Global stocks panic as oil price plunges and Covid-19 spreads

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Investors piled into safe-haven bonds, driving the 30-year US bond yields beneath 1% on bets the US Fed will cut interest rates 75 basis points at its March 18 meeting

Investors piled into safe-haven bonds, driving the 30-year US bond yields beneath 1% on bets that the US Federal Reserve will be forced to cut interest rates by at least 75 basis points at its March 18 meeting, after having already delivered an emergency easing last week.

The number of people infected with the coronavirus rose above 110,000, and 3,800 have died from the virus. There were mounting worries that US oil producers that had issued a lot of debt would be made uneconomic by the price drop.Noting that many central banks had little scope to ease further, Martin Whetton, head of bond & rates strategy at CBA, said “let's hope we start to see some more clarity on the reaction”.Markets fully priced in an easing of 75 basis points from the US Federal Reserve on March 18, while a cut to near zero was now seen as likely by April.

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