* Oil tanks another 8% as supply engulfs demand
* European shares sag in early trade
* Nikkei leads rest of Asia lower
* Australia bucks trend, closes 7% up after jobs package
* Dollar back on the rise, EM and petrocurrencies clattered
* Demand for bond safety shoves down yields
* World FX rates in 2020 http://tmsnrt.rs/2egbfVh
By Marc Jones and Wayne Cole
LONDON/SYDNEY, March 30 (Reuters) - Oil took another
eyewatering 8% tumble on Monday and world shares buckled again
as fears mounted that the global coronavirus shutdown could last
for months.
There were some bright spots, with Australian equities
posting a standout jump as the government launched a super-sized
support programme, but that was about it.
Japan's Nikkei had led the rest of Asia lower and Europe's
main markets .FTSE .GDAXI .FCHI slumped by 1.5-2.5% in
early trade, adding to what has already been the region's worst
quarter since 1987. .EU
The rout in oil took crude to its lowest since 2002. Brent
was at only $22 a barrel by 0815 GMT O/R , hammering petro
currencies such as Russia's rouble RUB= , Mexico's peso MXN=
and the Indonesian rupiah IRD= by as much as 2%.
It didn't help that the U.S. dollar was back on the climb.
The euro and pound were both batted back by about 0.6%, leaving
the former near $1.1070 EUR= and sterling at $1.2350 GBP= .
On Friday Britain had become the first major economy to have its
credit rating cut because of the coronavirus.
"I have been in this business almost 30 years and this is
the fastest correction I have seen," Lombard Odier's Chief
Investment Officer Stephane Monier said of this year's plunge in
global markets.
Wall Street futures had also backpeddled into the red,
having been up as much as 1% in Asia after a late flutter of
optimism.
Australia's benchmark ASX200 .AXJ registered a late surge,
closing 7% up after Prime Minister Scott Morrison unveiled a
$130 billion ($79.86 billion) package to help to save jobs.
Most other markets were down but trimmed earlier losses.
Japan's Nikkei .N225 dropped 1.6%, Shanghai blue chips
.CSI300 were down 0.9% and there were sharper drops in
Southeast Asia, with Singapore' benchmark index .STI down
almost 3%. JPMorgan now predicts that global GDP could contract at a
10.5% annualised rate in the first half of the year.
"We continue to mark down 1H20 global GDP forecasts as our
assessment of both the global pandemic's reach and the damage
related to necessary containment policies," said JPMorgan
economist Bruce Kasman.
As a result, central banks have mounted an all-out effort to
bolster activity with rate cuts and massive asset-buying
campaigns, which have at least eased liquidity strains in
markets.
China on Monday became the latest to add stimulus, with a
cut of 20 basis points to a key repo rate, the largest in nearly
five years. Singapore also eased as the city state's bellwether economy
braced for a deep recession while New Zealand's central bank
said it would take corporate debt as collateral for loans.
Rodrigo Catril, a senior FX strategist at NAB, said the main
question for markets was whether all the stimulus would be
enough to help the global economy withstand the shock.
"To answer this question, one needs to know the magnitude of
the containment measures and for how long they will be
implemented," he added.
"This is the big unknown and it suggests markets are likely
to remain volatile until this uncertainty is resolved."
DOLLAR NOT DONE YET
Bond investors looked to be bracing for a long haul, with
European government bond yields dipping and those at the very
short end of the U.S. Treasury curve turning negative. Those on
10-year notes US10YT=RR dropped a steep 26 basis points last
week and were last standing at 0.68%.
That drop has combined with efforts by the Federal Reserve
to pump more U.S. dollars into markets, dragging the currency
off recent highs.
Against the yen, the dollar was pinned at 107.74 JPY= ,
well off the recent high of 111.71, but its gains against the
euro, pound and heavyweight emerging market currencies suggested
it was regaining strength.
"Ultimately, we expect the USD will soon reassert itself as
one of the strongest currencies," argued analysts at CBA, noting
the dollar's role as the world's reserve currency made it a
countercyclical hedge for investors.
"This means the dollar can rise because of the deteriorating
global economic outlook, irrespective of the high likelihood the
U.S. is also in recession."
The dollar's retreat had provided a fillip for gold, but
buying stalled as investors were forced to liquidate profitable
positions to cover losses elsewhere. The metal was last at
$1,613.6 an ounce XAU= . GOL/
Oil prices have also been hit by a fight for market share
between Saudi Arabia and Russia, with neither showing signs of
backing down even as global transport restrictions hammer
demand. O/R
Brent futures LCOc1 were down 8%, or $2, at $22.50 a
barrel - their lowest for 18 years. U.S. West Texas Intermediate
(WTI) crude futures CLc1 fell as far as $19.92, near a 2002
low hit this month.
"Central banks have been easing (monetary policy) and
governments have been offering stimulus packages, but they are
only supportive measures, not radical treatments," said Satoru
Yoshida, a commodity analyst with Rakuten Securities.
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Asia stock markets https://tmsnrt.rs/2zpUAr4
Asia-Pacific valuations https://tmsnrt.rs/2Dr2BQA
Coronavirus crashes world markets IMAGE https://reut.rs/2UFPqk6
Currencies since the start of the year IMAGE https://reut.rs/2JjWrSm
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