Global stocks edged lower late on Thursday and extend losses at the end of the trading week, as coronavirus concerns are back in focus amid the reports about a rising number of infections both in China and outside. For example, South Korea reported over 50 new cases on Friday, so the total number of infections in the country rose to 156. As long as the virus keeps spreading all over the globe, investors will continue to assess the potential negative impact on the world economy and corporate earnings. More and more investment banks start to warn about the consequences from the outbreak, adding to the worries among investors. 

Against this backdrop, Wall Street futures point to further losses after a decline from all-time highs overnight. European stocks have settled in the negative territory following a sell-off in Asia. Oil is edging lower as well, remaining sensitive to virus-related news. Meanwhile, demand for safe haven assets, including gold, Swiss franc and the Japanese yen, reemerged. The precious metal extended the rally to fresh multi-year highs around $1,636 and remains elevated during the European session. 

On the positive side, both German and Eurozone PMIs in manufacturing and services exceeded expectations in January, the official data showed on Friday. The reports helped to somehow ease concerns over the potential recession in the Europe’s largest economy and thus lifted the euro from long-term lows below 1.08. Still, the pair is yet to confirm a break above this level as the recovery momentum looks unconvincing and too modest to call a bottom. 

In the near term, should the risk-off tone ease at least partially, global stocks may trim intraday losses and even regain some ground. But at this stage, as investors continue to digest the gloomy signals from the coronavirus front, downside risks will likely persist. Later in the day, the US PMIs may affect market sentiment and the dynamics in USD pairs. Strong numbers could send the euro back below the 1.08 handle, and gold prices may retreat from the current highs. 


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