On Thursday, the risk sentiment was dented again amid fresh coronavirus headlines. The epidemic seems to tighten its grip outside mainland China where the situation continues to improve. South Korea and Italy remain the most affected countries however the disease keeps on spreading worldwide impacting the global economy. Earlier this week, the WHO finally declared the new COVID-19 outbreak a pandemic.
Today, Italian authorities decided to close all shops except for food stores and groceries. Prime Minister Conte said that restaurants, cafes, bars, and hairdressers would be closed as well. Most public places such as schools, museums, and nightclubs are already shut however the situation is still dismaying. In the last 24 hours, the death toll rose by 30% to 827 while the total number of coronavirus cases is 12,462 people.
South Korea reported 114 new cases and 6 more deaths on Thursday. According to Reuters, the country has 7,869 infected patients while the death toll is at 66. Guyana confirmed its first coronavirus case – a Guyanese woman who returned from the United States was tested positively for the new disease. The first patient with coronavirus was also registered in Cuba while Sweden reported its first death from the new virus.
Meanwhile, the US President Trump announced a 30-day ban on travel from Europe to the US that will come into force on Friday. However, the UK, which has only 460 coronavirus cases, was exempted from the restriction. In the US the 1,135 people fell victims to the new disease, the virus took lives of 38 patients. The famous actor Tom Hanks and his wife Rita Wilson were tested positively for coronavirus.
All this news disappointed markets and supported the safe-havens such as Japanese yen, Swiss franc and the US bonds. The EURUSD pair recovered yesterday’s losses and spiked to the 1.1330 region however lost its traction and dropped to the mid-1.1200 area.
The main event today is the ECB’s interest rate decision and press conference that will follow. The Bank’s head Christine Lagarde will face the first tough challenge amid the severe coronavirus outbreak that plagued Europe. And while markets are pricing in a 13-basis point cut analysts don’t share this opinion as such a move may hurt the banking system. Another option to increase monetary policy stimulus is to step up its asset-purchase program. Anyway, given the global tendency to ease the ECB will probably follow other banks’ suit. The euro has been trading in a volatile manner as of late so the decision may be significant for the further pair’s dynamics.