US stock futures and oil prices are sinking further this morning after politicians in Washington failed to agree on a fiscal response to the viral outbreak over the weekend. SPX 500, Dow and Nasdaq futures are limit down and suspended from trading, while bonds and the US dollar are rallying in early Asia Pacific trading.

The strengthening US dollar could flatten any residual optimism today. The stronger responses from central banks and governments will help soften the economic impact of the virus containment measures, but markets are coming to the view that a global recession is unavoidable.

A stronger US dollar is dominating forex trading. The British pound looks set to test the 35-year low set on Friday night. The Singapore, New Zealand and Australian dollars are all near decade lows, and under increasing pressure.

New Zealand ten-year bonds have rallied 0.5% this morning in an unprecedented move that reflects renewed investor enthusiasm for bonds. However gold’s status as a safe haven asset is in question as it once again fails to respond, edging lower in early Asia Pacific trading.

The limit down opening in US futures may see regional markets fall further than predicted by futures closes on Saturday morning. This week sees the release of macro data including Australian, European and American PMIs and UK inflation and retail sales. These releases will shed light on the viral impact.