Coronavirus update: Italy cases surge from three on Friday morning to more than 130 by Sunday
- Alarming weekend reports on the spread of the coronavirus to keep markets in risk-off.
- Europe has been tarnished with the coronavirus which now participates in the world's 78,854 confirmed cases.
- Italy's confirmed cases surged from three on Friday morning to more than 130 by Sunday.
Financial and commodity markets were drooping in the final sessions of last week, mostly due to the uncertainty among corporations surrounding the spread of the coronavirus (COVID-19) epidemic from China to neighbouring countries sparking-up a fresh dose of recession fear.
US benchmarks ended a two-week win streak with the Dow Jones Industrial Average shedding 227.51 points, or 0.8% in its worst one-day percentage drop since February 7th. The Nasdaq Composite Index lost 174.37 points, or 1.8% for its worst single-day percentage fall since January 27th and the S&P 500 lost 35.48 points, or 1.1%, to settle at 3,337.75, its biggest one-day percentage decline since January 31st.
There are now 78,854 confirmed cases of novel coronavirus and 2,465 deaths worldwide, according to the latest figures and while Tthe majority of the cases and deaths are in mainland China, followed by Japan and South Korea, Europe is now reporting its biggest outbreak in Italy, with confirmed cases surging from three on Friday morning to more than 130 by Sunday.
Here are the top five countries to have experienced outbreaks beyond China:
- Japan: 738 cases, 3 deaths. (639 cases on Diamond Princess cruise ship and 99 on land.)
- South Korea: 602 cases, 5 deaths
- Italy: 132 cases, 2 deaths
- Singapore: 89 cases
- Hong Kong: 74 cases, 2 deaths
The immediate conclusion is how fast the coronavirus could spread beyond Italy and around Europa, although EU Economic Affairs Commissioner Paolo Gentiloni told reporters in Riyadh on Sunday, speaking after a meeting of G20 financial leaders in Saudi Arabia, “the EU has full confidence in the Italian authorities and the decisions they are taking." The European Union “shares the concern” but sees “no need to panic”, Gentiloni proclaimed.
The outbreak in Italy killed two people and infected 130 others. The government introduced an emergency lockdown in many municipalities in Italy’s north.
The euro is already on its knees, suffering due to economic weakness in the bloc and the market's demand for US stocks and USD denominated investments. On news such as this which will rear-up panic among consumers and uncertainty for businesses, the immediate concern will be the negative consequences for the European economy, further weighing on the single currency. The EUR/USD ended the week around the 23.6% retracement of its latest sell-off at 1.0853, (slightly north of a 78.6% Fibonacci retracement of the 2016 - 2018 range). The bias is to the downside although, should short-term retail sellers prefer to cash in at this juncture or the market seek out sell stop liquidity prior to a test below the 20th Feb lows as being 1.0777, then a meanwhile case could be made for an extension towards 1.0899, a 38.2% retracement and prior support structure.