Markets plunge on 30% crash in oil price and Wuhan coronavirus fears
Topics: MARKETS CRASH OIL WUHAN CORONAVIRUS
They wanted to hedge the economic trauma of Wuhan coronavirus, while oil plunged more than 30 per cent after Saudi Arabia opened the taps in a price war with Russia.
Saudi Arabia had stunned markets with plans to raise its production significantly after the collapse of OPEC’s supply cut agreement with Russia, a grab for market share reminiscent of a drive in 2014 that sent prices down by about two thirds.
The shock in oil was seismic as Brent crude futures slid $12 to $33.20 a barrel in chaotic trade, while U.S. crude shed $11.80 to $29.48.
In Asia, stocks tumbled, the safe haven yen surged and emerging market currencies with exposure to oil tumbled in volatile trade.
Heavy selling was set to continue, with European futures sharply lower and U.S. futures hitting their down limit.
Investors drove 30 year U.S. bond yields beneath 1 per cent on bets the Federal Reserve would be forced to cut interest rates by at least 75 basis points at its March 18th meeting, despite only just having delivered an emergency easing. ■