05.02. Retail sales in the eurozone in December fell 1.6%, worse than forecast

According to the European statistical agency Eurostat, retail sales in the eurozone in December fell by 1.6% compared with November. Analysts had expected a decline of 0.9% month-on-month.

On an annualized basis, retail sales in the eurozone in December increased by 1.3%, although analysts had expected growth of 2.4%.

In all EU countries, retail sales in December decreased by 1.3% compared with November, and year-on-year – increased by 1.9%.

The largest annual sales growth in December was recorded in Hungary (+ 6.1%), Romania (+ 8.5%), as well as in Malta (+ 5.9%). The decrease was recorded in Slovakia (-2.5%), Slovenia (-6.6%) and Finland (-1.6%).

10.02. Gold rises in price, the market estimates the economic damage from the coronavirus

Today, Gold quotes rose to a week maximum, reaching $ 1,580 per troy ounce. The precious metal is getting more expensive as rising concerns about the effects of Chinese coronavirus have increased the attractiveness of defensive assets.

The number of coronavirus victims on Sunday increased by 97 and exceeded 900 people. Thus, more people have already died from the new virus than from SARS almost two decades ago.

Gold also gained support as the dollar moved away from a four-month high versus a basket of major currencies.

12.02. China maintains its goal of GDP growth despite coronavirus exposure

Deputy head of the PRC Academy of Social Sciences Cai Fan said that China will be able to achieve its long-term goal of doubling GDP and income this year, despite the consequences of the outbreak of Coronavirus. The epidemic will have only a short-term effect on the country's economy, after which demand will recover quickly, Chinese officials think.

The economist also noted that the impact of a virus outbreak will slightly reduce growth and other development indicators, but these consequences will not be long-term. According to him, the growth rate of about 5.7% this year will be sufficient to achieve the goal of doubling GDP and income.

Cai also added that the Chinese authorities should use policy tools in a timely and flexible manner, as well as apply «non-traditional policy tools» to support the economy.

It was previously noted that the outbreak of coronavirus in 2020 could reduce China's economic growth by 1 percentage point.

14.02. US industrial production in January fell by 0.3%

According to the US Federal Reserve, the volume of industrial production in the United States in January decreased by 0.3% compared to the previous month. Analysts polled by Reuters expected a 0.2% drop.

The value for December was revised: the decrease in industrial production in the country in the reporting month is estimated at 0.4% in monthly terms against the previous estimate of 0.3%.

The US industrial production index is one of the key indicators of the economy, reflecting the physical volume of products manufactured by American companies.

18.02. Apple shares fell on Tuesday

Stock prices of the American company Apple Inc are reduced today by 3.6% during preliminary trading. Even earlier, the stock drop exceeded 4%. The Nasdaq stock index, which calculates the company's securities, fell 0.9%.

The fall was caused by a warning from Apple that the company's revenue in the second fiscal quarter (ending March 30) would not reach the previously announced values due to an outbreak of coronavirus in China. As you know, all Apple's manufacturing facilities are located outside of Hubei Province, which is the epicenter of the disease, and all of them have already resumed work.

However, the recovery is slower than planned, which has led to a temporary restriction in the supply of iPhone smartphones worldwide. At the end of January, the company gave a forecast in which it estimated revenue in the current quarter at $63-67 billion with the resumption of production by February 10.

02.20. Gold has risen to a high in 7 years

Gold prices rose to a maximum in 7 years due to fears that an outbreak of coronavirus will slow down global growth, as well as amid rumors that the US Federal Reserve will cut the interest rate by the end of the year.

At the auction on February 20, the price per troy ounce of gold amounted to $1,621.45 – a similar price of gold was fixed at the beginning of 2013.

Although the number of new cases of coronavirus infection is declining, signs of deepening economic damage from the epidemic continue to put pressure on markets. Moreover, two deaths were recorded in Iran, which indicates the active spread of the disease outside of China.

The minutes of the last meeting of the US Federal Reserve showed that the regulator can leave rates unchanged for several months of 2020, but traders predict at least one decrease in 2020.

25.02. Italy has become the epicenter of the spread of Chinese coronavirus

Italy warned the EU that it could require substantial assistance if the unexpected spread of coronavirus in the country's industrial regions would have serious negative consequences for the economy.

On Monday, it became known about 8 cases of death from a coronavirus in Italy, the number of people infected in the country rose to 231. Most cases of infection were recorded in the northern regions of the country, which together account for about a third of Italy's GDP and about half of Italian exports.

Schools and universities have already been closed in these regions, and mass events, including the Venice Carnival, have been suspended.

