| Welcome to your morning markets update, delivered every weekday before the European open. Good morning. China is making further moves to support its economy, the U.K. and Europe are firing broadsides at each other before trade talks start and oil is benefiting from supply concerns. Here's what's moving markets. China Support Stocks in Asia were given a boost following a report that China is considering direct cash injections and mergers to bail out its airline industry, which has been clobbered by the mass grounding of planes and travel restrictions caused by the coronavirus outbreak. European and U.S. equity futures also rallied on the news, which increases optimism that Chinese authorities will follow through on promises to fix the parts of its economy hit most heavily by the virus. The death toll from the virus has now passed 2,000 in China though Hubei, the province at the center of the storm, reported the lowest number of new cases since the counting methods were changed last week. Rally Tested The revenue warning from Apple Inc., which shook equities the world over, will provide a test of how resilient the rally in risk assets seen so far this year will prove to be. Analysts covering the company think it will prove a short-term blip but the anxiety about how significant the economic impact of the coronavirus outbreak will be is clearly growing and warning signs are even appearing in how bullish options traders are being. Gold is trading near the highest since 2013 on the worries about growth. Or, it could be that the economic hit from coronavirus is all in the mind. More Broadsides The next stage of the U.K.'s departure from the European Union seems to have got off to a contentious start. After the U.K's top negotiator fired a broadside at the EU over its position on trade talks, the EU retaliated by saying that the blame for any damage Brexit does to the British economy will lie squarely at the door of Prime Minister Boris Johnson and his government. The Elgin Marbles have even been mentioned. And all as Johnson deals with demands from Conservative Party colleagues to rein in his top adviser, Dominic Cummings, amid an escalating battle over allegations of racism. Supply Risks Oil prices bounced again and Brent is on track for its longest run of gains in more than a year as supply risks outweigh any concerns about demand from China. The U.S. placed sanctions on a unit of Russian oil giant Rosneft PJSC over ties it has maintained with Venezuela's president and its state oil company, a move that could harm the Russian group's ability to export crude. Added to this, fighters in Libya shelled Tripoli's port, halting shipping and causing a suspension of ongoing cease-fire talks. The potential supply disruptions should go some way to offsetting any demand dip related to coronavirus shutdowns, particularly as moves are made by China to shore up its economy. Coming Up… The minutes from the Federal Reserve's latest meeting will be published after the European close and there will be a host of Fed policymakers speaking ahead of that. Beforehand, there will be data on U.K. inflation and European construction activity. The earnings day is topped by Germany's Deutsche Telekom AG and we'll have an update from sportswear group Puma SE, another of the sectors where any update on the coronavirus impact will be closely watched. What We've Been Reading This is what's caught our eye over the past 24 hours. And finally, here's what Cormac Mullen is interested in this morning It seems investors are switching their focus from China to Japan, turning their backs on one of Asia's most prominent investment themes in 2019 — the comeback in Japanese equities. The country has become the worst-performing major stock market in the region since the coronavirus first spooked traders in January, with losses through Tuesday eclipsing even those seen in China, the origin of the outbreak. The benchmark Topix index lost 4.5% from Jan. 20 through Feb. 18, compared with a 3.6% decline in the Shanghai Composite Index and 4.4% decline in the Hang Seng. The coronavirus is pummeling an economy already under pressure from a sales-tax hike, with most economists seeing the outbreak pushing Japan into a recession, according to a Bloomberg survey. Its immediate impact has been to stop hundreds of thousands of Chinese visitors to Japan, the biggest source of tourist income. Meanwhile, Japanese exporters are at risk, as the outbreak disrupts production and domestic demand in the country's biggest trading partner. At home, a hoped-for rebound in consumer spending is under threat, should residents curtail their movements because of the virus. Still, with Japanese equity valuations falling back below their five-year average, the question is whether this dip turns out to be a buying opportunity. The Topix rose as much as 0.7% Wednesday, snapping a seven-day streak of declines, and many market strategists suggest any correction will be temporary.  Cormac Mullen is a cross-asset reporter and editor for Bloomberg News in Tokyo Like Bloomberg's Five Things? Subscribe for unlimited access to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. | 
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