Quick Take
Geographics are playing a greater role in the adjustment of portfolio positioning as the COVID-19 plays out, with concerns over the spread now in Beijing and outside of China. When officials in China are even weighing the possibility of a “Wuhan-Level” lockdown, you know risk is that the market may go on ‘the defensive’.
The acceleration to buying into the USD portrays a market that is starting to diversify more aggressively away from Asian-based currencies (JPY, CNY, AUD, NZD) and into the allure of the world’s reserve currency. This comes as the seeking of yield continues in a world with excess liquidity and too limited places to park this capital.