Asian stocks and U.S. equity futures tumbled after a surge in the global death toll from the coronavirus and a failure as yet by Congress to agree on an aid plan. Treasury yields retreated.

S&P 500 futures dropped 5% and hit limit down, while European contracts fell more than 6% as leaders scrambled to enforce more restrictions on peoples movements. Stocks in Australia, South Korea and Hong Kong also slumped. Emerging-market currencies tumbled, led by the won and the rupiah, while the dollar slipped against the yen and euro. As investors attempt to assess the severity of the upcoming downturn, Federal Reserve Bank of St. Louis President James Bullard predicted the U.S. unemployment rate may hit 30% in the second quarter because of shutdowns to combat the virus.

Elsewhere, New Zealand’s dollar fell with the country’s bond yields after its central bank joined other countries in saying it will start buying bonds to stimulate the economy.

Markets are pricing a global recession, which we expect; stay defensive, Goldman Sachs Group Inc. strategists Kamakshya Trivedi and Zach Pandl, wrote in a note Sunday. The uncertainties around the depth and duration of the hit to the global economy remain high and the momentum in our own, and other, economic forecasts continues to be sharply negative with downside risks.

Investors are grappling with a faster pace of coronavirus infections against flickers of optimism that have followed extraordinary government actions to protect the global economy, from plans for stimulus and cash handouts to nationalizing companies. Morgan Stanley economists said they now expect a deeper U.S. recession, and that the unemployment rate could surge.

What we were hoping would be a U-shape, we are starting to fear could be an L-shape, Constance Hunter, chief economist at KPMG, told Bloomberg TV, describing the potential shape of the downturn. The range of dispersions in forecasts for the economic impact does illustrate how unprecedented this situation is -- its a health crisis thats started morphing into a financial crisis.

In the U.S., Democrats blocked the U.S. Senate from advancing a massive aid package as House Speaker Nancy Pelosi said the measure fell short of her goals. In the latest policy moves elsewhere, the Reserve Bank of New Zealand said it will buy up to NZ$30 billion ($17 billion) of government bonds in the secondary market over the next 12 months and Thailand’s central bank stepped in to steady its financial system.

As difficult as it is to sit in cash, that’s certainly what I’m doing, Brian Quartarolo, portfolio manager at Pilgrim Partners Asia, told Bloomberg TV. I’m presently in New York, and the fear is palpable -- its rising and there doesn’t seem to be anyone who thinks that this virus effect is anywhere near peaking yet, particularly here in the States.

These are the main moves in markets:

Stocks Futures on the S&P 500 Index dropped 4.1% as of 11:48 a.m. in Tokyo. The gauge dropped 4.3% on Friday. Topix index fell 1%.

Australia’s S&P/ASX 200 Index tumbled 6.6%. Kospi index declined 4.8%. Hang Seng Index lost 4.3%. Shanghai Composite Index slid 2.3%.

Currencies

The yen rose 0.7% to 110.10 per dollar. The offshore yuan was at 7.1156 per dollar, up 0.1%. The kiwi declined 1.1% to 56.36 U.S. cents. The euro rose 0.3% to $1.0720. Bonds The yield on 10-year Treasuries fell 3 basis points to 0.81% after plunging 29 basis points on Friday. New Zealand’s 10-year yield tumbled about 50 basis points to 0.97%. The yield on 10-year Australian notes lost 17 basis points to 0.97%.

Commodities

West Texas Intermediate crude added 0.3% to $22.69 a barrel, while Brent sank 3.2% to $26.15. Gold slid 0.4% to $1,493.15 an ounce.

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