GLOBAL MARKETS-Asian shares nudge up as virus spread slows, euro fragile

* Asian stock markets: https://tmsnrt.rs/2zpUAr4
* Tracking the coronavirus: https://tmsnrt.rs/3aIRuz7
* Sentiment remains fragile due to worries about virus
* 3-mo/10-yr Treasury yield curve inverts
* Weak German data pummels euro

By Stanley White
TOKYO, Feb 19 (Reuters) - Asian shares and U.S. stock
futures edged cautiously higher on Wednesday, as investors tried
to shake off worries about the coronavirus epidemic after a
slight decline in the number of new cases.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS eked out a minor 0.03% gain but spent much of
the morning session bouncing between gains and losses.
Chinese shares .CSI300 erased early declines to trade
0.15% higher. Australian shares .AXJO were up 0.02%, while
Japan's Nikkei stock index .N225 rose 0.5%.
The euro languished at a three-year low versus the dollar as
disappointing data from Germany, Europe's largest economy, has
stoked fears that the euro zone is more vulnerable to external
shocks than previously thought.
The Treasury curve remained inverted on Wednesday as yields
on three-month bills traded above yields on 10-year notes in a
sign that some investors remain cautious about the outlook.
China, the world's second-largest economy, is still
struggling to get its manufacturing sector back online after
imposing severe travel restrictions to contain a virus that
emerged in the central Chinese province of Hubei late last year.
Many investors view Chinese data on the virus, dubbed
SARS-CoV-2, with a great deal of scepticism, but there are hopes
that officials will roll out more stimulus to support the
world's second-largest economy.
"Part of the thinking that is supporting markets is the
actions that China takes to support its economy," said Michael
McCarthy, chief market strategist at CMC Markets in Sydney. "Any
investor concern around impact on demand globally from the virus
will be offset by expectations that global central banks will
ride to the rescue."
U.S. stock futures ESc1 rose 0.18% in Asia on Wednesday.
The S&P 500 .SPX fell 0.29% on Tuesday after Apple Inc
AAPL.O said it would miss sales targets because the virus in
China is pressuring its supply chain. Mainland China had 1,749 new confirmed cases of coronavirus
infections on Tuesday, the country's National Health Commission
said on Wednesday, down from 1,886 cases a day earlier and the
lowest since Jan. 29. The death toll in China has topped more than 2,000 from the
flu-like illness which has already spread to 24 other countries.
The People's Bank of China cut the interest rate on its
medium-term lending on Monday, which is expected to pave the way
for a reduction in the country's benchmark loan prime rate on
Thursday, as policymakers try to ease financial strains caused
by the virus. In the currency market, the euro EUR=EBS was quoted at
$1.0804. The common currency managed to reclaim the
closely-watched $1.08 level which it broke through on Wednesday
but was still close to its lowest since April 2017.
Sentiment remained weak after a survey showed a sharp
deterioration in German investor sentiment due to the
coronavirus. In the onshore market, the yuan CNY=CFXS briefly fell to a
two-week low of 7.0136 per dollar as traders continued to ponder
the economic impact of the virus and the chance for more
monetary easing.
The yield on three-month Treasury bills US3MT=RR stood at
1.5770% in Asia on Wednesday, above the 10-year Treasury yield
US10YT=RR of 1.5610%.
A yield curve inverts when short-term yields trade above
long-term yields and is often considered a sign of recession in
the next year or two.
U.S. crude CLc1 rose 0.21% to $52.16 a barrel, while Brent
crude LCOc1 rose 0.12% to $57.87 per barrel as a reduction in
supply from Libya offset concerns about weaker Chinese demand
for commodities.
Expectations that the Organization of the Petroleum
Exporting Countries (OPEC) and allied producers including Russia
will cut output further should lend support to prices.
The group, known as OPEC+, will meet in Vienna on March 6.

(Editing by Jacqueline Wong)