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“It’s Like Cancelling Christmas” – Beijing Scraps Lunar New Year Festivities Amid Virus Outbreak

“It’s Like Cancelling Christmas” – Beijing Scraps Lunar New Year Festivities Amid Virus Outbreak The ‘Year of the Rat’ is starting not with a bang, but with a whimper. Thanks to the rapid spread of a deadly coronavirus that has confounded China’s public health officials and triggered massive quarantine operations intended to seal off at least three cities from the rest of the country (and world), Beijing has joined three other Chinese cities in cancelling Lunar New Year celebrations. CNBC’s Eunice Yoon reports that all public gatherings and activities have been cancelled, citing officials from Beijing’s tourism bureau. Beijing joins Wuhan, Zhejiang, Macau in canceling #LunarNewYear celebrations. #China capital’s culture & tourism bureau says all public gathering activities, incl. traditional temple fairs, are off. (Holiday is normally major consumer spending time. #WuhanCoronavirus) @TheDomino — Eunice Yoon (@onlyyoontv) January 23, 2020 Yoon tweeted that she was surprised when Wuhan cancelled its New Year’s festivities, even though it’s the epicenter of the virus. The fact that Beijing has followed suit is nothing short of extraordinary, and serves to underscore just how out-of-hand things have gotten with this virus. When Wuhan canceled #LNY festivities I thought that was like the West cancelling Christmas. Didn’t think Beijing would follow suit. — Eunice Yoon (@onlyyoontv) January 23, 2020 China’s state railway operator is offering full refunds to any Chinese impacted by cancellations. #China...

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ECB Keeps Rates, QE Unchanged; Launches First Strategy Review In 17 Years

ECB Keeps Rates, QE Unchanged; Launches First Strategy Review In 17 Years As expected, the ECB announced that it is keeping its rates and QE (€20BN/month) unchnaged, reiterating the familiar forward guidance that “interest rates to remain at their present or lower levels until it has seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2%”, while QE will continue “for as long as necessary to reinforce the accommodative impact of its policy rates, and to end shortly before it starts raising the key ECB interest rates.” Notably, the Governing Council also announced that it would launch the first review of its monetary policy strategy for the first time since 2003 in a rethink after years of radical monetary stimulus struggled to revive inflation. The institution said it will provide details about the scope and timetable of the exercise in a press release today at 3:30 p.m. Frankfurt time, following Lagarde’s press conference. As Bloomberg notes, her efforts to modernize the ECB include potentially resetting the inflation goal of “below, but close to, 2%,” studying alternative measures of price growth, and assessing its policy tools. She’s benefiting from signs that a deep manufacturing slump in the 19-nation economy is bottoming out before it causes greater harm to the labor market and consumer spending. That should allow policy makers to focus on the review, which...

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ECB Preview: A Long Road Ahead

ECB Preview: A Long Road Ahead The ECB are expected to stand pat on rates this week, according to surveyed analysts with markets currently pricing in around a 25% chance of a 10bps rate reduction at the first meeting of 2020; note, less than 3bps worth of loosening is currently priced in throughout the year. Focus for the press conference will center around the upcoming strategic review and how policymakers at the Bank evaluate the Eurozone’s growth prospects in lieu of recent macro developments. Below we present a summary preview of what to expect from today’s ECB announcement, courtesy of Christopher Dembik of Saxobank For the first meeting of 2020, we don’t expect to see any changes in policy stance as the macro outlook is broadly unchanged compared to the end of 2019 in the eurozone. There is a wide consensus that the ECB is on hold throughout 2020. Risks to growth in December have moved downward while the 5-year, 5-year forward inflation expectation rate, which has always been monitored closely by Mario Draghi, continues to show signs of improvement (currently at 1.3% vs 1.1% a few months ago). Macro-stability will allow the ECB to focus on the launch of the second strategic review in the 20-year history of the organization that is expected to last one year. At 15:30 today, we may have a document revealing the main...

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