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Global markets step back as no respite from Virus yet seen! (Friday, February 14, 2020)

Global shares eased on Friday, as investors were spooked by a sharp rise in the number of coronavirus cases in China this week while oil prices extended gains on hopes of more production cuts. MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.08% with South Korea's Kospi falling 0.25% while Japan's Nikkei slid 0.67%. U.S. stock futures shed 0.07% in Asia, after the S&P 500 lost 0.16%.

China's Hubei province on Friday reported 4,823 new cases, well above the levels seen earlier this month. While a record spike seen a day earlier was mostly due to new methodology used to count new infections, it nonetheless weighed on investor sentiment. Japan confirmed its first coronavirus death on Thursday, a third case outside mainland China after two previous fatalities in Hong Kong and the Philippines.

That meant more demand for the U.S. dollar in the currency exchange market. The dollar's index against a basket of currencies hit a four-month high, having risen 1.8% so far this month. The euro fell to as low as $1.0834, its lowest level in almost three years, in U.S. trade on Thursday. It last stood at $1.0840. It also hit a nine-week low against the British pound and 4-1/2 year low against the Swiss franc. The euro has been bruised also by rising political uncertainties in Germany as well as worries about sluggish growth in the region.

Annegret Kramp-Karrenbauer, who had been long expected to succeed Chancellor Angela Merkel next year, earlier this week gave up her bid to run for the top job, raising more concerns about political stability in the euro zone's biggest economy.

The euro zone GDP data due later on Friday is expected show a paltry growth of 0.1%.

Sterling jumped and so did UK bond yields as investors bet on a higher-spending budget next month after British Prime Minister Boris Johnson forced the resignation of Sajid Javid as finance minister. Javid, known to have been at odds with Johnson's powerful policy adviser Dominic Cummings over spending plans, was replaced by Rishi Sunak, a Johnson ultra-loyalist. The pound traded at $1.3045, after 0.65% gains on Thursday. The 10-year gilts yield jumped to a three-week high of 0.660%.

Germany and Eurozone GDP data is due later in the day. Yesterday, data released by the U.S. Labor Department showed that the core Consumer Price Index increased 0.2% month-on-month in January, in line with expectations. The headline CPI was up 0.1%, slightly softer than expected. U.S. January retail sales data is due later Friday. Economists expect a 0.3% month-on-month rise.

The yen stayed in a familiar range in the past couple of weeks and last traded at 109.82 yen.

Oil prices extended their week-old recovery on hopes that he world's biggest producers would cut output more as demand looks set to drop sharply due to the outbreak of coronavirus.The International Energy Agency (IEA) expects oil demand in the first quarter to fall for the first time in 10 years. U.S. WTI crude futures  were flat at $51.42 per barrel in early Friday trade but up 2.2% on the week, on course to post their first weekly gains in six weeks.