Risk squeezed as markets feel the viral.......>

FOREX: Risk squeezed as markets feel the viral effects

-The further spread of the Coronavirus beyond China's borders and the extended

closure of Chinese business for Lunar New Year has dragged risk sentiment lower

for a negative start to the week for equities. This has boosted the likes of

JPY, CHF, to the detriment of AUD, NZD and EM currencies. Despite onshore CNY

markets being closed, CNH is also weaker, helping USD/CNH crack back above both

the 200- and 50-dmas. EUR is also seen weaker on a poorer-than-expected set of

German IFO data, raising doubts over the solidity of any recovery in the German

economy.

-EUR/CHF plunged to fresh multi-year lows following the release of a set of

broadly unchanged SNB sight deposits data. The numbers are further evidence that

the SNB are refraining from FX interventions after Switzerland were placed on

the US Treasury's watchlist for currency manipulation a few weeks ago. The new

low now sits at 1.0688, with next support layered at the February 2017 lows at

1.0632.

-US new home sales for December are due, but there are no speakers of note.