Moody's: Coronavirus dents optimism just as global economy showed signs of stabilization

Moody's assumes that the coronavirus dents optimism just as global economy showed signs of stabilization. The rating agency has revised global growth forecasts down by two-tenths of a percentage point.

Key notes

• Coronavirus creates new risks to prospects of incipient stabilisation of global growth this year resulting from truce in US-China trade war.
• Expects G-20 economies to collectively grow at annual rate of 2.4% in 2020.
• Revised downward GDP growth forecasts for China to 5.2% in 2020, and maintains an expectation of 5.7% growth in 2021.

FX implications

Markets are on alert which likely supports the yen, weighs on AUD/JPY and caps advances in the commodity complex, albeit the technical outlooks are bullish for the CRB index which is breaking higher to test critical resistance.