Global equity markets had a volatile start to 2020, as fears of the coronavirus outbreak caused an uptick in market volatility. January got off to a good start with indices in the US, Australia and New Zealand making new all-time highs, but concerns around the virus saw most benchmarks give back some gains.

With the pickup in volatility and lingering concerns with regards to the coronavirus, February could provide further periods of volatility. Here’s what ANZ is watching heading into the month:

CORONAVIRUS AND POTENTIAL ECONOMIC IMPACT

As the fallout from coronavirus continues, the economic impact from the disruption of global travel and trade is hard to get a handle on. Comparisons are being made to the 2002-2003 SARS outbreak, which, according to the National Institute of Health, cost the global economy US$40 billion.

Given the potential risks, we have seen large corporations take significant measures, including McDonald’s and Starbucks, which temporarily suspended operations in Wuhan and surrounding cities in an attempt to halt its spread.

If we see an escalation in the number of people or a widening reach of the virus, we could begin to see growth impacted.

RESERVE BANK OF NEW ZEALAND LIKELY TO LEAVE INTEREST RATES UNCHANGED

On 12 February, the Reserve Bank of New Zealand will meet for the first time in 2020 and the first in nearly three months.