Markets backed away overnight from an extreme pricing of the risk posed by the newly emerged coronavirus. Crude oil and share markets regained some recently lost ground, and bonds and gold softened in a correction of the recent risk sell off. A surge in US durable goods orders ahead of GDP data on Friday helped imbue optimism.

Base metals markets declined to join the party. Copper, aluminium and nickel added to recent falls in London Metals Exchange trading.

Indications of a possible two-week incubation period for the virus, and China markets still shuttered for holidays, means market attention may turn to data and central bank decisions in the coming sessions.

Both the Bank of England and the US Federal Reserve meet this week. US interest rate markets indicate no likelihood of a cut. In contrast UK overnight interest swap trading shows opinion evenly divided between a 0.25% reduction and no change. The US dollar index is holding higher ground, but the British pound is hovering just above the important $1.30 level. A rate cut could see sterling plunge.

January PMI data on Friday from China could also influence trading.

Asia Pacific share futures rose overnight. Both the Nikkei and Australia 200 indices are tipped to open around 0.5% higher. Australian CPI data is due later this morning. Forecasts for the core median and mean readings are 1.5% and 1.2% respectively, and any deviation from the forecast will speak directly to next week’s interest rate decision from the Reserve Bank of Australia.