Today will be quiet due to the Presidents' Day in the United States, and Wall Street is closed.
In Japan, there is some worrying news regarding growth, as GDP in the fourth quarter contracted by 1.6%, mainly due to the increase in the VAT rate from 8% to 10%. This is one of the signs of the impact of the coronavirus outbreak.
The epidemic is still in an ascending phase. On Monday, the official death toll in mainland China was 1,770 deaths and 70,500 cases of contamination. Outside the country, about 600 people are infected and a first death was recorded in Europe (the 80-year-old Chinese national treated in France). In Japan, the liner "Diamond Princess" has started to be evacuated from its patients: it is the largest outbreak recorded outside China. Cruising is no longer fun and the whole tourist sector is going to experience a difficult time.
The Chinese authorities continue to irrigate their economy to get through the crisis. Earlier today, the PBOC reduced the rate of the one-year medium-term loan facility from 3.32 to 3.15% and injected 300 billion yuan into the financial sector. It is whispering that this move could foreshadow a cut in the main policy rate on Thursday.
This week, Europeans will take note of the ZEW index, which measures the confidence of doubtful German financiers (Tuesday) and several indicators, including the minutes of the latest Fed (Wednesday) and ECB (Thursday) meetings. Then on Friday, February's flash PMI indicators will allow us to take the pulse of the world's main economies, with a negative outlook, due to the coronavirus.