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MORNING BID-Fire and fury ... and then some calm

A look at the day ahead from EMEA deputy markets editor Sujata Rao. The views expressed are her own.

After another week of central banks displaying their firepower, things seem a bit calmer. Hopefully, it is a plumbing issue and the dollars the Fed injected will slowly make their way through a gummed-up financial system. World shares are up 1%, Europe is up 4% and U.S. equity futures are up around 3%, extending the rebound in New York trade last night.

The bounce came after the Fed increased access to dollars for central banks in nine countries, in addition to the five it already has swaps in place with. Deutsche Bank's Jim Reid offers this tidbit -- yesterday was the first time in 13 days the S&P 500 saw a move of less than 1% in either direction. It was also the first time in over a week it moved less than 5%.

Still, it's hardly boring – world stocks are down $6 trillion this week. Oil has bounced another 5% and euro zone government bond yields continue to tumble. The clearest sign the measures are working will show up in the dollar -- that's down 1.5% this morning while most others, including riskier, commodity-reliant currencies, are rebounding. The Aussie and Kiwi dollars, sterling, yen and Norwegian crown are up 1% to 3%.

And the cross-currency basis swap – the premium people are willing to pay to get their hands on dollars -- has narrowed. The three-month euro-dollar swap is at 9 basis points, off from 84 bps at the start of this week.

But fears for currencies linger – Norway has cut rates again this morning despite threatening direct intervention on currency markets to lift its crown. Denmark in a highly unusual move upped them yesterday by 15 bps to protect its currency.

Emerging-market currencies are higher too -- offshore Chinese yuan is up more than 1% and the Korean won has bounced more than 3%, but that's nothing compared to the brutal falls they have suffered in recent weeks.

And volatility is sky-high still – Norwegian crown volatility was bid at 45% on Thursday at one point (it was below 10% at the end of Feb and 6% in January). This morning, vols remain elevated, with euro-dollar vol now around 14%, off from 14.5% yesterday, and it's a similar picture on the swaps markets.

Looking back at this week, world stocks have fallen 10% so far, in addition to last week’s 12-plus. Barring a rebound next week, MSCI’s world index will have the worst week ever. U.S. Treasury yields are actually down for the week, but that's after huge swings – on March 17th, 10-year yields rose almost 30 bps, the single biggest intraday move since 2004. The dollar is still set for its best week since 2008. The pound languishes near 35-year lows, hit also by Brexit complications.

Corporate announcements in Europe that show the impact of the epidemic on the real economy. Aluminium maker Norsk Hydro reduced or halted production of some components for the auto and construction industries. Jaguar Land Rover will suspend production at its UK facilities. Nice exclusive from our Paris reporter Bate Felix, who reported that Total would freeze recruitment and halt share buybacks.

It's not all doom and gloom. Trading platform CMC Markets upgraded its annual earnings targets for the fourth time in less than six months, thanks to huge rises in financial market volatility and trading volumes.

That's reassuring for banks with big trading operations -- could that offset the hit to retail banking? Interesting M&A development: Bloomberg reports LVMH may buy Tiffany shares on the open market at a discount rather than through its takeover offer. It's reassuring to see deals not being cancelled altogether, but this will spook many merger arb funds.

And while the assumption is that M&A grinds to halt in times like these, French supermarket chain Casino announced it would sell 567 Leader Price stores, and three warehouses, to German discount rival Aldi for 735 million euros. One benefit of the toilet roll rush?

Another piece of good news for investors: Zurich is keeping its dividend proposal amid the general freeze in payouts among European companies.

Emerging-market stocks are up 4.7%, enjoying their best day since September 2011. Chinese stocks closed 1.8% higher, their first gain in eight trading sessions. Interestingly, though, China defied expectations it would cut lending rates. Russia too is likely to hold rates later on Friday, although it may announce some financial stability measures. Meanwhile, the oil price bounce has lifted the rouble off four-year lows. (Editing by Larry King)