Reuters, London

...........................................

World stocks markets regained a measure of calm on Monday as hopes for a raft of global interest rate cuts to soften the economic blow of the coronavirus steadied nerves and drove US Treasury yields close to 1 per cent.

After last week’s worst plunge for equities markets since the depths of the 2008 financial crisis, it was always going to be a wild ride.

Asia had initially dived again after China reported a record slump in factory activity but the region rallied to finish higher as bond yields sunk and talk of OPEC supply cuts sent oil prices roaring up 3.5 per cent.

Europe then made a blistering start. The FTSEurofirst 300 jumped over 2 per cent, putting it on course for its best day in well over a year and Wall Street S&P 500 and Dow futures were pointing to similar gains too.

“The market is coming back because there is perception that there will be a coordinated G7 policy response,” said BlueBay Asset Management’s head of credit strategy David Riley.

“We have Fed and ECB meetings coming up in the next couple of weeks. The Fed is the key one and it will be very hard for them to hold off (from rate cuts) if we are in a situation where the economic downsides are becoming more prevalent.”

The sheer scale of losses led financial markets to price in policy responses from the US Federal Reserve and European Central Bank to the Bank of Japan and the Reserve Bank of Australia. L4N2AU0ZB]