GLOBAL MARKETS-Fear of coronavirus second wave stalks stock markets

* Equities held hostage by coronavirus
* Treasuries eye Powell speech
* Oil falls
* World FX rates in 2020 http://tmsnrt.rs/2egbfVh

By Tom Arnold and Stanley White
LONDON/TOKYO, May 13 (Reuters) - Global stocks and oil
prices fell on Wednesday as fears about a second wave of
coronavirus infections gripped financial markets.
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 index of global shares .MIWD00000PUS was down 0.3%.
The pan-European STOXX 600 index .STOXX slipped 1.6%. Banks
acted as the drag after a number of negative updates.
Shares in Deutsche Bank DBKGn.DE fell 4.4% after it was
reported that top managers will waive one month of fixed pay in
an effort to cut costs, while fellow German lender Commerzbank
CBKG.DE and the Netherland's ABN Amro ABNd.AS slumped
following first quarter losses. "Earning season is largely behind us and we have entered the
phase two of COVID-19 as deconfinement of economies begins, and
that is creating a lot of uncertainties on a daily basis, which
is weighing on markets," said Francois Savary, chief investment
officer at Swiss wealth manager Prime Partners.
"We don't think this is the start of a new correction.
Markets went too far, too fast and this is the consolidation."
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS erased an early decline and rose 0.3%. U.S.
stock futures, the S&P 500 e-minis ESc1 , reversed earlier
gains to fall 0.2%.
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. 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 hammered 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 mood was further soured by proposed legislation by 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 coronavirus outbreak.
Stock markets have rebounded sharply in recent weeks as the
spread of the novel coronavirus slowed in some countries in Asia
and Europe, while parts of the U.S. economy and Europe began to
reopen after weeks of lockdowns. However, some investors 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
traded at 0.6606%. The two-year yield US2YT=RR stood at
0.1629%, above a record low of 0.1050% hit on Friday.
In Europe, the German 10-year government bond yield, which
had risen around 8 basis points since May 4, changed direction
and fell around 3 bps as demand for the safe debt increased
DE10YT=RR .
The Italian 10-year government bond yield, which is the
proxy for riskier peripheral European bonds, rose 2 bps
IT10YT=RR . 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.
Oil futures fell as worries about the virus overcame hope
that output cuts would put a floor under prices. U.S. crude
CLc1 fell 1.6% to $25.36 a barrel. Brent crude LCOc1 fell 2.6%
to $29.19 per barrel.

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Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
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(Editing by Peter Graff)