Stocks Pare Gains in Asia; Yen Climbs With Bonds: Markets Wrap

(Bloomberg) — Japanese stocks surrendered gains and U.S. futures came off their highs Tuesday after a wave of initial enthusiasm about central banks kicking into gear to protect the global economy from the hit of the coronavirus.

Central bankers from the U.S., Japan and Europe pledged to act as appropriate to address mounting risks from the coronavirus and Group of Seven finance chiefs confer by phone Tuesday. The Aussie gained after the Reserve Bank of Australia cut rates by a quarter point and said it is ready to ease further. A report from South Korea showing another jump in coronvirus cases there, while on par with Monday, underscored that the disease continues to spread. U.S. 10-year yields slid, the yuan dipped and S&P 500 futures gave up about half their gains.

“There is this sense that central bank liquidity will be coming to an equity market near you,” said Ray Attrill, head of foreign-exchange strategy at National Australia Bank in Sydney. The Bank of Japan “got the ball rolling” Monday with a bond-repurchase operation and record ETF purchase and the RBA “is the next cab off the rank,” he said.

The central banks’ turn follows signs of mounting damage to the global economy. The OECD is warning that growth will sink to levels not seen in more than a decade. Global manufacturing contracted in February by the most since 2009 as the outbreak severely disrupted demand, trade and supply chains.

The global death toll from the virus has now surpassed 3,000. U.S. cases climbed, with four patients dying in Washington State and the first infections appearing in New York City, Brussels and Berlin, while cases jumped in hot spots of Italy, Iran and South Korea.

Here are some key events coming up:

U.S. citizens in states including California and Texas will vote on “Super Tuesday” for a Democratic candidate to run against President Donald Trump in November’s election.The Bank of Canada has a rate decision on Wednesday.OPEC ministers gather in Vienna on March 5-6.

These are the main moves in markets:

Stocks

S&P 500 futures rose 0.6% as of 12:35 p.m. in Tokyo. The S&P 500 Index rose 4.6%.Topix index dipped 0.2%.Australia’s S&P/ASX 200 Index climbed 1.5%.South Korea’s Kospi index rose 1.5%.Hong Kong’s Hang Seng Index rose 0.6%.Shanghai Composite Index added 1.5%.MSCI Asia-Pacific Index added 0.8%.

Currencies

The Japanese yen rose 0.3% to 108 per dollar.The offshore yuan was little changed at 6.9703 per dollar.The euro traded at $1.1140, little changed.

Bonds

The yield on 10-year Treasuries fell about three basis point to 1.13%.Australia’s 10-year bond yield fell more than three basis points to 0.77%.

Commodities

West Texas Intermediate crude climbed 2.6% to $47.98 a barrel.Gold rose 0.6% to $1,598.52 an ounce.

–With assistance from Sophie Caronello.

To contact the reporter on this story: Andreea Papuc in Sydney at [email protected]

To contact the editors responsible for this story: Christopher Anstey at [email protected], Ravil Shirodkar

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