key points:
• COVID-19 cases jump in Japan, South Korea and Beijing.
• Eurozone PMIs surprise positively in Feb despite C’virus, while slightly disappointing in the U.S.
• Sovereign yields attracted fresh safe-haven flows breaching January’s lows
• Equities dropped across the board, except for the Chinese CSI 300 index.

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