Asian stocks were set to come under pressure on Thursday as downbeat economic data pushed investors to safe havens and growing worries about falling demand sent oil prices lower.

Traders continue to be torn between signs that consumers and businesses are emerging from the economic paralysis caused by the coronavirus and the reality that the pandemic continues to choke global demand.

Also in focus are fresh hostilities between Beijing and Washington after U.S. President Donald Trump said he was watching closely whether China would meet its commitments to increase U.S. goods purchases under the Phase 1 trade deal.

E-mini futures for the S&P 500 ESc1 fell 0.28%.

Japan’s Nikkei 225 futures NKc1 fell 0.23% while Hong Kong’s Hang Seng index futures .HSI HSIc1 lost 0.76%.

Oil, which had rallied for a week as economies slowly reopened, dropped as much as 4% on Wednesday after U.S. crude stockpiles ticked up and diesel inventories swelled, offsetting OPEC-led cuts in production.

Equities investors are expected on Thursday to face more of the kind of dismal economic data that chilled sentiment on Wednesday and stopped the oil rally.

Chinese trade data is expected to show double-digit percentage declines in exports and imports because of the damage from the pandemic to global demand and manufacturing supply chains.

Analysts at ANZ Bank have warned that Asian equity prices show excessive optimism about corporate performance that could be dashed by first-quarter earnings results.

Markets had been upbeat earlier in the week as governments slowly reopened their economies. But that faded on Wednesday in the face of a chilling euro zone GDP forecast and a report that U.S. private employers laid off a record 20.2 million workers in April.

Wall Street was mostly lower on Wednesday. The S&P 500 index closed 0.7% weaker after a late-day selloff. The Nasdaq Composite .IXIC added 0.51% as traders bet on tech and other so-called stay-at-home sectors, while the Dow Jones Industrial Average .DJI lost 0.91%.

“Looking across the markets as we close off the U.S. session and hurtle in Asia trade, we see price action has been soggy, and the bears will probably just about take this one,” Chris Weston, Melbourne-based head of research at broker Pepperstone, said in a Thursday note to clients.

In currency trading, safe-havens rose on Wednesday. The yen hit a seven-week high against the dollar and a 3-1/2-peak versus the euro.

Against a basket of peers, the dollar rose for a third session.

“Safe havens are likely to hold the upper hand as many brace for the impact of the late week jobs data,” said Joe Manimbo, senior market analyst, at Western Union Business Solutions in Washington.

The U.S. government jobs report due on Friday is expected to show the unemployment rate jumped to 16% in April, which would shatter the post-World War Two record of 10.8% set November 1982.

A weekly U.S. government report due on Thursday is forecast to show another 3 million people filed claims for unemployment, adding to the 30.3 million claims of the previous few weeks.

The European Commission on Wednesday forecast the euro zone economy would contract by a record 7.7% this year, and warned that public debt and budget deficits will balloon on spending to offset the damage from the pandemic.

That undercut optimism, sending the pan-European STOXX 600 index down 0.4%.

MSCI’s gauge of stocks across the shed 0.42% on Wednesday.

Longer-dated U.S. Treasury yields jumped to three-week highs on Wednesday after the government sharply increased the size of its long-dated debt auctions to finance its expanding deficit.

Benchmark 10-year note yields jumped as high as 0.743% on Wednesday, the most since April 15.

Gold fell further on Wednesday under the pressure of a stronger dollar and expectations that supplies will grow as bullion refineries resume operations. Spot gold, which had dipped 1.1% in the New York afternoon, added 0.1% to $1,686.54 an ounce.

Reporting by David Henry in New York; Editing by Sam Holmes @ Reuters

Asian shares paused at one-month highs on Wednesday as warnings of the worst global recession since the 1930s underlined the economic damage already done even as some countries tried to re-open for business.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was a slight 0.1% firmer in early trade.

Japan’s Nikkei .N225 eased 0.5%, though that followed a 3% jump the previous session. Likewise, E-Mini futures for the S&P 500 ESc1 dipped 0.6%, following a 3% rise in New York hours.

“Flattening infection curves and the thoughts of more stimulus have lifted all boats,” said Stephen Innes, chief global market strategist at AxiCorp.

“However, appearances can be deceiving as behind the headlines lie the most gnarly storm clouds building, suggesting there is still much to be worried about.”

Even as some U.S. states considered relaxing restrictions, the country’s death toll rose by at least 2,228, a single-day record, according to a Reuters tally.

President Donald Trump responded by saying some states could still open shortly or even immediately. He also temporarily halted funding to the World Health Organization, saying it should have done more to head off the pandemic.

