Oil prices dropped more than 1% on Tuesday, falling for the third consecutive session, amid persistent concerns about slowing oil demand as coronavirus cases spread beyond China. A large increase in Italian cases have deepened concerns about an economic disruption in Europe and sparked fears of slower demand there. In addition to Italy, the number of infections continued to rise in Iran and South Korea, exacerbating worries that the new virus will grow into a pandemic. Keeping a floor under prices were involuntary production curbs in Libya and prospects for deeper OPEC output cuts to support the market. US crude dropped as much as 1.8% to 50.46 a barrel while Brent fell nearly 1.3% to 55.62 a barrel around 10:30 AM NY time.

US Stocks turned lower on Tuesday after a failed attempt to recover from the previous session’s sharp drop, amid persistent concerns over global economic fallout from the fast-spreading coronavirus. A rise in infections in South Korea, Iran and Italy has increased worries that the coronavirus outbreak in China will grow into a pandemic with disruptive consequences for countries around the world. The Dow Jones lost 93 points or 0.4%; the S&P 500 retreated 14 points or 0.4%; and the NASDAQ fell 31 points, or 0.3%, around 10:30 AM NY time.

The Manufacturing Activity Index in the US fifth district including the District of Columbia, Maryland, North Carolina, South Carolina, Virginia, and most of West Virginia decreased to -2 in February of 2020 from 20 in the previous month, missing market expectations of 13. All three components of the composite index deteriorated: shipments (1 vs 29 in January); new orders (-10 vs 13) and employment (8 vs 20). In addition, firms reported a decrease in backlog of orders (-6 vs 9). Meantime, respondents reported a rise in the rates of growth of both prices paid (1.95 from 1.21) and prices received (1.54 from 1.31). Finally, manufacturers were optimistic that activity would improve in the coming months.

Mexico’s gross domestic product contracted 0.1 percent in the fourth quarter of 2019, the same as in the previous period and below a preliminary reading of stagnation. The primary sector shrank 1.1 percent, after expanding 3.6 percent in the prior quarter; and industrial output dropped 1.2 percent, faster than a 0.4 percent decrease in Q3, mostly due to manufacturing (-2.2% vs -0.2%) and mining (0.5% vs 1.4%). On the other hand, services activities grew 0.2 percent, following stagnation in the previous period, mainly driven by retail trade (0.5% vs -0.1%), real estate (0.6% vs 0.3%) and education (0.3% vs -0.8%). Year-on-year, the economy shrank 0.5 percent, after declining 0.3 percent in Q3. Considering 2019 as a whole, Mexico’s economy shrank 0.1 percent, following a 2.1 percent growth in 2018, marking the first contraction in a decade, on the back of lack of investment amid uncertainty over economic policies of President López Obrador during his first year in office.

The Confederation of British Industry's monthly retail sales gauge rose to +1 in February 2020 from 0 in the previous month, missing market expectations of +4. Still, it was the highest reading since last April, with firms planning to boost investment in the year ahead for the first time in two years. The gauge for volume of orders placed on suppliers improved (-13 vs -17), while that for volume of sales for time of the year fell (-14 vs -7). Meanwhile, the level of expected volume of annual sales dropped into negative territory (-3 vs 0).

Exports from Hong Kong dropped 22.7 percent over a year earlier to HKD 269.4 billion in January of 2020, the most since February of 2009, distorted by the difference in timing of the Lunar New Year and the impact of the coronavirus infection in the region. Exports were dragged by lower sales of electrical machinery, apparatus and appliances, & electrical parts thereof and telecommunications and sound recording & reproducing apparatus and equipment. Among major trading partners, shipments decreased to Japan, Malaysia, China, the UK, the US and Germany.

Stock markets across Europe reversed early gains and traded in the red on Tuesday, following a sharp sell-off in the previous session, after the WHO voiced concerns about the rapid increase in COVID 19 cases reported in Italy over the past two days and sent a mission to support Italian authorities. The DAX 30 fell 0.8% to an eleven-week low of 12,933, after latest data confirmed Europe’s largest economy stalled in Q4; the FTSE 100 retreated 0.8% to 7,100, its lowest since early October; the CAC 40 lost 0.8% to over two-month low of 5,744; and the FTSE MIB slid 1% to 23,183, the lowest since mid-December around 11:40 am London time. The IBEX 35 was down 1.4% to 9,346, the lowest since December 11th, after a hotel in Tenerife was lockdown after an Italian guest tested positive for the Chinese virus.

Poland's unemployment rate increased to 5.5 percent in January 2020 from 5.2 percent in the previous month and in line with market expectations. It was the highest jobless rate since April 2019, as the number of unemployed rose by 56 thousand to 922.4 thousand. A year ago, the jobless rate was higher at 6.1 percent.

Mexico’s current account shifted to a USD 2.49 billion surplus in the last quarter of 2019 from an upwardly revised USD 2.82 billion deficit in the corresponding period of the previous year and compared with market expectations of a USD 3.5 billion surplus. The goods account swung to a USD 3.08 billion surplus from a USD 0.52 billion gap in Q4 2018; and the services shortfall narrowed to USD 1.12 billion from USD 2.89 billion. Meanwhile, the primary income deficit widened to USD 8.39 billion from USD 5.25 billion a year earlier; and the secondary income surplus declined to USD 8.91 billion from USD 9.48 billion. Considering 2019 as a whole, the country’s current account gap declined sharply to USD 2.44 billion from USD 23.0 billion in 2018.