(Adds U.S. market open, byline, dateline; previous LONDON)
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
* U.S., European shares tumble
* U.S. two-year, 10-year Treasuries hit record lows
* Dollar dips against yen, Swiss franc
By Herbert Lash
NEW YORK, March 6 (Reuters) - Yields on U.S. Treasuries
plunged to historic lows on Friday as fear the coronavirus
outbreak will slam the global economy drove investors to snap up
risk-adverse assets and dump equities, overshadowing data
highlighting a strong U.S. labor market.
The 10-year Treasury US10YT=RR yield fell to a record low
of 0.69% as new milestones were set across the U.S. bond market,
which this week has seen some of its biggest moves in years as
the pandemic rapidly spreads outside China.
Gold prices rose more than 1% at one point, on course for
their biggest weekly gain since January 2009, while declining
U.S. government bond yields weakened the dollar and pushed it
toward its worst week since 2016, down more than 2%.
The number of people infected with the new coronavirus
across the world surpassed 100,000 on Friday as its economic
toll intensified, with business districts beginning to empty and
companies bracing for slower sales. A U.S. jobs report showed employers maintained a robust pace
of hiring in February, driving solid wage growth and the
unemployment rate to fall back to near a 50-year low of 3.5%. Upward revisions also were made to hiring in December and
January but this month's report failed to fully capture the
impact of the coronavirus, which led the Federal Reserve to cut
interest rate by a half percentage point earlier this week.
"If you have a really strong jobs report and there's no one
around to hear it, does it make a noise?" said Michael Arone,
chief investment strategist at State Street Global Advisors in
Boston.
"Today's an example that it doesn't. There are many other
things that investors are focused on besides the jobs report
this morning," he said.
Since the end of January when the coronavirus started to
make headlines worldwide, markets have sold off as investors are
unwilling to go into the weekend holding too many risky
positions, Arone said.
"That pattern has held true and we're observing it in
today's market as well," he said.
The flu-like virus emerged late last year in central China
and has spread to more than 80 countries, killing more than
3,000 people. Travel restrictions and factory closings aimed at
curbing the virus are expected to pressure global growth.
MSCI's gauge of stocks across the globe .MIWD00000PUS shed
1.87% and emerging market stocks lost 2.43%.
In Europe, the pan-regional STOXX 600 index .STOXX fell
3.35%. The travel & leisure sub-index .SXTP slid 3.9% to trade
firmly in bear market territory, seen as a 20% drop from recent
peak.
Rate-sensitive U.S. financial stocks .SPSY nursed some of
the biggest losses among the 11 S&P sectors on Wall Street. The
banking sub-index .SPXBK fell 3.3%. The Dow Jones Industrial Average .DJI fell 391.96 points,
or 1.5%, to 25,729.32. The S&P 500 .SPX lost 52.69 points, or
1.74%, to 2,971.25 and the Nasdaq Composite .IXIC dropped
143.20 points, or 1.64%, to 8,595.40.
Money markets are pricing in another 25 basis-point cut at
the Fed meeting on March 18-19, and a 50 basis-point cut by
April. Minneapolis Federal Reserve President Neel Kashkari said
Thursday the Fed could cut rates further if needed. Gold prices rose about 6.3% so far for the week but fell
after initial gains. Spot gold XAU= dropped 1.0% to $1,653.44
an ounce. Treasury prices soared but the strong U.S. non-farm payrolls
report lifted the yield a bit from their lows. Benchmark 10-year notes US10YT=RR rose 50/32 in price to
yield 0.767%, while the 30-year bond US30YT=RR rose 198/32 in
price to yield 1.3329%.
Germany's benchmark 10-year Bund yield fell to a six-month
low of -0.739% DE10YT=RR , close to record lows hit last
September during jitters over the Sino-U.S. trade war.
Oil prices tanked more than 7% to their lowest levels since
mid-2017 after Reuters reported that Russia balked at the
Organization of the Petroleum Exporting Countries proposed steep
production cuts to stabilize prices. Brent LCOc1 futures fell $3.51 to to $46.48 a barrel,
while U.S. West Texas Intermediate (WTI) crude CLc1 slid $3.11
to $42.79 a barrel.
Global stocks' performance vs reported coronavirus cases https://tmsnrt.rs/2vMiwG7
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