In Asian Equity Markets indices attempted to bounce back in Monday after sharp losses last week, even though Chinese manufacturing data released over the weekend and on Monday came in much worse than expected. The Shanghai composite was about 2.9%. Hong Kong’s Hang Seng index also advanced 0.92%. The Nikkei 225 in Japan recovered from an earlier slip to rise 1.24%. Stocks in Australia, however, continued to decline on Monday, with the S&P/ASX 200 down about 0.9%.
In Currency Markets the yen and the euro were on the front foot against the dollar on Monday as traders raised their bets of an interest rate cut by the U.S. Federal Reserve this month to shield the economy from the rapid spread of the coronavirus. As U.S. shares were routed in recent days, Federal Reserve Chair Jerome Powell said on Friday the central bank will “act as appropriate” to support the economy in the face of risks posed by the coronavirus epidemic. The yen last stood little changed at 108.15 to the dollar.
In Commodities Markets oil prices pared losses after earlier hitting multi-year lows on Monday as hopes that a bigger than expected production cut from OPEC and stimulus from central banks could offset economic gloom from the coronavirus outbreak. Brent crude was at $50.32 a barrel, up 65 cents, or 1.3%, after earlier dropping to $48.40, the lowest since July 2017. U.S. West Texas Intermediate crude hit a 14-month low of $43.32 a barrel, before recovering to $45.23, up 47 cents, or 1.1%.
In US Equity Markets main indexes fell for the seventh straight day and were on track for their biggest weekly dip since the 2008 global financial crisis on worries the fast-spreading coronavirus could lead to a recession. The S&P 500 lost 2.49%, to 2,904.48 and the Nasdaq Composite dropped 158.96 points, or 1.86%, to 8,407.52. Rate-sensitive banks were down 3.5% and the financial sector weighed the most on the benchmark S&P 500 index. Utilities, real estate and Consumer Staples were the weakest performers on the day.
In Bond Markets money continued to pour into U.S. Treasuries on Friday on coronavirus concerns, pressuring central bankers to cut rates by sending the yield on the two-year note below 1% for the first time since 2016. Yields on longer-term Treasuries were also down sharply, with the yield on the benchmark 10-year note down 12.6 basis points. The two-year U.S. Treasury yield was down 15.8 basis points to 0.9447%, and at one point was at 0.8913%, its lowest level since late 2016.