Concerns about the spread of the coronavirus are still hanging over the market but the focus has shifted on company earnings and some green shoots of improvement in the UK economy. UK house prices showed moderate gains in January, rising at the fastest rate since the end of 2018.
The currencies are treading water ahead of the Federal Reserve’s rate setting meeting later Wednesday and the Bank of England’s meeting on Thursday. The former is not expected to yield a change in the Fed’s interest rates but instead to continue to sound a slightly cautious tone about the direction of the US economy.
In the UK the Bank’s last meeting before Brexit is likely to show ambiguity among the rate setters, with more leaning towards a more dovish approach that would help bring the UK economy back on track. However, with Brexit around the corner the Bank may hold off on any major changes until later this spring. The pound is a touch weaker against the dollar but is holding versus the euro in slim trade.
US earnings galore
The US corporate calendar for Wednesday is bursting at the seams with 46 companies out of the S&P 500 due to report later today. The three largest are Boeing (NYSE:BA), Microsoft (NASDAQ:MSFT) and McDonalds, and like other companies this week they will not be able to avoid investors’ questions about the effect of the coronavirus, particularly McDonalds, which had to close branches across China as the virus’ spread intensified.