Coronavirus threatens a global recession as equities plunged, and yields sank. The price war signaled by Saudi Arabia and Russia aggravates the desperate situation. Equities markets in the Asia Pacific region slumped 3-7%. The was fell 3%. The was off by 5%, and Australia was hit among the hardest with a 7.3% loss. Europe’s Dow Jones gapped lower and had not reached a bottom in the morning session, and is off nearly 5.7% as this is written. US indices are hitting their opening limits (5% for the ).
Benchmark yields are collapsing. The US yield is off roughly 30 bp to below 0.50%. The yield is below 1%. The German is at a new record low around minus 85 bp, while the UK Gilt yield has been more than halved to below 10 bp. Peripheral European bonds continue to trade like risk assets, and the yields are rising with the Italian yield jumping more than 20 bp.
The has soared and is up roughly 2.5% in late European morning turnover. The is mixed. It is firmer…