In China, the virus has already killed nearly 2,500 people in about 77,000 cases. Around 30 other countries are concerned, including South Korea, Iran and also northern Italy (150 cases and 5 deaths) where quarantine measures have been taken on France's doorstep.

Concerns about the consequences for world growth are logically growing. Apple warns that its sales targets will not be met. Wall Street plunges 3% and expectations around a FED reaction rise. 25% of investors anticipate a rate cut by the US central bank in March, compared to 11% previously.

The president of the institution, Jerome Powell, took advantage of his semi-annual congressional hearing to repeat that he considered monetary policy to be appropriate for the current outlook, without however ignoring the risks linked to the epidemic. On the macro side, Uncle Sam's consumer prices and retail sales were in line with forecasts, but the PMI Composite indicator is acting as a first blunder for Washington this year by revealing activity in contraction for the first time since 2013.

In Europe, the picture remains equally mixed, although private activity accelerated slightly in February. In Germany, political uncertainty is mingled with growth at half-mast (0% in Q4 2019) following the resignation of Annegret Kramp-Karrenbauer, who has been promised a destiny as Chancellor. The chairwoman of Angela Merkel's CDU party is stepping down due to tensions within her political family linked to a potential circumstantial cronyism with the extreme right. As for the ECB, Christine Lagarde once again calls on the states to undertake the necessary reforms to support the European economy in the wake of the Frankfurt efforts, but coordinated action by the Nineteen seems highly unlikely at this stage. The European Commission is nevertheless optimistic and maintains its growth forecast for 2020 and 2021 (+1.2%).

On the other side of the Channel, the surprise resignation of the Finance Minister sets the tone. Several observers explain this by the hypothesis of significant fiscal dumping, aimed at countering the undesirable effects of the recent emancipation of the United Kingdom. The presentation of the budget is scheduled for 11 March. For the time being, UK GDP is expected to grow by 1.4% in 2019 and PMI indicators have surpassed expectations, confirming a high since 2018. During a speech in the House of Lords, Mark Carney, who will soon give up his position at the head of the Bank of England, also tried to reassure about the impact of the Coronavirus on the country's economy.

In New Zealand, the central bank endorsed an expected status quo but was less accommodating than expected. Indeed, the RBNZ seemed concerned about the level of inflation although it expects the epidemic in the Chinese partner to affect the local economy in the first half of the year and even beyond.

Finally, in Japan, the sharp drop in the yen on 19 and 20 February could be explained by arbitrage by the Japanese public pension fund, which would increase its participation in foreign government bonds.

In the coming days, Forex traders will mainly be watching for Coronavirus developments outside of China as economic news will be poor until the end of the month.

Graphically, the Euro has gotten its feet caught in the mat and failed to maintain a key support just below USD 1.09. The single currency will finally find more support under 1.08, just below the 20 April 2017 high of 1.0778. Breathing seems purely technical, however, and bounce selling continues to be attractive, first at 1.0919 and then potentially at USD 1.1014.

Feverish, the Pound has relied on 1.2880 to stay in contact with USD 1.30. Trading is balanced in this zone and we are away from parity.

Penalized by the strength of the greenback, the Kiwi has not benefited much from the content of the latest RBNZ statement and the New Zealand currency is once again approaching long-term support above USD 0.62, a threshold to be watched.

On the safe haven side, the EUR/CHF pair barely holds 1.06 at the daily closing on a technical reaction after having recorded levels not seen since mid-2015. The franc remains clearly overvalued, as the SNB itself acknowledges, and we remain long-term buyers.

Finally, the Yen is correcting its excesses. Despite the health crisis that is fueling risk aversion, the USD/JPY pair has made a noticeable comeback above JPY 112. Back in contact with 110.80, the course remains suspended to news related to the epidemic with a key level at 109.75 to be monitored.