Much economic damage has already been done, with the IMF predicting the world this year would suffer its steepest downturn since the Great Depression of the 1930s.

Bruce Kasman, chief economist at JPMorgan, warned such a slowdown would take a heavy toll on corporate earnings.

“We project global profits to experience a roughly 70% peak-to-trough decline in 2020,” he wrote in a note.

“Even with a projected strong subsequent rebound, global profits are expected to stand 20% below their forecasted pre-pandemic level at the end of next year.”

Shares of JPMorgan Chase (JPM.N) and Wells Fargo & Co (WFC.N) both fell on Tuesday as the banks set aside billions of dollars to cover potential loan losses from the pandemic.

BONDS STILL BID

Bond markets are still wagering on tough times ahead, along with unlimited support from central banks and a disinflationary pulse from lower energy prices.

Yields on U.S. 10-year Treasuries US10YT=RR have settled around 0.74%, more than 100 basis points below where they started the year.

That drop in yields combined with the vast amounts of cash being created by the Federal Reserve has been a drag on the U.S. dollar in recent sessions.

Currencies leveraged to global growth, including the Australian and New Zealand dollars, have led the way higher though the dollar has also lost ground to its major peers.

Early Wednesday, the dollar was down at 107.15 yen JPY= having shed 0.5% overnight, while the euro firmed to $1.0985 EUR=. The dollar index =USD was at its lowest in two weeks at 98.620.

The dollar pullback and a tide of cheap money from central banks has burnished gold prices, with the metal hitting its highest since late 2012. It was last at $1,727 an ounce XAU=.

In energy markets, oil was again picking up the pieces after tumbling on Tuesday as investors doubted a record global output cut could offset the loss of demand as the economy stalls.

U.S. crude CLc1 was last up 48 cents at $20.59, having shed 10% on Tuesday, while Brent crude LCOc1 edged up 39 cents to $29.99 in erratic trade.

Reporting by Wayne Cole, Koh Gui Qing Editing by Sam Holmes. @ Reuters

Record low interest rates are tempting some retail investors in Singapore to load up on debt to buy shares, just as the coronavirus outbreak creates the most volatile markets since the global financial crisis.

Earlier this year, 31-year-old insurance agent Heng Kai Sheng got advances on three separate credit cards to the tune of S$150,000 ($105,000). With the money, he opened a share-financing account at a local bank and pledged the lot as collateral. He was granted leverage of around 3.5 times, a S$500,000 kitty Heng’s plowing into the stock market. Bloomberg‘s Ishika Mookerjee and Faris Mokhtar reported.

“As Asians, our parents always tell us ‘Don’t borrow money, repay your mortgage as soon as possible’,” said Heng, whose initial S$170,000 share portfolio now totals about S$135,000. “But money is so cheap.”

According to preliminary data from the Monetary Authority of Singapore, bank financing for stock purchases by retail investors rebounded in February after three consecutive months of declines. Individuals pumped around S$2 billion into equities in March, 50% more than the previous month, Singapore Exchange Ltd. data show.

The increase comes as the nation’s benchmark equity gauge registered its worst quarter since the global financial crisis. The SPDR Straits Times Index ETF, the largest Singapore-listed exchange-traded fund tracking the city-state’s stocks, saw net inflows of about S$247 million in the three months ended March 31, its largest quarterly boost since 2002, Bloomberg-compiled data show.

“There are probably new and existing investors who aren’t leveraged who would definitely want to take advantage of the sell-off to buy shares,” said Joel Ng, an analyst at KGI Securities (Singapore) Pte.

There are also some suggestions retail investors may be using their homes as collateral to borrow money.

David Gerald, founder of investor lobby group Securities Investors Association (Singapore), said he was aware that investors “may want to refinance their housing loans” in the low-rate environment to free up cash for equity investments. However, “investors should be cautious not to over-leverage” in volatile markets because they may face margin calls, he added.

Not everyone is joining the party. While share financing by banks rose in February, the amount decreased 11% when compared to a year ago. And according to Ng, margin calls “really intensified” in March, particularly for private-bank clients who were sold leveraged products or who took on debt to buy real-estate investment trusts.

Heng said he has a three- to-five-year horizon for his investments, and maintains he’s doing the math to make sure he can always cover the interest, which ranges from 1.38% to 2.03% on the credit cards.

Some of the shares he bought include Oversea-Chinese Banking Corp., which slumped 21% last quarter, Singapore Telecommunications Ltd., down 25%, and Mapletree Industrial Trust, which declined 6.5%.

