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GLOBAL MARKETS-Asia shares under threat as futures fall early

Published 30/03/2020, 09:52 am
© Reuters.
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* Asian stock markets : https://tmsnrt.rs/2zpUAr4

* Futures for S&P 500, Nikkei fall in early trade

* Treasury yields fall further as central banks ease

* Dollar down for the moment, oil under pressure

By Wayne Cole

SYDNEY, March 30 (Reuters) - Asian share markets looked set for a rocky start on Monday as U.S. stock futures took an early spill amid fears the global shutdown for the coronavirus could last for months, doing untold harm to economies.

E-Mini futures for the S&P 500 ESc1 skidded 1.7% right from the bell, while Nikkei futures NKc1 pointed to an opening loss of around 500 points.

Central banks have mounted an all-out effort to bolster activity with rate cuts and massive asset-buying campaigns, which has at least eased liquidity strains in markets.

Canada's central bank on Friday surprised with an emergency rate cut to 0.25% and a program of quantitative easing, while New Zealand policy makers on Monday launched a loan program for corporates to meet liquidity needs. Catril, a senior FX strategist at NAB, said the main question for markets was whether all the stimulus would be enough to help the global economy withstand the shock.

"To answer this question, one needs to know the magnitude of the containment measures and for how long they will be implemented," he added.

"This is the big unknown and it suggests markets are likely to remain volatile until this uncertainty is resolved."

With that in mind, it was not encouraging that British authorities were warning lockdown measures could last months. President Donald Trump had talked about reopening the U.S. economy for Easter, on Sunday he extended guidelines for social restrictions to April 30 and said the peak of the death count from the respiratory disease could be two weeks away. investors looked to be bracing for a long haul with yields at the very short end of the curve turning negative and those on 10-year notes US10YT=RR dropping a steep 26 basis points last week to 0.67%.

Early on Monday, Treasury futures climbed anew and pointed to a fresh fall in yields.

That drop has combined with efforts by the Federal Reserve to pump more U.S. dollars into markets, and dragged the currency off recent highs.

Indeed, the dollar =USD suffered its biggest weekly decline in more than a decade last week. USD/

Against the yen, the dollar was pinned at 107.80 JPY= , well off the recent high at 111.71. The euro was firm at $1.1118 EUR= after rallying more than 4% last week.

The retreat in the dollar proved a fillip for gold, which was up 0.4% on Monday at $1,625.18 an ounce XAU= . GOL/

It has been little help for oil as Saudi Arabia and Russia show no signs of backing down in their price war. O/R

Brent crude LCOc1 futures lost 89 cents to $24.04 a barrel, while U.S. crude CLc1 fell 96 cents to $20.55.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Asia stock markets

https://tmsnrt.rs/2zpUAr4 Asia-Pacific valuations

https://tmsnrt.rs/2Dr2BQA

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