Virus Fears Drive Sell-Off in Stocks, Oil, Yuan: Markets Wrap

(Bloomberg) -- Deepening fears about the economic and human impact of the deadly coronavirus sent stocks, crude oil and China’s yuan tumbling Monday, and spurred haven assets. Italian bonds jumped after regional elections.The Stoxx Europe 600 Index sank at the open, with all 19 industry groups in the red. Contracts on the S&P 500 signaled the underlying index will add to Friday’s losses, which were the most since October. Many Asian markets were closed for holidays with the exception of Japan, where stocks slumped and the yen climbed. Futures on Chinese shares fell more than 5% and the yuan erased this month’s trade-deal driven gains in the wake of news that the virus continues to spread, with no peak in sight.Ten-year Treasury yields and West Texas crude both hit their lowest levels since October. In Europe, Italian 10-year bond yields slid by the most since August after a regional election bolstered prospects for stability in the country’s current coalition government.Fears over the spreading virus, whose death toll has risen to at least 80, is spurring caution at the start of a week jam-packed with earnings. Tech giants Apple, Facebook and Samsung are among those due to report this week. Investors will also have a Federal Reserve policy meeting and Mark Carney’s last monetary policy decision as the Bank of England’s governor to monitor.“Any economic shock to China’s colossal industrial and consumption engines will spread rapidly to other countries through the increased trade and financial linkages associated with globalization,” Stephen Innes, chief Asia market strategist at Axitrader, wrote in a note Monday. “I’m starting to think cash is the right place to be for the next few weeks.”China announced an extension of its Lunar New Year holiday through Feb. 2 to help battle the spread of the disease. Beijing also suspended the sales of package tours, hitting firms around the world that rely on Chinese travelers’ spending. Air transport providers were the worst performers in Japan’s session, while Thailand’s stocks slid the most since 2016. Here are some events to watch out for this week:Tech giants Apple, SAP, Facebook, Samsung and South Korean chip maker SK Hynix announce earnings, as do Boeing, International Paper, GE, United Technologies, Lockheed Martin, Caterpillar, Lockheed Martin, Unilever, Exxon Mobil, Shell and Chevron.The Senate impeachment trial of President Donald Trump continues in Washington Monday.Fed policy makers are expected to open 2020 the same way they closed 2019 -- by holding interest rates steady Wednesday.The BOE meeting is highly anticipated Thursday after a series of dovish comments raised speculation policy makers could lower interest rates.The U.S. reports fourth-quarter GDP Thursday.The U.K. is scheduled to leave the European Union Friday.\--With assistance from Alfred Cang and Saket Sundria.To contact the reporters on this story: Cormac Mullen in Tokyo at cmullen9@bloomberg.net;Todd White in Madrid at twhite2@bloomberg.netTo contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, Yakob PeterseilFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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