Global rating giant S&P recently crossed wires, via Reuters, while signaling how the coronavirus epidemic will affect GDP numbers from China and the globe.
Key quotes
Coronavirus will lower Chinese GDP growth by 0.7 percentage point to 5.0% with peak effect in Q1 2020.
Expect a rebound in Chinese GDP in Q3. All lost output (to be) recovered by end-2021.
Coronavirus will trim a 0.3 percentage point from global GDP growth in 2020.
Expect a lag in lifting travel restrictions, return of more normal behavior by Chinese customers and to a lesser extent Asia-Pacific.
FX implications
Even if the downside risks to the Chinese and global economies are well spotted and could weigh on the trade sentiment, expected recovery keeps the market players hopeful. Following the news, USD/JPY rose four pips to the intra-day high of 109.82 whereas Gold stayed unchanged to $1,568.
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