GLOBAL MARKETS-Asian markets extend falls as coronavirus spreads

* Australia, Japan fall, U.S. stock futures drop 1%
* Interbank futures imply rate cuts by Fed, RBA
* Stocks had worst week since 2008
* Asian stock markets: https://tmsnrt.rs/2zpUAr4

By Tom Westbrook
SINGAPORE, March 2 (Reuters) - The rout in world stocks
deepened on Monday, with investors rattled by weekend data from
China that showed its fastest ever contraction in factory
activity, raising fears of a global recession from the
coronavirus.
Pandemic fears pushed markets off a precipice last week,
wiping more than $5 trillion from global share value as stocks
posted their steepest slump in more than a decade.
The sheer scale of losses has prompted financial markets to
price in policy responses from the U.S. Federal Reserve to the
Bank of Japan and the Reserve Bank of Australia. Futures now imply a full 50 basis point cut by the Fed in
March 0#FF: while Australian markets are pricing in a
quarter-point cut at the RBA's Tuesday meeting. 0#YIB
In equities, e-minis for the S&P500 ESc1 declined more
than 1%. MSCI's broadest index of Asia-Pacific shares outside
Japan .MIAPJ0000PUS fell 0.3%. Japan's Nikkei .N225 opened 1.3% lower at a six month
trough. Australia's S&P ASX/200 .AXJO fell 3% and New
Zealand's NZ50 .NZ50 slid 3% into correction territory.
Benchmark U.S. 10-Year Treasuries hit a fresh record low of
1.0750% US10YT=RR .
"There had been a lot of hope that today's market might open
somewhat positive given the finish to the U.S. market," said Jun
Bei Liu, portfolio manager at Tribeca Investment Partners in
Sydney, referring to Friday's late climb from intraday lows on
Wall Street.
"But the China PMI was significantly weaker than expected,
and so we're seeing the continuation of the sell off," she said.
"Right now the problem is (the virus) is growing
exponentially (beyond China), as an equity investor we're just
not sure of what the ultimate demand impact is."
Leaders in Europe, the Middle East and the Americas rolled
out bans on big gatherings and stricter travel restrictions over
the weekend as cases of the new coronavirus spread. The epidemic, which began in China, has killed almost 3,000
people worldwide as authorities race to contain infections in
Iran, Italy, South Korea and the United States.
China on Saturday reported its fastest ever contraction in
factory activity. "It is now highly probable that the coronavirus will spread
globally," Citi analysts said in a note
"Financial markets may over-react until they have visibility
on the actual impact."
Investor panic last week sent bonds soaring and stocks
plunging. The S&P 500 index .SPX fell 11.5%, only its fifth
double-digit weekly percentage drop since 1940. .N
Oil prices dropped to their lowest in more than a year and
even gold plunged as holders liquidated what they could to cover
margin calls on riskier investments. GOLD/
On Monday, oil extended losses before steadying on
expectations OPEC may cut production. O/R
Brent crude last traded at $49.72 per barrel LCOc1 and
U.S. crude CLc1 at $44.89 per barrel.
In currencies, investors sought shelter in the Japanese yen,
which jumped to a 20-week high on the dollar in tandem with the
massive shift in money markets to price U.S. rate cuts. FRX/
All of this leaves just about every major asset class on
edge and few analysts sounding optimistic.
"So it was right not to 'buy the dip,'" said Michael Every,
Rabobank's senior strategist for the Asia-Pacific.
The yen was last up 0.3% at 107.74.
The Aussie AUD=D3 huddled near an 11-year low at $0.6551,
while the New Zealand dollar NZD=D3 slid 0.3% to $6225.
The euro EUR=D3 was up 0.3% at $1.1054.
That left the dollar index =USD steady at 97.957.
China's Caixin Purchasing Managers Index (PMI), due at 0145
GMT, and PMI figures from around the world due later on Monday
will add more detail to the picture of economic pain.
Later in the week, central bank meetings in Australia, on
Tuesday, and Canada, on Wednesday, will be closely watched.