Italian Deputy Economy Minister Laura Castelli said that the EU needs to be prepared to come to Italy’s rescue if the country faces an economic shock as a result of the effects of coronavirus. Analysts suggest that the economic consequences of the spread of coronavirus can be significant. According to estimates of the Bank of Italy, the epidemic factor will subtract 0.2 percentage points from the country's GDP growth rate in 2020.

02.27. European stock exchanges fall by more than 3% on concerns over coronavirus

Major European stock indexes on Thursday evening accelerated the pace of decline and are already falling by more than 3%. Experts note that the pressure on the exchanges is caused by concerns for the global economy, which is under pressure from the situation with the coronavirus.

In particular, the British FTSE 100 index falls by 3.02%, to 6824.55 points, the French CAC 40 – by 3.28%, to 5502.16 points, and the German DAX – by 3.1%, to 12357.11 points.

Investors continue to assess the risks of a slowdown in the global economy amid the continued spread of the coronavirus, which is becoming a pandemic. Coronavirus and related quarantine measures pose risks to many areas of the economy, including trade, transportation and tourism.

02.03. Italy's GDP growth slowed in 2019 to 0.3%, a minimum for 5 years

According to official figures, Italy's economic growth in 2019 has slowed to its lowest level since 2014 of 0.3% compared with 0.8% in 2018. Italian authorities predicted a recovery rate of 0.1%, a consensus forecast by experts provided for an increase of 0.2%.

Consumer spending in Italy last year increased by 0.4%, government spending decreased by 0.4%. Business investment grew by 1.4%, including investment in construction jumped 2.6%. The volume of exports from Italy in 2019 increased by 1.2%, the volume of imports decreased by 0.4%.

Italy's budget deficit last year amounted to 1.6% of GDP, which is the lowest since 2007. In the previous year, the budget deficit was 2.2% of GDP. The public debt indicator remained at the level of 2018 – 134.8% of GDP.

The official forecast for 2020 assumes a country's GDP growth of 0.6%, but many experts note the possibility of a recession in the economy due to the spread of coronavirus. The Italian government intends to revise the budget parameters for 2020 to take into account the urgent costs of supporting the economy in the context of the spread of coronavirus.

The authorities plan to spend at least 3.6 billion euro to support the economy, including the provision of tax benefits to businesses, as well as measures to support exporters to mitigate the negative effects that the spread of coronavirus could have on the economy.

04.03. US Federal Reserve cut the rate unscheduled for the first time since 2008

The Federal Reserve Board unexpectedly lowered its base interest rate from 1.5-1.75% to 1-1.25%, dropping it by 50 basis points at once. Market participants expected that the regulator would make a decision on a rate change only at the meeting on March 18.

The Fed has taken emergency measures in connection with the spread of the coronavirus, which creates additional risks for economic activity, and the fall of markets. The last time a rate cut occurred outside of a scheduled meeting of the regulator was during the 2008 crisis.

It is noted that the Central Bank came to such decision amid pressure from the US Presidential Administration Donald Trump.

11.03. Bank of England urgently cut rate to deal with coronavirus effects

The Bank of England unexpectedly lowered its base interest rate in an attempt to support the British economy amid the spread of coronavirus in the country. Yesterday, the Monetary Policy Committee voted unanimously to lower the rate by 50 basis points to 0.25%.

The regulator did not change the volume of the government bond purchase program (435 billion pounds) and kept the purchase volume of corporate bonds at 10 billion pounds. At the same time, the central bank lowered its countercyclical capital buffer for banks from 1% to 0% and launched a new small business lending support scheme.

The regulator noted that although the extent of the economic shock from COVID-19 is very uncertain, business and production activity in the country may significantly weaken in the coming months.

This emergency cut in the Bank of England rate was the first since the global financial crisis of 2008. As a result of this step, the rate returned to a record low level achieved after the Brexit referendum in 2016.

13.03. The EU will allocate 37 billion investment to combat the effects of coronavirus

The European Union decided to create an investment initiative of €37 billion as part of a package of measures to protect the region’s economy from the effects of a coronavirus outbreak. This was stated today by the President of the European Commission Ursula von der Leyen.

Additional measures that the executive branch of the European Union will take include the provision of flexibility to member states regarding budget deficit rules and government aid.

The EU will also use 1 billion euros of EU money to guarantee up to 8 billion euros in loans to 100,000 companies affected by the coronavirus epidemic to support the corporate sector.

The Head of the European Commission at the same time noted her conviction that the EU will be able to withstand economic shock only if each member state lives up to its full responsibility.