More refief for equity markets

There was more respite for stocks yesterday which recovered some further ground from what was in any case a relatively modest sell-off recently on concerns about the coronavirus, though whether they are now out of the woods remains to be seen. Core bond yields nudged higher again as equities gained, with US 10-year yields closing up around 7bps at 1.60%. The main currency pairs are not much changed, however, with the dollar if anything a touch firmer against the euro at under $1.1050, and the pound hovering just below 85p against the single currency and just above 1.30 against the dollar

Economic activity in China expanded in January but the pace of growth slowed (in both services and manufacturing) according to the latest PMIs there, though they probably have not yet captured the effects of the coronavirus

Former Fed Chair Janet Yellen notes that past experience of epidemics showed them to be short-lived events that did not inflict a lasting economic impact, while acknowledging the coronaries is “clearly a
source of uncertainty and risk to the global outlook”

The Purchasing Managers’ index (PMI) for the construction sector in the UK rose in January but remained below the 50 expansion-contraction threshold, which points to a continuing but slower pace of decline in activity at the start of 2020

Data due today includes services PMIs in the main economies as well as the ISM n0n-manufacturing index and the ADP private sector employment report in the US