Heng knows he’s taking a risk but he’s not too worried.

“For young people like us, even if you fail, you can make up the capital,” he said. “If you have sufficient earning power, you should take a bit more risk.”

— With assistance by Abhishek Vishnoi, and Chanyaporn Chanjaroen

Asia stocks fell sharply in afternoon trade on Thursday after the Dow Jones Industrial Average plunged into bear market territory overnight, as the World Health Organization (WHO) declared the coronavirus outbreak a global pandemic.

In Japan, the Nikkei 225 declined 3.3% while the Topix index fell 3.27%. The Japanese yen, often seen as a safe-haven currency, traded at 104.18 following an earlier high of 103.08.

South Korea’s Kospi also plummeted 3.04%.

Meanwhile, shares in Australia dropped, with the S&P/ASX 200 down 5.51%. Hong Kong’s Hang Seng index also fell 3.81%.

Mainland Chinese stocks were lower by the afternoon, with the Shanghai composite declining 1.34% and the Shenzhen component down around 1.95%. The Shenzhen composite shed 1.757%.

Overall, the MSCI Asia ex-Japan index dropped 3.94%.

“The real issue is a supply-side and demand-side disruption associated with COVID-19 and that’s really hard to predict,” said James Cheo, chief market strategist for Southeast Asia at HSBC Private Banking.

“Policy measures, particularly fiscal policy or even interest rate cuts, do not address directly to these issues,” Cheo told CNBC’s “Street Signs” on Thursday. “You really need coordinated health policies and health authorities to actually stem this, contain this rise in COVID-19 cases.”

The strategist said markets are in for a “rollercoaster ride,” adding that the best strategy at present is to diversify across asset classes as it is “too early to add aggressively to risk.”

U.S. President Donald Trump gave an address on Wednesday night Eastern Time to announce measures to tackle the coronavirus outbreak. That included a ban on travelers to the United States from Europe for the next 30 days.

Trump also announced that he would ask Congress for legislative action to provide payroll tax relief, as well as other measures for several groups impacted by the virus.

That comes after the WHO declared COVID-19 a global pandemic on Wednesday.

“We’re deeply concerned both by the alarming levels of spread and severity, and by the alarming levels of inaction,” said WHO Director-General Tedros Adhanom Ghebreyesus. “We have rung the alarm bell loud and clear.”

Overnight on Wall Street, the Dow plummeted 1,462.94 points to close at 23,553.22 — more than 20% lower than the record close set only last month and putting to end an expansion that started in 2009 amid the financial crisis. The S&P 500 ended its trading day day 4.9% lower at 2,741.38 and just short of a bear market. The Nasdaq Composite fell 4.7% to 7,952.05 and was also about 19% below its all-time high.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 96.373 after an earlier high of 96.66.

The Australian dollar changed hands at $0.6457 after seeing highs above $0.657 earlier this week.

Oil prices dropped in the afternoon of Asian trading hours, with international benchmark Brent crude futures down 4.11% to $34.32 per barrel. U.S. crude futures also slipped 3.82% to $31.72 per barrel.

Source: CNBC

Asian stocks looked primed for heavy losses after U.S. equities tumbled with Treasury yields on renewed worries about the impact of the coronavirus. Gold surged with the yen and the Swiss franc.

Equity futures declined more than 2% in Japan and Australian shares opened lower. The S&P 500 Index earlier fell more than 3%, with investor confidence shaken as virus cases continued to rise across the U.S. despite efforts to contain the outbreak and its impact. The yield on 10-year Treasuries slumped to as low as 0.90% and Australian equivalents tracked those moves Friday, plumbing fresh all-time lows. Adam Haigh reports on Bloomberg.

“All we know now is that we don’t really understand what’s going to happen next,” Michael Shaoul, chairman and CEO of Marketfield Asset Management LLC, told Bloomberg TV. “It’s probably four, six, eight weeks before we’re going to have any useful information as to what the trajectory of the virus is and what the actual economic fallout looks like.”

Risk assets have whipsawed this week, with traders on edge amid a rise in virus cases, governments extending quarantines and travel restrictions, and a slew of company warnings on the impact to earnings. Global equities have recovered some of the recent losses but still remain about 10% below the all-time high reached last month.

Still, some saw an opportunity in the sell-off. Action from central banks and governments will counter the economic hit from the virus, according to JPMorgan Chase & Co. strategists who had previously been telling clients to trim risky bets. The team advised boosting equity holdings.

Elsewhere, oil fluctuated as uncertainty loomed over whether Russia would agree to OPEC’s proposal for a large production cut. Gold held its 2% overnight surge.