Macro Dragon: US back in, China Coronavirus, BoJ, US/EU Tech Tues? Macro Dragon: US back in, China Coronavirus, BoJ, US/EU Tech Tues? Macro Dragon: US back in, China Coronavirus, BoJ, US/EU Tech Tues?

Macro Dragon: US back in, China Coronavirus, BoJ, US/EU Tech Tues?

Macro 2 minutes to read
Kay Van-Petersen

Global Macro Strategist

Summary:  Macro Dragon = Daily Cross-Asset Global Views

Today we glance over BoJ wash & potential US/EU Tech Tues. We also check in on the SARs like coronavirus that is hitting China as the Lunar New Year Migration (+3bn trips) is in the works with next wk being Chinese New Years. This has already had an equity price impact on leisure, travel as well as drug making China stocks overnight. Will be interesting to see if we get any US leadership for the bulls, as they get back in post MLK Mon.

(Note that these are solely the views & opinions of KVP, & do not constitute any trade or investment recommendations.)



Macro Dragon: China Coronavirus, BoJ, US/EU Tech Tues, US Back in


Today see’s the US back in…

So US back in today after MLK mon, which may bring some more leadership for the equity bulls – Europe was down across the board yest, with the key divergence to the upside being the DAX +0.17% 13548.

Remember the key near-term market risk highlighted yest that could reverse the DAX & further damped European equities. If we get a US/EU fallout (Trump vs. Macron), then we could have a brand new trade war. And yes, it would be classic Trump scrapbook playbook (if there is such a thing) – put out the window dressing exercise fire with China (for now), then immediately start a new one up with the EU (threaten their dax autos)


…While we have the coronavirus heading into Chinese New Year…

If a virus could pick an opportune time to hit the China, then there really is no better time for potential spreading than during the Chinese lunar new year, which marks the biggest annual human migration in the world. According to Bloomberg up to 3bn trips (railways, airlines, cars, boats, etc) will be done over this period. The new coronavirus is similar to the SARS virus which killed 800 people 17hrs back – whilst that is not large on the greater scale of the population of HK (where it broke out), it caused massive hysteria & panic during a small period, where people were literally giving away their homes for peanuts.

Whilst the situation is dynamic & fluid - So far its reported that over 200 people are ill, with Wuhan (city of 11m) looking like location-zero. So far there have only been 3 confirmed fatalities linked to the virus, which – early days – potentially suggests a lower mortality rate than say MERs which kills up to 1/3 of those it infects. SARS on the other hand, had a fatality rate closer to 10%.  

There have also been at least 4 confirmed cases of people who have left China (2 in Thailand, 1 in Japan & at least one in South Korea) that are infected with the corona virus. That number itself, suggests that statistically there should be a lot more ill people on the ground.

China has stepped up its speed in disclosure & transparency compared to previous outbreaks which is a huge positive for everyone. Obviously potential outbreaks are a fine line for any government – your priority is to contain, as well as educate the public, yet the last thing you want to do is induce a panic (i.e. some of the misinformation & lack of education in Ebola cases in Africa were just downright diabolical).

There is no doubt that eventually the virus will be contained – its just a question of when & does it scale in magnitude. Hard to see a case where this becomes super negative for CH (& proxy HK) equities, unless it somehow induces local panic selling – yet things would have to get dramatically worse for such a scenario. It would then be retail, travel & leisure stocks being hit, whilst biotech, healthcare plus defensive names would get bid. Still we got a taste of that overnight, with some CH drug makers having limit up days while Macau names & airlines had a tough session – obviously when the virus gets nipped in the bud, these moves should potentially mean-revert.  

The WHO is conducting an emergency meeting not immediately on Wed Jan 23 in Geneva, which could determine whether this gets raised to international status concern. Which to KVP is the paragon of incompetence & disconnected elitism in regard to procedures: any outbreak, anywhere in the world where the virus is jumping from human to human is of international concern.

One great thing about Asia – for those who have not traveled – is most airports have standard checkups for flus & sickness through temperature cams & officials monitoring travelers from potential high risk destinations. Talk about a role with a negative skew, if your successful in your job there is a chance you may catch something (like being a water digger - assuming you get paid per hour).  

End of the day, this is one to keep watching. And its worth noting that they have cured over 25 people who have caught the virus so far.

The BoJ later today…

  • The BoJ should be a wash, hard for KVP seeing any stimulus with DollarYen well north of 100 & it is almost inconceivable to see a move higher in rates given the outright level of debt in the system

Have a great wk everyone, good luck out there & don’t forget to keep your mind open to opportunities. For those travelling over Chinese New Year’s; Godspeed, smooth travels & have a well deserved break with loved ones. The year of the metal rat is going to be phenomenal!




On The Radar Today: (Times would be SGT)

  • NZ: Milk auction
  • JP: BoJ Rate Decision Meeting
  • UK: Jobs data   
  • EZ: ZEW economic sentiment  
  • CA: Mfg. Sales


Some Anchor Pieces from #SaxoStrats:


The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (
Full disclaimer (
Full disclaimer (

Saxo Bank A/S (Headquarters)
Philip Heymans Alle 15

Contact Saxo

Select region


Trade responsibly
All trading carries risk. Read more. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

This website can be accessed worldwide however the information on the website is related to Saxo Bank A/S and is not specific to any entity of Saxo Bank Group. All clients will directly engage with Saxo Bank A/S and all client agreements will be entered into with Saxo Bank A/S and thus governed by Danish Law.

Apple and the Apple logo are trademarks of Apple Inc, registered in the US and other countries and regions. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.