In Australia, ASX futures were down 286 at 5,419.
Investors remained on edge after Saudi Arabia launched an oil price war with Russia and as covid-19 cases now number 113,575, according to the Johns Hopkins virus tracker. There have been 3,995 deaths.
The plunge in oil prices combined with worries about the spreading coronavirus combined to drive market participants into Treasuries, accelerating a years-long rally that has taken yields on the 10-year Treasury to below 0.5 per cent, Reuters said. According to ANZ Bank, the entire US yield curve traded below 1 per cent, with the 30-year at 0.9 per cent for the first time in history.
On Monday, the World Health Organisation said "now that the virus has a foothold in so many countries, the threat of a pandemic has become very real." However, it also emphasised it would be the first pandemic in history that could be controlled.
US President Donald Trump, who has repeatedly played down the threat posed by the flu-like virus, was planning to shortly meet with Treasury Secretary Steven Mnuchin and other members of his economic team to weigh possible action, an administration official told Reuters. Paid sick leave is among policy steps being considered, the official said on condition of anonymity.
The risk-off sentiment is weighing heavily on the greenback, with the New Zealand dollar benefiting. The kiwi traded at 63.53 US cents at 8am in Wellington versus 62.49 cents at 5pm in Wellington yesterday.
ANZ's Workman said a speech today by New Zealand Reserve Bank governor Adrian Orr will be in focus as he outlines the principles of "unconventional monetary policy." The central bank, however, has indicated it won't discuss current economic conditions or the Reserve Bank's outlook for the official cash rate in today's speech.
Yesterday, Orr said the central bank's dealings with the country's banks showed they were prepared. He also said while no significant pressures have been seen on the financial sector yet, the Reserve Bank was ready in its business continuity role to ensure a well-functioning financial system. The government also announced plans to unveil a suite of initiatives including wage subsidies and tax support for firms hit hard by the covid-19 outbreak.
Also of interest today will be ANZ's preliminary read of its March Business Outlook survey at 1pm, said Workman. The data will include survey responses received via internet collection, which makes up the vast majority of responses, before March 9.
- BusinessDesk
