By Lorcan Roche Kelly
Restrictions on travel in China were further widened, with 40 million people now banned from making journeys as authorities in the country ramp up measures to contain the spreading coronavirus. Travel agents have been ordered to suspend sales of domestic and international tours, with latest figures showing 25 people have now died from the illness. Lunar New Year events have been hit, with economists now starting to calculate the economic cost in a season typically marked by peak consumer spending.
IHS Markit’s composite Purchasing Managers’ Index for the euro area stayed at 50.9 in January, lower than expected by economists as France’s service sector was hit by strikes. In Germany, the manufacturing sector continued to shrink, while services outperformed, suggesting the country may be putting 2019’s weakness behind it. There was also better news for the U.K. economy with the composite reading jumping to 52.4, an improvement which potentially undermines the case for a Bank of England rate cut next week. PMI data for the U.S. is published at 9:45 a.m. Eastern Time this morning.
House managers, led by Intelligence Chairman Adam Schiff, will conclude their case for the impeachment of President Donald Trump today. The defense will present their case tomorrow, with Jay Sekulow, one of the lawyers representing Trump, already saying that there is no question that he will be acquitted by the Senate. It seems that the president may not be losing much support in polling ahead of this year’s election from the controversy, with his approval rating, among men in particular, remaining high.
Global stock markets appear to have shrugged off fears from the China virus outbreak, with green across the board this morning. Overnight the MSCI Asia Pacific Index and Japan’s Topix index were practically unchanged. In Europe, the Stoxx 600 Index was 1.1% higher by 5:50 a.m. with automakers the only industry group in the red. S&P 500 futures pointed to further gains at the open, the 10-year Treasury yield was at 1.732% and gold was lower.
It is a fairly quiet day on the economic data front, with only Canadian retail sales at 8:30 a.m. and U.S. PMI numbers at 9:45 a.m. In Switzerland, the annual Davos meeting is wrapping up, with ECB President Christine Lagarde among those in attendance today. American Express Co. is among the companies reporting earnings.