European markets are expected to open flat on Friday as investors monitor China’s coronavirus epidemic and a slew of corporate earnings.
China’s National Health Commission on Friday reported an additional 121 deaths and 5,090 new cases of the coronavirus across the mainland for Feb. 13.
China‘s health commission said Friday it removed 108 deaths from the total figure due to a double-count in Hubei province, the epicenter of the global coronavirus outbreak. The pneumonia-causing virus has killed a total of 1,380 people in mainland China as of the end of Thursday, the commission said in its Chinese-language daily online report.
Globally, market participants are monitoring the outbreak and updates on how badly it could dent growth in the world’s second-largest economy.
IMF spokesperson Gerry Rice said at a press conference on Thursday that the organization remained confident in the resilience of China’s economy, adding that the country “has the resources and the resolve to meet this challenge.”
However, S&P Global warned on Thursday that China’s credit rating may be downgraded if the government attempted to offset the economic impact of the coronavirus with heavy stimulus, Reuters reported. On Friday, the market analytics firm predicted that the outbreak could make it difficult for China to honor commitments made in its “phase one” trade deal with the U.S., as factories remain closed and consumer demand slumps.
Chinese policymakers are taking steps to minimize the shock to China’s domestic economy. The country’s central bank announced last week that it will ease monetary policy, while the Chinese government rolled out tax guidelines on Tuesday to help reduce financial pressure in key sectors.
Meanwhile, China is set to halve tariffs on U.S. products worth about $75 billion on Friday, as announced by Beijing earlier this month.
Back in Europe, Rishi Sunak was announced as Britain’s new finance minister on Thursday, taking over from Sajid Javid who resigned amid a reshaping of the government orchestrated by Prime Minister Boris Johnson.
A flash estimate of the euro zone’s full-year gross domestic product for 2019 is set to be published later on Friday.