Aussie dollar hammered, stock slide slows


Some semblance of calm returned to stock markets overnight as US and European indices reversed, or at least stymied, several days of heavy losses. The coronavirus situation remains fraught with danger, as the number of new cases of the coronavirus outside of China begins to exceed those within China. That dynamic is keeping traders on edge, with markets pricing-in the potential for a sustained economic slowdown.

Heightened uncertainty is keeping volatility very elevated in equity markets. The VIX swung around the 27-to-28 level last night – well above any level that may suggest risk appetite is “on” in the market. It’s meant that trade in stock markets last night has proven choppy and highly active. European shares edged higher, with the FTSE100 up 0.35 per cent, though the DAX dipped by a narrow 0.1 per cent. And in US trade, the S&P 500 pared early gains to close down 0.4 per cent.

The day ahead will be dominated by the coronavirus as market participants look for every stat pertaining to the possible global spread of the disease. But a few other highlights exist on the calendar.

Local Private CAPEX data is released, and will follow yesterday’s disappointing construction numbers. US preliminary GDP and core durable goods data is out tonight. While in local corporate news, the likes of Afterpay and a2 Milk will have their results digested.

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