Risk appetites remain in check as the spread of the coronavirus is leading to more and longer shutdowns. Asia Pacific equities fell with Australia, the notable exception. Its benchmark rallied a record 7%, encouraged by additional stimulus measures. Led by financials, following new that the ECB is requesting banks hold off dividend payments until October (which frees up an estimated 30 bln euros), real estate, and consumer discretionary sectors, the Dow Jones is off by a little more than 0.5% in late morning turnover. US shares are flat to slightly higher.
Benchmark 10-year yields are mostly lower, led here too by Australia’s 14 bp decline (to about 75 bp). The UK Gilt market shows little response to the pre-weekend downgrade, and the 10-year yield is off eight basis points, the most in Europe. Core European yields are 3-6 bp lower, while Italy’s yield is about nine basis points higher. The US benchmark yield is off four basis points near 0.63%.
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