Asia Coronavirus Watch: Short term sentiment stays volatile as markets wait, see and fear

• The confirmed patients rose from 31,161 on 6 Feb to 63,851 on 13 Feb in mainland China partially due to the further inclusion of clinical diagnoses into confirmed cases in Hubei province. The growth of new cases in other provinces was moderate. It seems clear by now that, focusing on ratios of confirmed patients may not be enough to draw implications about the market or economic impact.
• Travel restrictions on China increased to more countries and/or quarantine measures were tightened. Countries with strong tourist inflows from China seem to be less strict, such as Thailand, Canada, the UK and Japan. But the existing restriction still poses headwinds to sectors, such as hospitality and airlines.
• Firms in less affected areas are gradually resuming operations but there are few signs of a full-fledged resumption in Hubei province, which could cause short -term disruptions especially in the automobile sector as Hubei, alone, concentrates 9% of car production in China.
• Our big data indicators based on Chinese media confirmed the worsened sentiment on manufacturing.
• As for the RMB, after a mild appreciation from 7.00 to 6.96, the USDCNY has stabilized at 6.98. The Shanghai Composite Index rallied by 1.43% in anticipation of s stronger stimulus from the government. 
• The PBoC injected RMB 100 billion on Feb 11 via seven-day reverse repos at the reduced rate of 2.40% after a 10 bps cut a week ago. The move aims to offset the reverse repos coming to maturity and, more generally, to maintain liquidity in the market.
• Several cities, such as Wuxi, Xian, Shenzhen, Nanchang, Shanghai, and the Zhejiang Province have implemented targeted policies to alleviate potential liquidity risk of real estate developers.

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