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27 Jan 2020, 03:11 PM IST

(Bloomberg) --

Good morning. Stocks and oil are starting the week firmly lower as the coronavirus spreads, the populist leader of Italy’s League party suffered defeat in a key regional election and the U.S. embassy in Iraq came under fire. Here’s what’s moving markets.

Virus Hits Markets

Stocks and crude oil are tumbling once again, with havens including the yen and Treasuries jumping, as fears deepen about the impact of the deadly coronavirus on near-term growth. The death toll from the illness climbed to at least 80, while confirmed cases in China surpassed 2,700. The Chinese government has extended the Lunar New Year holiday amid reports that the infection’s spread is accelerating around the globe. Outbreak worries have now also become a source of unrest in Hong Kong.

Salvini Defeat

Italy’s Matteo Salvini suffered a stinging defeat in a key regional vote, providing a much-needed boost to Prime Minister Giuseppe Conte’s fragile government and making a snap general election less likely. Interior Ministry figures showed a center-left bloc led by the Democratic Party, a partner in Conte’s ruling coalition, at 51.3% in Emilia-Romagna. A center-right group headed by Salvini’s anti-migrant League trailed at 43.8%. The defeat for the populist firebrand, after a failed power grab last year, will likely settle nerves in the market and could push yields on Italian government debt lower. Here’s a list of the stocks that could be in the spotlight Monday.

U.S. Embassy Hit

Five Katyusha rockets were fired at the fortified Green Zone in Baghdad Sunday night, one directly hitting the U.S. Embassy building, Iraq’s security forces reported, while local media said U.S. helicopters were seen evacuating injured people. While the U.S. said it did not comment on injuries, it noted there have been 14 attacks on U.S. personnel in Iraq since September. Such attacks by Iran-linked militia groups have increased since the U.S. airstrike this month that killed Iran’s top commander Qassem Soleimani and Abu Mahdi al-Muhandis, the head of Iran-backed militia Kataib Hezbollah.

Talking Trade

There’s much trade news to digest, starting with comments from U.S. Treasury Secretary Steven Mnuchin, who said he’s focused on getting a deal with the U.K. this year. Officials in London, meanwhile, downplayed concern over the impact of Britain’s dealings with Chinese firm Huawei Technologies Co. on discussions with Washington. Elsewhere, the European Union’s chief negotiator, Michel Barnier, said he’ll work “night and day” for a pact with the U.K., just as EU officials said they hope to achieve a breakthrough in relations with America, possibly by using shellfish.

Coming Up…

We ease into the week with a distinct lack of corporate earnings in Europe, but don’t get comfortable, there’s a whole bunch of reports scheduled to be released in the coming days, starting Tuesday with Dutch health tech giant Philips NV and French luxury goods group LVMH. Meanwhile, in macroeconomic data, we’ll get the German Ifo business climate survey index after Friday’s better-than-expected manufacturing purchasing managers index for January.

What We’ve Been Reading

This is what’s caught our eye over the past 24 hours.

Kobe Bryant’s brilliant and complicated legacy.
Billie Eilish sweeps top four prizes at Grammy Awards.
U.K. to relax visa rules for top scientists.
Kim Jong Un’s aunt reappears years after husband’s execution.
Monzo in funding talks with Softbank, Telegraph reports.
Turkey quake kills at least 38.
New Boeing jet takes to the skies.

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net