GLOBAL MARKETS-Stocks plunge as Fed's emergency rate cut fails to calm panic

* Fed cuts rates to 0-0.25%
* Dollar drops 2% vs yen
* Australian market down 7%, Nikkei futures sliding
* Asian stock markets : https://tmsnrt.rs/2zpUAr4

By Wayne Cole
SYDNEY, March 16 (Reuters) - Stock markets and the dollar
fell heavily on Monday, after emergency rate cuts in the United
States and New Zealand failed to allay fears about the
coronavirus' economic shock.
U.S. stock futures hit their downlimit before daybreak in
Singapore. The dollar sank more than 2% against the yen. FRX/
Nikkei futures NKc1 fell 6%. Australia's benchmark stock
index fell 7% in the first quarter-hour of trade. U.S. crude
fell 5% to under $30 per barrel.
The U.S. Federal Reserve cut interest rates by 100 basis
points on Sunday to a target range of 0% to 0.25%. It said it
would expand its balance sheet by at least $700 billion in
coming weeks. "(The) market is wondering what the Fed knows that the rest
of us don't," said Phil Orlando, chief equity market strategist
at Federated Hermes in New York.
"Is COVID-19 an even bigger deal than we think?"
New Zealand's central bank also slashed interest rates by 75
basis points, sinking the country's currency, as it prepared for
a "significant" hit to the economy.
U.S. Treasuries futures TYv1 jumped more than a full
point.
E-mini futures for the S&P 500 index ESc1 dropped 4.77% to
their daily trading limit outside the United States.
Lockdowns and travel bans spread across the globe over the
weekend, affecting tens of millions of people. "(The Fed) must really be scared. To do that in one fell
swoop is really quite shocking," said Robert Pavlik, chief
investment strategist at Slatestone Wealth LLC in New York.
"They pulled out whatever weapons they had and my sense is I
think it may help initially but I don't think it goes much
further because this is still a developing issue. They used up
basically all their ammunition and we're down to sticks and
stones."
Five other central banks also cut pricing on their swap
lines to make it easier to provide dollars to their financial
institutions facing stress in credit markets. The swap lines were set up by the Fed, the Bank of Canada,
European Central Bank, Bank of England, Bank of Japan and Swiss
National Bank in the financial crisis. They also agreed to offer
three-month credit in U.S. dollars on a regular basis and at a
rate cheaper than usual.
The move was designed to bring down the price banks and
companies pay to access U.S. dollars, which has surged in recent
weeks as the pandemic spooked investors.
U.S. President Donald Trump called the move "terrific" and
"very good news." Along with the New Zealand cut, and Australia's central bank
poured $3.6 billion in liquidity into Australia's financial
system. "Central banks around the world continue to react with
emergency interest rate cuts to assist with the shock to demand
arising from the spread of the COVID-19 virus, with necessary
public health containment efforts coming at a substantial
economic cost," NAB chief economist Alan Oster.
"Central banks are also appropriately providing additional
liquidity to financial systems."
In currency markets, the dollar dropped 1.7% on the Japanese
yen to 106.01 JPY= , while the euro climbed 0.5% to $1.1168.
The risk-sensitive Australian dollar fell 0.25% to $0.6182
AUD=D4 while the New Zealand dollar NZD=D4 slipped 0.1% to
$0.6048. Oil prices fell about 5% and gold rose.
Brent crude LCOc1 dropped $1.80 to $32.03 per barrel. O/R

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