* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* Oil crashes more than 30% as Saudi Arabia cuts prices
* Nikkei sinks more than 5%, S&P 500 futures down 4.9%
* Fed funds fully price for 75 bps cut in March, chance of
100 bps
* 30-year Treasury yields drop below 1%, drag dollar down
* Yen surges as Russian rouble, Mexican peso in free-fall
By Wayne Cole and Sumeet Chatterjee
SYDNEY/HONG KONG, March 9 (Reuters) - Global share markets
plunged on Monday as panicked investors fled to the safety of
bonds and the yen to hedge the economic trauma of the
coronavirus, while oil plunged more than 30% after Saudi Arabia
opened the taps in a price war with Russia.
Saudi Arabia had stunned markets with plans to raise its
production significantly after the collapse of OPEC's supply cut
agreement with Russia, a grab for market share reminiscent of a
drive in 2014 that sent prices down by about two thirds. O/R
The shock in oil was seismic as Brent crude LCOc1 futures
slid $12 to $33.20 a barrel in chaotic trade, while U.S. crude
CLc1 shed $11.80 to $29.48. O/R
In Asia, stocks tumbled, the safe-haven yen surged and
emerging market currencies with exposure to oil tumbled in
volatile trade. FRX/
Heavy selling was set to continue, with European futures
sharply lower and U.S. futures hitting their down limit.
Investors drove 30-year U.S. bond yields beneath 1% on bets
the Federal Reserve would be forced to cut interest rates by at
least 75 basis points at its March 18 meeting, despite only just
having delivered an emergency easing.
"Wild is an understatement," said Chris Brankin, Chief
Executive at stockbroker TD Ameritrade Singapore.
"Not just us, but across the globe you would have every
broker/dealer raising their margin requirements...trying to
basically protect our clients from trying to leverage too much
risk or guess where the bottom is."
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS lost 4.4% in its worst day since August 2015,
while Shanghai blue chips .CSI300 fell 2.9%.
EuroSTOXX 50 futures STXEc1 last traded down 6%, German
DAX futures FDXc1 dropped 5.6% and FTSE futures FFIc1 fell
6.5%.
Japan's Nikkei .N225 dropped 5.1% and Australia's
commodity-heavy market .AXJO closed down 7.3%, it's biggest
daily fall since the 2008 global financial crisis.
E-mini futures EScv1 for the S&P 500 .SPX hit their
lower limit of 2,819 in Asia morning trade, pointing to Wall
Street's rout deepening as investors priced in growing risks of
a U.S. recession.
The number of people infected with the coronavirus topped
107,000 across the world as the outbreak reached more countries
and caused more economic carnage.
Italy's markets are sure to come under fire after the
government ordered a lockdown of large parts of the north of the
country, including the financial capital Milan.
There were also worries that U.S. oil producers that had
issued a lot of debt would be made uneconomic by the price drop.
Not helping the mood was news North Korea had fired three
projectiles off its eastern coast on Monday. "After a week when the stockpiling of bonds, credit
protection and toilet paper became a thing, let's hope we start
to see some more clarity on the reaction," said Martin Whetton,
head of bond & rates strategy at CBA.
"Dollar bloc central banks cut policy rates by 125 basis
points, not as a way to stop a viral pandemic, but to stem a
fear pandemic," he added, while noting many had little scope to
ease further.
BOND BUBBLE
A tectonic shift saw markets 0#FF: fully price in an
easing of 75 basis points from the Fed on March 18, while a cut
to near zero was now seen as likely by April.
The European Central Bank meets on Thursday and will be
under intense pressure to act, but rates there are already
deeply negative. "The onus is falling, perhaps inevitably on the actions of
governments to abandon budget surpluses and reinvigorate the
demand side of the economy," said Whetton.
Urgent action was clearly needed with data suggesting the
global economy toppled into recession this quarter. Figures out
from China over the weekend showed exports fell 17.2% in
January-February, from a year earlier. Analysts at BofA Global Research estimated the latest
sell-off had seen $9 trillion in global equity value vaporised
in nine days, while the average 10-year yield in the developed
world hit 16 basis points, the lowest in 120 years.
"The clearest outcome of the exogenous COVID-19 shock is a
collapse in bond yields, which once panic fades can induce huge
rotation to 'growth stocks' and 'bond proxies' in equities,"
they wrote in a client note.
The yield on 10-year U.S. Treasuries US10YT=RR last sat
at 0.4900%, after having plunged to a once-unthinkable 0.4690%,
having halved in just three sessions.
Yields on the 30-year long bond US30YT=RR dived 35 basis
points on Friday alone, the largest daily drop since the 1987
crash, and slid under 1% on Monday to reach 0.96%.
The fall in yields and Fed rate expectations has pulled the
rug out from under the dollar, sending it crashing to the
largest weekly loss in four years =USD . USD/
The dollar extended its slide in Asia to as far as 101.60
yen JPY= , depths not seen since late 2016. It was last down
2.4% at 102.80 in wild trade.
The euro likewise shot to the highest in over 13 months at
$1.1492 EUR= , to be last at $1.1406.
Gold initially cleared $1,700 per ounce XAU= to a fresh
seven-year peak, only to fall back to $1,669.93 amid talk some
investors were having to sell to raise cash to cover margin
calls in stocks. GOL/
Asia stock markets https://tmsnrt.rs/2zpUAr4
Asia-Pacific valuations https://tmsnrt.rs/2Dr2BQA
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(Editing by Sam Holmes and Jane Wardell)