* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* Stocks try to steady after punishing week
* Massive fiscal and monetary stimulus offers lifeline
* Dollar surges on rush to safety, strains $ borrowers
* Oil firms after biggest daily rally on record
By Wayne Cole
SYDNEY, March 20 (Reuters) - Asian shares sought a reprieve
on Friday as Wall Street eked out gains, bonds rallied and oil
boasted its biggest bounce on record, though a panicked rush
into U.S. dollars suggested the crisis was far from done.
As the spread of the coronavirus brought much of the world
to a halt, nations have poured ever-more-massive amounts of
stimulus into their economies while central banks have showered
markets with cheap dollars to ease funding strains. Sources told Reuters China was set to unleash trillions of
yuan of fiscal stimulus to revive an economy facing its first
contraction in four decades. "The speed and aggression with which authorities are
wheeling out measures to cushion the economic fallout from the
virus and sewing the seeds for a hopefully rapid recovery, has
resonated somewhat in equity markets," said Ray Attrill, head of
FX strategy at NAB.
"Yet there is little doubt that funds need to buy dollars to
rebalance hedges in light of the 30% fall in equity markets so
far this month," he added. "The dollar remains the pre-eminent
safe-haven asset during time of extreme market stress."
The dollar's surge is a nightmare for the many countries and
companies that have borrowed heavily in the dollar, leading to
yet more selling of emerging market currencies in a negative
feedback loop.
Such was the stress that dealers hear whispers of a new
Plaza Accord, the 1985 agreement when major central banks used
mass intervention to restrain a rampant dollar.
For now, investors in Asia were merely happy Wall Street had
not plunged again and South Korean shares .KS11 bounced 2.6%,
though that still left them down 15% for the week.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS firmed 0.6%, while Australia's beleaguered
market .AXJO rose 2.9%. Japan's Nikkei .N225 went the other
way and dipped 1%.
Gains in tech stocks had helped the Dow .DJI rise 0.95% on
Thursday, while the S&P 500 .SPX gained 0.47% and the Nasdaq
.IXIC 2.3%.
However, E-Mini futures for the S&P 500 ESc1 slipped 1.7%
in early Asian trade on Friday, a pattern of weakness seen every
day this week.
OIL RALLIES
Aiding sentiment was a 25% rally in oil prices overnight.
U.S. crude CLc1 added another 53 cents to $26.44 a barrel on
Friday, up from a low of $20.09, while Brent crude LCOc1 stood
at $28.46. O/R
This was a major relief as the collapse of crude prices had
blown a huge hole in the budgets of many oil producers and
forced them to dump any liquid asset to raise cash, with U.S.
Treasuries a particular casualty.
That was one reason yields on U.S. 10-year Treasuries
US10YT=RR had climbed over 100 basis points in just nine
sessions to reach 1.279%, before steadying a little at 1.15%.
At the same time, funds across the world were fleeing to the
liquidity of U.S. dollars, lifting it to peaks last seen in
January 2017 against a basket of its peers =USD .
"Such price action suggests significant market stress,
particularly on the wide range of entities outside the U.S. that
have borrowed in dollars," said Richard Franulovich, head of FX
strategy at Westpac.
"It could last until global capital flows and investor risk
appetite normalises, possibly months away."
The euro was down near three-year lows at $1.0660 EUR= ,
having shed 4% for the week so far - the steepest decline since
mid-2010. The dollar was also up 3.2% for the week at 111.33 yen
JPY= , the largest gain in more than three years.
Sterling sank to its lowest since 1985 after the Bank of
England surprised by cutting rates to 0.1%. The pound was last
at $1.1484 GBP= and down a staggering 6.5% for the week.
The jump in the dollar has made gold more expensive in other
currencies and pushed its price down 3.7% for the week to
$1,471.39 per ounce XAU= . GOL/
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Asia stock markets https://tmsnrt.rs/2zpUAr4
Asia-Pacific valuations https://tmsnrt.rs/2Dr2BQA
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Editing by Sam Holmes)