While markets are closed in China for the Lunar New Year celebrations, developments in China continued to have significant market impacts as concerns about the spread of the coronavirus weighed on stock and commodity prices this morning.
Reuters reports, “Crude prices dropped 3% to three-month lows on Monday as the death toll from China's coronavirus grew and more businesses were forced to shut down, fueling expectations of slowing oil demand.” In New York, NYMEX crude oil futures approached $52 per barrel (after having traded as high as $65/bbl earlier in the month) while COMEX copper futures were down 7 cents to $2.61 per pound in early trading. In London, base metal prices were lower across the board today, with LME 3-mo. aluminum and nickel trading as low as $1,763/mt and $12,560/mt, respectively. The flight to safe-haven assets pushed gold futures above $1,580 per troy ounce as the Japanese yen (109.0 per dollar) and Swiss franc (0.97 per dollar) gained ground. On Wall Street, the Dow Industrials were down more than 300 points in mid-day trading following even larger losses at the major European bourses earlier in the day.