* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* S&P 500 futures rally more than 3%, Treasury yields up
sharply
* Asia shares jump 1%, Nikkei pares early losses to end up
0.9%
* Oil prices bounce after huge drop; gold prices fall 1%
* Markets cling to hope of monetary, fiscal stimulus
By Wayne Cole and Sumeet Chatterjee
SYDNEY/HONG KONG, March 10 (Reuters) - Asian stocks bounced,
and bond yields rose from record lows on Tuesday on hopes that
global policymakers would introduce co-ordinated stimulus to
cushion the economic impact of a coronavirus outbreak.
U.S. and European markets were expected to follow the Asian
lead with major stock futures trading up more than 2%.
Oil similarly clawed back some of its massive losses from
Monday, rallying 7% and offering hope that markets had found a
floor, although sentiment was still fragile a day after prices
plunged.
Yields on benchmark U.S. 10-year Treasury debt more than
doubled to 0.70% as investors pared some of their heavy
safe-haven holdings.
Supporting the mood was a pledge from President Donald Trump
on Monday to take "major" steps to protect the economy and float
the idea of a payroll tax cut with congressional
Republicans. "Talk of coordinated fiscal and monetary support is getting
louder," said Rodrigo Catril, a senior FX strategist at National
Australia Bank.
U.S. stock futures, the S&P 500 e-minis ESc1 , were up
3.43% at 2,842.
In early European trades, the pan-region Euro Stoxx 50
futures STXEc1 were up 2.72% at 3,056, German DAX futures
FDXc1 were up 2.41% at 10,943.5, FTSE futures FFIc1 were up
3.14% at 6,178.5.
The gains in the U.S. and European futures come on the back
of a 1.36% rise in MSCI's broadest index of Asia-Pacific shares
outside Japan .MIAPJ0000PUS , having dropped more than 5% on
Monday.
Despite the bounce, analysts warned it was too early to call
a trough in equity markets.
"In fact, very high volatility in equities will persist in
the coming weeks as the viral outbreak accelerates outside of
China and policy makers race to find a concerted response to get
ahead of the curve in markets," Michael Strobaek, global chief
investment officer at Credit Suisse, wrote in a research note.
ASIAN GAINS
Japan's Nikkei .N225 ended the day up 0.85%, after
touching its lowest level since April 2017 earlier in the day.
Japan will unveil a second stimulus package later on Tuesday to
offset the impact of the outbreak. .T
Australia .AXJO closed up 3.1% as some went hunting for
bargains in beaten down stocks.
China's benchmark Shanghai Composite Index .SSEC was
trading up 1.7% as new domestic coronavirus cases tumbled and
President Xi Jinping's visit to the epicentre of the epidemic
lifted sentiment.
Headlines on the coronavirus, however, 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."
Benchmarks Brent crude futures LCOc1 and U.S. West Texas
Intermediate (WTI) crude CLc1 bounced back after having
recorded their biggest one-day percentage declines since January
1991 on Monday. O/R
Gold prices fell 1%, retreating from the last session's jump
above the key $1,700 level, as safe-haven demand waned a little
amid speculation of global stimulation measures. GOL/
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 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. 0#FF:
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.
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 be last at 0.6818% on Tuesday amid the stimulus
chatter.
That in turn helped the dollar recoup some of its recent
hefty losses to reach 104.70 yen JPY= , edging away from
Monday's three-year trough around 101.17.
The euro eased back to $1.1351 EUR= , after climbing 1.4%
on Monday to the highest in over 13 months at $1.1492.
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Asia stock markets https://tmsnrt.rs/2zpUAr4
Asia-Pacific valuations https://tmsnrt.rs/2Dr2BQA
Plunging oil, coronavirus stoke credit concerns https://tmsnrt.rs/2TBKldj
The U.S. dollar and 10-Year U.S real yields https://tmsnrt.rs/32WoiRq
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