International equity markets finished the week lower as fears of the economic impact the coronavirus grew. In the US, the S&P 500 fell 1% over the week, while other major indices also lost around 1%. The economic uncertainty saw demand for safe-have assets – namely bonds and gold rise.

The selloff has continued into Monday’s session with stocks in the US trading lower. As at 9 a.m. New Zealand time, indices in the US are down more than 1%, while the US 10-year government bond yield is trading at 1.61%, down nearly 20 basis points from last week’s high.

What’s happening in markets

The spread of the coronavirus has increased concerns around global growth with disruption to travel and trade potentially undermining economic growth. People in more than 10 countries have been diagnosed with the virus, which originated in Wuhan, China. Worldwide, there have been nearly 3,000 cases confirmed and more than 80 deaths, mostly in China.

Coronavirus aside, it was a relatively upbeat week for economic data with strong Chinese activity data pointing to a stabilisation of the economic slowdown and better-than-expected Eurozone ZEW survey (sentiment survey).

Downunder, there was some positive economic news too with Australian employment numbers beating expectations and New Zealand CPI data rising at a faster rate than most had expected, but still falling short of the 2% mark.

What’s on the calendar

The final week of January is a busy one on the economic calendar with central bank meetings, earnings and politics atop the list.

On Wednesday, the Federal Reserve will hold its first meeting of the year and is expected to leave interest rates unchanged. Furthermore, the Fed isn’t expected to deviate from its ‘on hold’ bias.