- Asian equities mark heavy disappointment from the US stimulus, travel ban to Europe.
- Australian measures fail to defy broad risk aversion.
- UK PM Johnson’s emergency meeting, ECB will be closely observed to gauge the global policymaker’s fight to coronavirus.
With the market’s risk-off in full steam, Asian stocks revisit their early 2018 lows during the early Thursday. While portraying the same, MSCI’s index of Asia-Pacific shares outside Japan drops 4.5% to test the lowest since October 2018 whereas Japan’s NIKKEI declines 5.35% to 18,380 by the press time.
US President Donald Trump’s failure to match the market expectations of large spending magnifies the earlier risk aversion mainly driven by the coronavirus (COVID-19) headlines. Among them, the CNBC’s news that up to 150 million Americans are expected to contract the virus grabbed the major attention. Additionally, Italy’s guidelines to doctors and the rise in Washington’s numbers were additional reasons for the weakness in trade sentiment.
In doing so, markets paid a little heed to the Australian stimulus worth 1.2% of the GDP. The Aussie PM Scott Morrison’s measures to beat the disease were also ignored by the equity traders of Australia and New Zealand as ASX 200 nosedives 7.11% while NZX 50 is down 5.20% by the time of writing.
The US 10-year treasury yields revisited area below 0.80%, down five basis points (bps), whereas the US equity futures register heavy losses of more than 4.0% as following the trend.
It should also be noted that crude oil prices are on their south-run towards early-week drop as they shed more than 7.0% after the news of stimulus.
Looking forward, the UK PM Johnson has called for the emergency meeting and markets anticipate another announcement of stimulus while the ECB is also on the cards to be watched closely.
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