In China, the sanitary and monetary measures taken by Beijing in response to the Coronavirus have clearly reassured the markets. Drastic containment measures and massive injections of liquidity to stabilize prices have contributed to the calm. Despite a toll that now exceeds 42500 cases and a thousand deaths, the WHO also reports a stabilization of the contagion. Although it is still too early to draw any conclusions, activity in China has partially resumed.

In the United States, indicators are showing their strength. Hiring in January far exceeded economists' expectations, driven by the construction and health sectors, while nearly 183,000 people returned to the labor market. For their part, the ISM indicators recorded their first increase since last July.

In Europe, prices rose by +1.4% over a year, but the ECB is still failing to come close to its inflation target (close but below 2%). Christine Lagarde nevertheless chooses to be optimistic. Despite the Chinese epidemic, the president of the institution notes the beginning of stabilization in the monetary union. She attributes this to monetary support from Frankfurt, which she does not in fact intend to interrupt in the midst of a period of convalescence.

In the United Kingdom, the tone logically hardened in the wake of January 31, ratifying the official divorce between London and Brussels. As the transition period and trade negotiations now open, Michel Barnier, chief negotiator for the EU, warns that the 27 will not accept "unfair competitive advantages" across the Channel. But Boris Johnson, in his role, retorts that he refuses to align with Europe's rules. According to the Bloomberg news agency, this would allow the EU to amend its market regulations to further weaken the City. On the macro front, PMI indicators in both the services and manufacturing sectors are picking up, confirming the recovery of the UK economy since the beginning of the year.

Finally, in Australia, the RBA is seeing various signals emerging confirming that the slowdown in global growth, which began in 2018, is coming to an end. The central bank has therefore not deemed it necessary to lower the cost of money once again, which is stagnating at 0.75%, despite the risks currently weighing on neighboring China.

In the coming days, Forex traders will be watching several central bankers' speeches but especially a new monetary policy decision in New Zealand on Tuesday night (status quo expected). British growth for the fourth quarter of 2019 will be released on Tuesday, while U.S. statistics will be released at the end of the week, such as Consumer Prices on Thursday and Retail Sales or Consumer Confidence on Friday.

Graphically, the euro is finally letting go and evolving at levels not seen since the beginning of October. The single currency will now need to find more support as it approaches a key support level of 1.0899 to hope to temporarily bounce back to the USD 1.1056. Otherwise, it could register new lows since May 2017 and potentially accelerate towards the closing of the Macron gap (1.0725).

Brexit obliges, the British currency also takes the blow, failing to preserve 1.30 and seeking to consolidate between USD 1.2889 and USD 1.2829. Failing to preserve this zone, the cable could suddenly fall back towards USD 1.2212.

On the safe-haven side, the USD/JPY and EUR/CHF pairs continue to move in scattered order. The Yen is easing as concerns about the epidemic in China recede, while the Franc is now advancing to levels not seen since February 2017 against the single currency. The USD/JPY pair will first need to erase 110.20 in daily closing before allowing itself more upward momentum, provided that risk appetite takes hold again in the trading rooms. As for the franc, its high price became critical for the SNB and still leads us to envisage a sharp decline in the Swiss currency in the long term.

Finally, the Australian dollar remains anchored in its lowest levels since the financial crisis despite the status quo of the RBA followed by a timid attempt to rebound. Penalized by the relative strength of the greenback, the Aussie has been slow to rebound but the imbalances in trade still suggest a short squeeze that could quickly push the price back towards USD 0.6853.