* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* S&P 500 futures rally 2.4%, Treasury yields up sharply
* Asia shares edge higher, Nikkei pares early losses
* Oil prices bounce after huge drop
* Markets cling to hope of monetary, fiscal stimulus
By Wayne Cole
SYDNEY, March 10 (Reuters) - Asian shares bounced and bond
yields rose from historic lows on Tuesday as speculation of
coordinated stimulus from global central banks and governments
calmed panic selling.
Yields on benchmark U.S. 10-year Treasury debt doubled to
0.68% and oil prices rallied more than 6%, offering hope that
markets had found a floor, even just fleetingly.
"Talk of coordinated fiscal and monetary support is getting
louder," said Rodrigo Catril, a senior FX strategist at National
Australia Bank, noting U.S. President Donald Trump was promising
"major" steps to support the economy. Trump plans a news conference later on Tuesday to lay out
proposed measures and dealers reported rumours Treasury
Secretary Steve Mnuchin was pushing for radical action.
Investors seemed to take heart with E-Mini futures for the
S&P 500 ESc1 rallying 2.4% after an early slide. EUROSTOXX 50
futures STXEc1 also rose 1.7%.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS edged up 0.4%, having shed more than 5% on
Monday. Australia .AXJO rose 1.9% as some went hunting for
bargains in beaten down stocks. Japan's Nikkei .N225 eased
0.4%, but was well above early lows. .T
Wall Street had been on the brink of a bear market with all
the major indices down almost 20% from their all-time peak,
which amazingly were touched just 13 sessions ago.
The Dow .DJI fell an eye-watering 7.79%, while the S&P 500
.SPX lost 7.60% and the Nasdaq .IXIC 7.29%.
Energy stocks had led the losses as markets braced for a
price war between Saudi Arabia and Russia. O/R
A steadier tone on Tuesday saw Brent crude futures LCOc1
add $2.22 to $36.58 a barrel, while U.S. crude CLc1 bounced
$1.66 to $32.79.
Yet headlines on the coronavirus were still no brighter with
Italy ordering everyone across the country not to move around
other than for work and emergencies, while banning all public
gatherings. "Although uncertainty is very high, we now expect similar
restrictions will be put in place across Europe in the coming
weeks," warned economists at JPMorgan.
"We are now expecting a rolling 1H20 global growth
contraction and a powerful global disinflationary wave to take
hold," they added. "We expect the Fed to cut to zero at or
before its March 18 meeting."
ONUS ON CENTRAL BANKS
Such has been the conflagration of market wealth, that
analysts assumed policy makers would have to react aggressively
to prevent a self-fulfilling economic crisis.
The U.S. Federal Reserve on Monday sharply stepped up the
size of its fund injections into markets to head off stress.
Having delivered an emergency rate cut only last week,
investors are 0#FF: fully pricing an easing of at least 75
basis points at the next Fed meeting on March 18, while a cut to
near zero was now seen as likely by April.
Britain's finance minister is due to deliver his annual
budget on Wednesday and there is much talk of coordinated
stimulus with the Bank of England. The European Central Bank meets on Thursday and will be
under intense pressure to act, even though rates there are
already deeply negative. "Italy's decision to quarantine the whole country will
affect 15% of Europe's GDP, putting thee ECB at the forefront of
efforts to cushion the escalating economic deterioration," said
Brian Martin, a senior international economist at ANZ.
"We expect interest rates to be cut, forward guidance to be
enhanced and emergency liquidity measures aimed at supporting
SMEs and supply-chain finance to be implemented."
Bonds had charged ahead of the central banks to essentially
price in a global recession of unknown length.
Yields on 10-year U.S. Treasuries US10YT=RR reached as low
as 0.318% on Monday - a level unthinkable just a week ago - but
rose back to 0.68% on Tuesday amid the stimulus chatter.
That in turn helped the dollar recoup some of its recent
hefty losses to reach 103.54 yen JPY= , edging away from
Monday's three-year trough around 101.17.
The euro eased back to $1.1388 EUR= , after climbing 1.4%
on Monday to the highest in over 13 months at $1.1492.
Gold was restrained to $1,667.38 per ounce XAU= amid talk
some investors were having to sell to raise cash to cover margin
calls in stocks and other assets. GOL/
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(Editing by Stephen Coates & Shri Navaratnam)