GLOBAL MARKETS-Asia shares dive with S&P 500, bond yields fall anew

* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* S&P 500 futures off 5%, hit limit down
* Asian shares under water, oil falls again
* US 10-year bond yield drops to 0.80%
* More countries shut businesses, tell people to stay home

By Wayne Cole
SYDNEY, March 23 (Reuters) - Asian shares slid on Monday as
more countries all but shut down in the fight against the
coronavirus, threatening to overwhelm policymakers' frantic
efforts to cushion what is clear to be a deep global recession.
In a taste of the pain to come, E-Mini futures for the S&P
500 ESc1 dived 5% at the open to be limit down.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS lost 2%, with South Korea .KS11 badly hit.
Japan's Nikkei .N225 added 0.8%, perhaps aided by
expectations of more asset buying by the Bank of Japan, but the
commodity-heavy Australian market .AXJO shed 5%.
Oil was not far behind as mass bans on travel worldwide
crushed demand for fuel.
Airlines cancelled more flights as Australia and New Zealand
advised against non-essential domestic travel, the United Arab
Emirates (UAE) halted flights for two weeks and Singapore and
Taiwan banned foreign transit passengers. Brent crude LCOc1 futures slid $1.68 to $25.30 a barrel,
while U.S. crude CLc1 shed $1.01 to $21.62. O/R
Analysts fear the collapse in oil and other commodity prices
will set off a deflationary wave making it harder for monetary
policy easing to gain traction as economies shut down.
Nearly one in three Americans were ordered to stay home on
Sunday to slow the spread of the disease, while Italy banned
internal travel as deaths there reached 5,476. U.S. President Donald Trump went on TV to approve disaster
deceleration requests from New York and Washington, while St.
Louis Federal Reserve President James Bullard warned
unemployment could reach 30% unless more was done fiscally.

U.S. stocks have already fallen more than 30% from their
mid-February and even the safest areas of the bond market
experiencing liquidity stress as distressed funds are forced to
sell good assets to cover positions gone bad.

WAITING ON THE DISEASE
"It would be a brave, or foolish, man to call the bottom in
equities without a dramatic medical breakthrough," said Alan
Ruskin, head of G10 FX strategy at Deutsche Bank.
Also needed would be evidence that China could re-emerge
from the virus without reigniting infections, and that other
major economies had hit inflection points for infection rates,
he added.
"Even were social distancing to subside at the earliest
plausible dates in Europe and the U.S., it will have done
extraordinary damage to confidence in a host of key sectors,"
Ruskin said.
The mounting economic toll led to a major rally in sovereign
bonds late last week, with efforts by central banks to restore
liquidity in the market allowing for more two-way trade.
Yields on the benchmark U.S. 10-year note US10YT=RR were
down at 0.80%, having dived all the way to 0.84% on Friday from
a top of 1.28%.
In New Zealand, the central bank announced its first
outright purchase of government paper aiming to inject
much-needed liquidity into the local market. In currency markets, the first instinct on Monday was to
dump those leveraged to global growth and commodity prices,
sending the Australian dollar down 0.8% to $0.5749 AUD=D3 .
The U.S. dollar started firm but took a step back after
partisan battles in the U.S. Senate stopped a coronavirus
response bill from advancing. The dollar eased 0.4% to 110.43 yen JPY= , while the euro
recouped losses to be flat at $1.0692 EUR= .
Against a basket of currencies the dollar was still a
fraction firmer at 102.510. =USD
The dollar was a major gainer last week as investors fled to
the liquidity of the world's reserve currency, while some funds,
companies and countries sought more cash to cover their dollar
borrowings.
"The ‘dash for cash' will remain a key driver of currency
markets this week," said Kim Mundy, a currency strategist at
CBA.
"We expect strong USD demand to continue to cause liquidity
problems and keep volatility elevated. Direct intervention by
central banks in currency markets to reduce market dysfunction
is possible."
The steady rise in the dollar undermined gold, which slipped
0.3% to $1,493.83 per ounce XAU= . GOL/

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(Editing by Sam Holmes)