• Alphachain Team

Another volatile week ahead

Traders and Investors are expecting another volatile week. The main themes currently headlined are the coronavirus and the end of President Trump's impeachment trial.

There are now over 18,000 confirmed coronavirus cases with the virus now spreading to 20 countries. It is likely this will remain mainstream media and will more than likely get worse before they start to improve.


A number of US airlines have announced they would now begin cancelling flights to China and Russia has closed their borders to china.


As the virus spreads, there is a growing fear the outbreak could become a pandemic, which could prompt further restrictions on not just travel, but also trade. US markets had their worst week in 6 months as stocks tumbled on continued fears that coronavirus could slow economic growth.


Chinese shares plunged almost 8% on their first day trading after the effects of the country's coronavirus outbreak continued to ripple across the world.As for the presidential impeachment trial, it seems President Trump is on track for exoneration on Wednesday after the Senate rejected calling new witnesses and documents.


The "State of the Union" address is scheduled to occur amid the trial. Meaning President Trump will deliver the annual speech Tuesday before senators give their verdict on Wednesday.


Monetary policy will remain in focus over the course of the coming week. In terms of policy decisions, this week sees the first Reserve Bank of Australia decision of the year, with rates set to remain unchanged at 0.75%.


However, given the on-going downside risks to the Australian economy, policymakers will likely strike a dovish tone, with markets continuing to fully price in a rate cut before the end of the year.


Markets will also pay close attention this week to remarks from ECB President Lagarde, who is set to make three speeches, with particular focus on any hints at the ECB’s strategy review.


On the data front, this week is all about labour market reports, with jobs data due from the US, Canada and New Zealand.


Of course, the US labour market report will be the biggest market-mover, with markets expecting a solid payrolls gain of around 160,000 last month.


Elsewhere, the monthly PMI surveys continue with reports for the services sector on Wednesday, while attention will also fall on the latest US factory orders figures as well as the EU Commissions latest growth forecasts, due on Thursday.


Finally, cryptocurrencies acted as a safe haven asset last week. Bitcoin had gained 12% and Ethereum is up nearly 14%.


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