Gold prices edge lower; heading for weekly losses ahead of U.S.-Russia talks
* Japanese shares, U.S. stock futures reverse losses
* Interbank futures imply rate cuts by Fed, RBA
* Stocks had worst week since 2008
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
By Tom Westbrook and Swati Pandey
SINGAPORE, March 2 (Reuters) - Asian shares steadied from
early losses on Monday as investors placed their hopes on a
coordinated global monetary policy response to weather the
damaging economic impact of the coronavirus epidemic.
Pandemic fears pushed markets off a precipice last week,
wiping more than $5 trillion from global share value as stocks
cratered to their steepest slump in more than a decade.
The sheer scale of losses prompted financial markets to
price in policy responses from the U.S. Federal Reserve to the
Bank of Japan and the Reserve Bank of Australia. L4N2AU0ZB]
Futures now imply a full 50 basis point cut by the Fed in
March 0#FF: while Australian markets 0#YIB: are pricing in a
quarter-point cut at the RBA's Tuesday meeting.
Also helping calm market nerves, Bank of Japan Governor
Haruhiko Kuroda said on Monday the central bank would take
necessary steps to stabilise financial markets. [ In equities, Chinese shares opened higher with the
blue-chip index .CSI300 up 1.5%.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS advanced 0.4%, turning around from a loss of
about 0.3% earlier in the day. E-minis for the S&P500 ESc1 , which were down more than 1%
at one point, were last up 0.3% while Japan's Nikkei .N225 ,
which opened 1.3% lower at a six month trough, climbed 0.4%.
Australia's S&P ASX/200 .AXJO , which had tumbled 3%, was
last off 1.8%.
Benchmark U.S. 10-Year Treasuries hit a fresh record low of
1.0750% US10YT=RR .
Despite some stability in the market, analysts still expect
volatility to persist.
"Any signs that new cases are beginning to taper could be
seen as a positive catalyst for the market especially given that
some of the market complacency has reduced with equity
valuations much lower vs few weeks ago," Nomura analysts wrote
in a note.
"In the very near term until 1Q reporting results, we expect
Asian equities may remain quite volatile," they added.
"However, on a medium term basis we believe the risk-reward
is now getting favourable, assuming the virus does not take the
form of a virulent global pandemic."
Leaders in Europe, the Middle East and the Americas rolled
out bans on big gatherings and stricter travel restrictions over
the weekend as cases of the new coronavirus spread. The epidemic, which began in China, has killed almost 3,000
people worldwide as authorities race to contain infections in
Iran, Italy, South Korea and the United States.
Both official and private surveys, released on Saturday and
Monday respectively, showed China's factory activity collapsing
to its worst levels on record as the virus crippled broad areas
of the economy. "It is now highly probable that the coronavirus will spread
globally," Citi analysts said in a note.
"Financial markets may over-react until they have visibility
on the actual impact."
Investor panic last week sent bonds soaring and stocks
plunging. The S&P 500 index .SPX fell 11.5%, only its fifth
double-digit weekly percentage drop since 1940. .N
On Monday, oil extended losses before steadying on
expectations OPEC may cut production. O/R
Brent crude last traded at $50.41 per barrel LCOc1 and
U.S. crude CLc1 at $45.30 per barrel.
In currencies, investors sought shelter in the Japanese yen,
which jumped to a 20-week high on the dollar in tandem with the
massive shift in money markets to price U.S. rate cuts. FRX/
All of this leaves just about every major asset class on
edge and few analysts sounding optimistic.
"So it was right not to 'buy the dip,'" said Michael Every,
Rabobank's senior strategist for the Asia-Pacific.
The yen was last up 0.1% at 107.98.
The Aussie AUD=D3 huddled near an 11-year low at $0.6527,
while the New Zealand dollar NZD=D3 slipped 0.1% to $6238.
The euro EUR=D3 was up 0.3% at $1.1054.
That left the dollar index =USD a shade weaker at 97.911.
A further set of manufacturing surveys from around the world
due later on Monday will provide investors more detail on the
virus' impact on the global economy.
Later in the week, central bank meetings in Australia, on
Tuesday, and Canada, on Wednesday, will be closely watched.
(Editing by Sam Holmes & Shri Navaratnam)