Market comment | Risk-off mood extends, fueling bond demand. FOMC preview

Increasing contagion fears boosted sovereign bond demand and significantly dragged commodities and equity markets, especially companies with exposure to China

Key points

• Key points:
• Coronavirus contagion fears increase, boosting market-based risk measures (VIX 18
• Oil prices plunge, leading the OPEC and its allies to hold a meeting to study measures
• : Investors seek shelter in bond markets
• Equity extends declines sharply, led by material sectors and companies with their production channel in China
• Italian bonds boosted by easing political risk

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