Morning 2-3

As OF last Night 17238 confirmed cases; 361 deaths; 479 cured patients; 21558 cases suspected


We got your back is what the People bank of China said to markets, Some are relating at to the Draghi Comment when he said ”Whatever it takes”. This appears to be China’s mantra as they do all they can to limit downside in Stocks, provide stimulus to try and ease the pain on an Economy that will slowdown. China’s measures:
China’s central bank unexpectedly lowered the interest rates on reverse repos by 10 bps on February 3rd as authorities stepped up efforts to support the economy suffering from the Wuhan coronavirus outbreak.( trading Economics)
BBG Sources: China Sec Regulator told some brokerages that their prop traders are not allowed to be net sellers of equities this week unless they face redemptions
Joint statements from PBOC/ Banking/ Insurance/ Securities/ FX Regulators & Finance Ministry China will use various mon pol tools to ensure ample liquidity; it will lower lending rates to support firms affected by coronavirus outbreak; the broader eco impact from coronavirus should be temporary ( ITC markets)

China delivered a raft of confidence boosting measures ahead of its market reopen following the Lunar New Year holiday. The list of actions included 1) large gross liquidity injection of CNY1.2tn; 2) banks asked to extend and not call loans in Hubei region; 3) the regulator halting night sessions for futures trading; 4) share pledge contracts extended by up to 6-months; and 5) limiting short selling activity. ( IFR news)


The Central bank Playbook is in hand the Worse it gets the more of an Increase in Central bank measures. Recall too the worldwide markets already reacted to Corona Virus and its Expected impact to China’s Economy, Chinese markets have not had a chance till yesterday and as a result they were more of a follower overnight instead of a leader. Stimulus measures created a firm tone in risk and higher yields. Central bank of Australia Rate Decision Tonight could be very interesting they are expected to leave rates unchanged but who knows they may want to get ahead of the Expected Slowdown.


Market attention will turn towards U.S. today with the release of the ISM manufacturing Data and the Iowa Caucus to see if any Surprises are to be seen. Bernie sanders and Biden are the Front runners.


Markets:
Angst and disagreements between U.K and EU 3 days into their divorce Pound down 145 ticks -1.13%, GBP vs EUR -.9%. Spoos +21 handles, .6% Nasdaq +.75% Oil Steady as OPEC discussing whether to call an emergency meeting this week to talk about Production cuts. Per Bloomberg 75% Chance of An Interest rate cut at June Meeting up from 40% one week ago. Gold and JPY off a bit do the Partial Bounce in Risk. Markets are not in the Clear todays is about Central bank soothing markets nerves Corona virus has not peaked and true assessment of the Economic damage is not known.

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