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Novel coronavirus outbreak will have a certain impact on China’s economy but the size and duration will be limited, the People’s Bank of China’s (PBoC) noted in its monetary policy implementation report for the fourth quarter.

“The fundamentals of China’s economy have not changed,” the PBoC added. “China’s economy, however, also faces several challenges but will fend off major financial risks.”

Market reaction

The market sentiment seems to be improving following the PBoC’s remarks with major European equity indexes adding 0.45% and 0.7% and the 10-year US Treasury bond yield turning virtually unchanged on the day 1.565%.

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