Last checked at 
A look at the day ahead from Karin Strohecker, chief
correspondent, emerging markets. The views expressed are her
own.
A glum end to another difficult week. We've seen wild swings in
major equity indexes, U.S. Treasury yields collapsing below 1%
and investors torn between euphoria over monetary and fiscal
stimulus measures on one hand and fears over the coronavirus on
the other. Fear has the upper hand today, with equities falling
and the dollar weakening against the yen and the euro.
World stocks are actually up almost 2% so far this week,
buoyed by the Federal Reserve's emergency rate cut on Tuesday
and rebounding from last week's $6 trillion selloff. But those
weekly gains could get wiped out by the end of the day after
steep declines in Asia. Japanese stocks fell nearly 3% to a six-
month low; Hong Kong and South Korea nearly matched that
decline. European markets followed; the London, Paris, Milan and
Frankfurt exchanges all dropped 1.5% to 2% in early trade. U.S.
futures point to a 1% fall when Wall Street opens.
Coronavirus also overshadows much of the data coming out --
U.S. non-farm payroll numbers are expected to show a 175,000
increase in jobs after a 225,000 rise in January.
In corporate news, Airbus shares tumbled 3% as it
got zero orders in February. EssilorLuxottica also
tumbled 3% at open after the company said it expects is
first-half revenues to be slower.
Infineon fell 0.3% after Bloomberg reported that
Washington recommended Trump block the German chipmaker's
proposed $10 billion deal to buy Cypress Semiconductor.
AstraZeneca fell 0.3% after a combination treatment for
a form of bladder cancer failed to meet its main goal.
On fixed-income markets, yields of safe-haven debt continue
to tumble, with U.S. Treasuries seeing the biggest shakeout.
U.S. 10-year yields are down 10 bps, below 1%. Two-year U.S.
Treasury yields have dropped almost 85 bps in the past two weeks
– their biggest two-week drop since 1987. Ten-year UST yields
are headed for their biggest two-week drop since the financial
crisis in 2008.
Germany's benchmark 10-year Bund yield is within striking
distance of record lows reached six months ago.
Markets are pricing in further rate cuts after the Fed's 50
bps emergency move Tuesday. Another 40 bps of cuts is priced for
March, with about a 60% chance of a more aggressive 50 bps cut.
For ECB, the market expects a 10 bps rate cut at next Thursday's
meeting and a total of two rates cuts by year end.
The slide in U.S. Treasury yields further eroded the
dollar's interest rate advantage. The euro rose to a
near-three-year high against the U.S. currency, which sank to
its lowest in more than five months against the yen, which was
also benefiting from some safe-haven flows.
Emerging-market stocks slipped for the first time in five
trading sessions, falling 1.8% on Friday. Chinese stocks slipped
1.6% but still managed their best week in a year as investors
welcomed Beijing's attempts to control the virus.
Emerging-market currencies were generally weaker, but the
dollar's weakness put China's yuan on track for a second
straight weekly gain. The South Korean won was set for its best
week since 2017, thanks also to a fiscal stimulus package
In Turkey, a ceasefire deal for Syria's Idlib region went
into effect but hasn't so far helped the lira.
Lebanon's government meets on Saturday to take a decision on
its $1.2 billion Eurobond maturing March 9. The state prosecutor
suspended an order freezing assets of 20 banks, warning it would
plunge the country's financial sector into chaos.
After a sweeping government reshuffle this week, Ukraine's
new prime minister, Denys Shmygal, said the government would
continue "constructive" work with the International Monetary
Fund. Argentina's central bank lowered its benchmark interest
rate to 38% from 40% on Thursday, the eighth cut since the
middle of December.
DATA & EVENTS
German industrial orders
UK Halifax house prices
Russia Feb inflation
Non-farm payrolls for Feb/average earnings
US trade balance Jan
US wholesale inventories, consumer credit Jan
(Editing by Larry King)
