Market Comment | Virus contagion fears spook markets, amid absence of relevant drivers

Financial markets slid back as coronavirus contagion fears increased, ahead of the Chinese New Year. Equity and sovereign bond yields fell sharply, while investors increased the appeal for safe-haven currencies (JPY and USD).

Key points

• Key points:
• Cases of potential infections have been detected in 7 countries.
• The ECB left monetary policy unchanged. The statement notes a mild increase in underlying inflation and a slightly less negative balance of risks.
• Economic data released were weak in US and Europe.
• US-EU trade frictions prevailed.

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