GLOBAL MARKETS-Asian shares rebound as some traders temper pessimism

* Equities held hostage by coronavirus
* Treasuries eye Powell speech
* Oil futures falter in Asia

By Stanley White and Suzanne Barlyn
TOKYO/NEW YORK, May 13 (Reuters) - Asian shares recovered
early losses and crept into positive territory on Wednesday, but
stock futures pointed to a lower European open as worries about
a slow economic recovery from the coronavirus weighed on global
sentiment.
Investors, many facing steep losses due to the
pandemic-driven shakeout in assets over the past few months,
have also had to contend with renewed U.S.-China trade tensions.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS erased an early decline and rose 0.3%.
Shares in China .CSI300 , where the coronavirus first
emerged late last year, rose 0.2%. U.S. stock futures, the S&P
500 e-minis ESc1 , rose 0.4%.
Futures in Europe painted a more pessimistic picture. Euro
Stoxx 50 futures STXEc1 were down 1.32%, German DAX futures
FDXc1 lost 1.29%, and FTSE futures FFIc1 fell 1.01%
Oil markets, which have plummeted this year due to a
combination of a collapse in demand and a supply glut, lost
further ground.
Treasury yields also inched lower amid caution before a
speech by U.S. Federal Reserve Chairman Jerome Powell and rising
speculation the United States could one day adopt negative
interest rates. "A decrease in coronavirus cases was the major reason why
markets rallied from mid-April, but from here on stocks will
move in a broad range," said Masayuki Kichikawa, chief macro
strategist at Sumitomo Mitsui Asset Management Co. in Tokyo.
"The risk of a resurgence in infections will cap the upside,
but extremely easy monetary policy put in place so far will
limit the downside."
Leading U.S. infectious disease expert Anthony Fauci on
Tuesday warned lawmakers that a premature lifting of lockdowns
could lead to additional outbreaks of the deadly coronavirus,
which has killed 80,000 Americans and brought the economy to its
knees. Fauci's comments hit Wall Street stocks overnight,
underlining fragile investor sentiment, which has in recent
sessions swung between optimism over some easing in lockdowns
globally and anxiety about a fresh spike in virus cases.
The Dow Jones Industrial Average .DJI fell 1.89% on
Tuesday, the S&P 500 .SPX lost 2.05% and the Nasdaq Composite
.IXIC dropped 2.06%.
The mood was further soured by proposed legislation from a
leading U.S. Republican senator that would authorize President
Donald Trump to impose sanctions on China if it fails to give a
full account of events leading to the outbreak. Asian shares got off to a weak start, but sentiment
gradually improved as U.S. stock futures edged into the positive
territory.
South Korean shares .KS11 rose 0.7%. Australian shares
.AXJO also rose 0.4%, helped by gains in the healthcare
sector. Japan's Nikkei stock index .N225 bucked the trend and
fell 0.5%.
Stock markets have rebounded sharply in recent weeks as the
spread of the coronavirus slowed in some countries in Asia and
Europe, while parts of the U.S. economy began to reopen.
However, some investors still worry that a rush to re-open
factories and shops may be premature.
The New Zealand dollar NZD=D3 slumped to a six-month low
after the country's central bank doubled its quantitative easing
programme and said it has asked commercial banks to be ready for
negative interest rates by year's end. The U.S. dollar nursed losses as traders braced for Powell's
speech, which will cover economic issues and may offer hints on
whether negative rates are a viable policy option.
The yield on benchmark 10-year Treasury notes US10YT=RR
trimmed losses to trade at 0.6687%. The two-year yield
US2YT=RR stood at 0.1649%, above a record low of 0.1050% hit
on Friday.
Trump on Tuesday again pushed the Fed to adopt negative
rates, a hot topic in financial markets since last week when
U.S. money markets started to price in a chance of rates below
zero.
U.S. consumer prices dropped 0.8% in April, the biggest
decline since the global financial crisis.
Oil futures fell in Asia as worries about the virus overcame
hope that output cuts would put a floor under prices.
U.S. crude CLc1 fell 0.74% to $25.59 a barrel. Brent crude
LCOc1 fell 1.9% to $29.41 per barrel.

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