FRIDAY, March 29, 2024
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Markets wrap: Treasuries crack 1 percent; Asia stocks set for declines, yen and gold surge

Markets wrap: Treasuries crack 1 percent; Asia stocks set for declines, yen and gold surge

Stocks in Asia are set to resume declines after an emergency Federal Reserve rate cut sent Treasuries surging and U.S. shares slumping on concern it won't be enough to cushion the economic hit from the spreading coronavirus. The yen and gold surged.

Futures pointed lower in Japan, Hong Kong and Australia, with regional shares poised to snuff out two days of gains. The S&P 500 index fell almost 3% following the Fed's 50 basis-point rate cut and comments from Chairman Jerome Powell that the virus outbreak will weigh on activity "for some time." The two-year Treasury yield sank below 0.65%, while the 10-year plunged below 1% for the first time and the dollar retreated. Australian bonds opened higher.

"We are worried that there's going to be a massive disruption of the economy," Jim Bianco, president and founder of Bianco Research, told Bloomberg TV in New York. "That's what is driving these markets. Now hopefully that doesn't happen and the Fed can reverse" it.

Treasury yields at all-time lows and expectations the Fed may act again as soon as this month show markets remain extremely cautious about the economy's prospects to weather the hit. The OECD said the world economy faces its "greatest danger" since the 2008 financial crisis. Still, some are suggesting stocks look better value following the recent tumble.

"We saw a massive re-pricing of risk assets and with the repricing it's made equities a better and more attractive risk-reward for us," Anna Han, equity strategist at Wells Fargo Securities, told Bloomberg TV. "However, we are very eyes wide open and we absolutely don't think that the worst is over."

Elsewhere, oil advanced for a second day after an OPEC+ committee recommended a larger supply cut to offset lost demand from the spread of the virus.

These are the main moves in markets:

- - -

-The S&P 500 index dropped 2.8% on Tuesday.

- Futures on Japan's Nikkei 225 declined 0.9%.

- Hang Seng futures retreated 0.9%.

- Futures on Australia's S&P/ASX 200 index fell 1.3%.

- - -

- The yield on 10-year Treasuries fell 17 basis points to 1%.

- Australia's 10-year dropped seven basis points to 0.72%.

- - -

- The yen rose 1.1% to 107.13 per dollar.

- The offshore yuan rose 0.2% to 6.9486 per dollar.

- The euro rose 0.4% to $1.1179.

- - -

- West Texas Intermediate crude rose 1.2% to $47.31 a barrel.

- Gold climbed 3% to $1,637.76 an ounce.

 

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