Coronavirus

While the Coronavirus retains the greatest focus for international investors, the knock-on effects of the virus on monetary policy and other markets such as oil and credit are also starting to become more pronounced. The virus continue to spread, with Northern Italy closed and increased cases being reported across the world. However, it appear that a peak has been reached in China, showing that the spread can be contained.

US economy

Stronger than expected US employment data for February was shrugged aside on Friday. The attention is on what happens next. The collapse in stock and commodity prices indicates that demand is expected to slow sharply in the first quarter. How far will that spread into the second three months of the year and beyond?

The sharp decline in oil prices is a reflection of the weakness that is expected in the world economy and the breakdown of the OPEC accord Friday. Saudi Arabia and Russia failed to agree on production cuts that would have supported oil prices. Russia, it is said, wants to use lower oil prices to put pressure on higher cost US shale suppliers. There is already concern that the slowdown in economic activity will affect credit ratings and the ability of smaller firms to access funds for working capital.

The election

It is increasingly likely that Biden will win the Democratic nomination. Attention is elsewhere for the moment.

THe week ahead

The main focus in the week ahead will be the meetings of central banks. The ECB will meet Thursday. Interest rates are already close to zero. There may be a new move towards quantitative easting.

FT Week ahead