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The negative impact of the China coronavirus outbreak on Australia’s economy is likely to be significant, said Australian Prime Minister (PM) Scott Morrison on Thursday.

Key Quotes:

The effect of the virus, which has so far killed 563 people in China, will be a real weight on the economy as countries impose widespread travel bans. China has been on lockdown for weeks now as authorities battle to contain the spread of the virus.

We need to be clear about the full extent of the virus and how much further it will spread, the success of containment measures in other jurisdictions, that is not known and that’s why I think a scenario analysis is really important. And that’s being done now.

Market Implications:

It’s worth noting that China is Australia’s top export market. However, the negative effect from the virus is not being felt so far down under, as the market mood remains lifted by the reports of a breakthrough by several scientists across the globe to combat the infectious virus.

The Aussie dollar has shrugged-off dismal Australian Retail Sales data, with AUD/USD trading well bid above 0.6750.