Local, For Now

The World Health Organization stopped short of calling the new coronavirus from central China a global health emergency, saying the outbreak that’s killed more than a dozen people and sickened hundreds remains a local crisis. Public health experts gathered by the United Nations agency to review the situation were split over whether they should recommend declaring a public health crisis of international concern and instead opted to continue monitoring the outbreak. Tedros Adhanom Ghebreyesus, the WHO’s director-general, said he would reconvene the committee within 10 days, or at a moment’s notice should the situation take a turn for the worse. “Make no mistake, this is an emergency in China, but it has not yet become a global health emergency,” Tedros said at a briefing in Geneva Thursday. “It may yet become one.” The virus is believed to have emerged last month in a seafood and wildlife market in Wuhan, prompting local officials to shut down all travel from the city of 11 million people. It’s part of an effort to curtail the spread of the pathogen amid widespread travel during the Lunar New Year. Meanwhile, the virus is nonetheless spurring panic in Hong Kong, where residents can’t seem to find enough face masks. Here’s a map of how the outbreak has spread across the world.

Markets Mixed

Asian stocks headed for a mixed start to Friday trading as investors assessed the fallout from the deadly coronavirus. Treasuries climbed and oil dropped, while futures pointed higher in Japan and Australia and lower in Hong Kong. U.S. stocks eked out a small advance helped by gains for big tech companies, and over in mainland China, markets are shut for a holiday. The yuan stayed lower and the yen held gains. Elsewhere, the euro weakened after policymakers suggested they will need to maintain ultra-loose stimulus settings for the foreseeable future. Oil remained under pressure amid concern the virus may dent energy demand.

Bullseye

According to Japan’s bullish chartists, stocks could rally like it’s 1989, if so-called golden cross patterns are any guide. But for the market to rally toward levels unseen since before the nation’s economic bubble burst about three decades ago, the Nikkei 225 Stock Average would have to climb enough so that its 12-month moving average goes above its 24-month average, forming a golden cross, according to Yukihiro Takahashi, a manager at Ichiyoshi Securities Co. in Tokyo. Definitions of such technical terms differ from analyst to analyst, based on moving averages for various time periods as well as other factors. In Takahashi’s analysis, golden crosses have occurred four times on the Nikkei 225 since 1980, with the most recent being in January 2013, when the gauge extended a rally that drove it higher for six of the past seven years. So when will it next happen? “A golden cross would require the Nikkei 225 to surpass the highest price seen in October 2018,” Takahashi said. “Even if it doesn’t form this month, looking at the MA lines, it will most certainly form next month.”

Not Now!

Philip Lowe is on track to reach a milestone that has eluded him since taking the helm of Australia’s central bank 40 months ago: His inflation target. But given the circumstances, he’d no doubt prefer not to. The combination of drought and wildfires that first parched and then scorched Australia’s east coast has not only left communities devastated, but crops incinerated and distribution networks in disarray. That’s set the scene for a spike in fruit and vegetables. Some of it will come through in the final quarter of 2019 — with data due out Wednesday — and the rest in the first quarter. Australia’s inflation hasn’t reached the mid-point of the Reserve Bank’s 2%-3% target in more than half a decade. A sharp rise in headline inflation — as a result of Australia’s extreme weather that precipitated the supply cuts — would therefore shock markets, which are pricing in further RBA cuts this year.

Pause Button

Christine Lagarde’s inaugural move as European Central Bank president could presage the institution’s first hiatus in policy activism for years. While ECB officials will keep their ultra-loose stimulus settings — negative interest rates and monthly bond purchases — for the foreseeable future, a modest improvement in inflation pressures and a change of leadership have given them space to stop and assess their mission. The scant details of that review revealed by Lagarde on Thursday, and in a subsequent press release, maybe a letdown for watchers of the institution who wanted more. But they also hint that policy makers lack any urgency to share their thinking, while suggesting they’re in no hurry to getting back to tweaking their current monetary stance either. But the ECB isn’t the only central bank to benefit from what is, for now, a relatively benign economic outlook. Many economists including those at Goldman Sachs predict most major central banks, including the Federal Reserve, which meets next week, is likely to keep its monetary policy on hold for the rest of the year.

What We’ve Been Reading

This is what’s caught our eye over the past 24 hours.

• House Democrats say Trump’s stonewalling puts “Nixon to shame.”
• Rich Chinese buyers are snapping up Singapore luxury homes to ring in the Lunar New Year.
• Ghosn’s escape from trial is fueling debate over justice in Japan.
• In Hong Kong, choosing where to eat has become a political act.
• The Philippines is making roads and cement with plastic garbage.
• Bayer is discussing a $10 billion roundup settlement for thousands of claims against their cancer-causing weedkiller.
• The jailing of a Chinese student for tweets he sent while studying in America shows Beijing’s powerful reach.
• Facebook is pointing the blame at smartphones after the Bezos phone hacking.