Pandemic fears pushed markets off a precipice last week, wiping more than US$5 trillion from global share value as stocks posted their steepest slump in more than a decade.

The sheer scale of losses has prompted financial markets to price in policy responses from the US Federal Reserve to the Bank of Japan and the Reserve Bank of Australia.

Futures now imply a full 50 basis point cut by the Fed in March  while Australian markets are pricing in a quarter-point cut at the RBA’s Tuesday meeting.

In equities, e-minis for the S&P500 declined more than 1 percent. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.3 percent.

Japan's Nikkei opened 1.3 percent lower at a six month trough. Australia's S&P ASX/200 fell 3 percent and New Zealand's NZ50slid 3 percent into correction territory.

Benchmark US 10-year Treasuries hit a fresh record low of 1.0750 percent.

“There had been a lot of hope that today’s market might open somewhat positive given the finish to the US market,” said Jun Bei Liu, portfolio manager at Tribeca Investment Partners in Sydney, referring to Friday’s late climb from intraday lows on Wall Street.

“But the China PMI was significantly weaker than expected, and so we’re seeing the continuation of the sell off,” she said.

“Right now the problem is (the virus) is growing exponentially (beyond China), as an equity investor we’re just not sure of what the ultimate demand impact is.”

Leaders in Europe, the Middle East and the Americas rolled out bans on big gatherings and stricter travel restrictions over the weekend as cases of the new coronavirus spread.

The epidemic, which began in China, has killed almost 3,000 people worldwide as authorities race to contain infections in Iran, Italy, South Korea and the United States.

China on Saturday reported its fastest ever contraction in factory activity.

“It is now highly probable that the coronavirus will spread globally,” Citi analysts said in a note

“Financial markets may over-react until they have visibility on the actual impact.”

Investor panic last week sent bonds soaring and stocks plunging. The S&P 500 index fell 11.5 percent, only its fifth double-digit weekly percentage drop since 1940.

Oil prices dropped to their lowest in more than a year and even gold plunged as holders liquidated what they could to cover margin calls on riskier investments.

On Monday, oil extended losses before steadying on expectations OPEC may cut production.

Brent crude last traded at $49.72 per barrel and US crude at $44.89 per barrel.

In currencies, investors sought shelter in the Japanese yen, which jumped to a 20-week high on the dollar in tandem with the massive shift in money markets to price US rate cuts.

All of this leaves just about every major asset class on edge and few analysts sounding optimistic.

“So it was right not to ‘buy the dip,’” said Michael Every, Rabobank’s senior strategist for the Asia-Pacific.

The yen was last up 0.3 percent at 107.74.

The Aussie huddled near an 11-year low at $0.6551, while the New Zealand dollar slid 0.3 percent to $6225.

The euro was up 0.3 percent at $1.1054.

That left the dollar index steady at 97.957.

China’s Caixin Purchasing Managers Index (PMI), due at 01:45 GMT, and PMI figures from around the world due later on Monday will add more detail to the picture of economic pain.

Later in the week, central bank meetings in Australia, on Tuesday, and Canada, on Wednesday, will be closely watched.

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