GLOBAL MARKETS-Asia stocks set to rally as Fed goes limitless

* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* S&P 500 futures bounce in Asia, Nikkei futures jump
* Investors relieved as Fed pledge eases bond market stress
* Treasury yields fall, drag down yields globally
* Dollar off its peaks, supported by liquidity flows

By Wayne Cole
SYDNEY, March 24 (Reuters) - Asian stocks were set to rally
on Tuesday as the U.S. Federal Reserve's sweeping pledge to
spend whatever it took to stabilise the financial system eased
debt market pressures, even if it could not offset the immediate
economic hit of the coronavirus.
While Wall Street still finished lower, investors in Asia
were encouraged enough to lift E-Mini futures for the S&P 500
ESc1 by 2%.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS added 0.5% in early trade, while Nikkei futures
NKc1 traded at 18,115 compared to a cash close of 16,887.
In its latest drastic step, the Fed offered to buy unlimited
amounts of assets to steady markets and expanded its mandate to
corporate and muni bonds. The numbers were certainly large, with analysts estimating
the package could make $4 trillion or more in loans to
non-financial firms.
"This open-ended and massively stepped-up programme of QE is
a very clear signal that the Fed will do all that is needed to
maintain the integrity and liquidity of the Treasury market, key
asset-backed markets and other core markets," said David de
Garis, a director of economics at NAB.
"COVID-19 developments remain the wild card, as is the
development of government policies to support cash flow and the
economy."
The Fed's package helped calm nerves in bond markets where
yields on two-year Treasuries hit their lowest sine 2013, while
10-year yields dropped back sharply to 0.77% US10YT=RR .
Yet analysts fear it will do little to offset the near-term
economic damage done by mass lockdowns and layoffs.
Speculation is mounting data due on Thursday will show U.S.
jobless claims rose an eye-watering 1 million last week, with
forecasts ranging as high as 4 million.
Goldman Sachs warned the U.S. economic growth could contract
by 24% in the second quarter, two-and-a-half times as large as
the previous postwar record.
A range of flash surveys on European and U.S. manufacturing
for March are due later on Tuesday and are expected to show deep
declines into recessionary territory.
While governments around the globe are launching ever-larger
fiscal stimulus packages, the latest U.S. effort remains stalled
in the Senate as Democrats said it contained too little money
for hospitals and not enough limits on funds for big business.
The logjam combined with the stimulus splash from the Fed to
take a little of the shine off the U.S. dollar, though it
remains in demand as a global store of liquidity.
"The special role of the USD in the world's financial system
– it is used globally in a range of transactions such as
commodity pricing, bond issuance and international bank lending
– means USD liquidity is at a premium," said CBA economist
Joseph Capurso.
"While liquidity is an issue, the USD will remain strong."
The dollar eased just a touch on the yen to 110.90 JPY=
after hitting a one-month top at 111.59 on Monday, while the
euro inched up to $1.0756 EUR= from a three-year trough of
$1.0635.
The dollar index dipped 0.3% to 102.140 =USD .
Gold surged in the wake of the Fed's promise of yet more
cheap money, and was last at $1,564.51 per ounce XAU= having
rallied from a low of $1,484.65 on Monday. GOL/
Oil prices also bounced a little after recent savage losses,
with U.S. crude CLc1 up $1.16 at $24.52 barrel. O/R

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(Editing by Sam Holmes)