European stocks dropped from a one-month high as officials warned the economy will take longer to recover and Germany reported weaker-than-expected industrial data. U.S. futures slid and the dollar advanced.
All but one of the 19 industry groups in the Stoxx Europe 600 Index fell, with real estate and technology shares bearing the brunt of the selling. Bayer AG lost 5.5 per cent after its plan for handling future Roundup cancer claims hit a snag. Treasuries edged higher alongside most European bonds.
In Asia, Chinese stocks powered ahead for a sixth day, although at a slower pace. Iron ore futures jumped and the offshore yuan briefly strengthened through the 7 per dollar level for the first time since March.
Investors are catching their breath after a ferocious rally that pushed the Nasdaq Composite to a record high. While recent reports show that global economy could be past the worst of the slump, it’s a long road back to pre-crisis levels.
The European Commission gave its starkest warning yet about the impact of the pandemic, with the divergences between richer and poorer countries opening up even further than projected two months ago. Officials now forecast a contraction of 8.7 per cent in the euro area this year, a full percentage point deeper than previously predicted.
Here are some key events coming up:
- The EIA crude oil inventory report comes Wednesday.
- All eyes will be on the U.S. weekly jobless claims report on Thursday.
- Singapore holds its general election on Friday.
- Rate decisions in Australia and Malaysia Tuesday.
These are the main moves in markets:
Stocks
- Futures on the S&P 500 Index declined one per cent as of 10:45 a.m. London time.
- The Stoxx Europe 600 Index sank 1.1 per cent.
- The MSCI Asia Pacific Index declined 0.7 per cent.
- The MSCI Emerging Market Index sank 0.7 per cent.
Currencies
- The Bloomberg Dollar Spot Index jumped 0.5 per cent.
- The euro decreased 0.4 per cent to US$1.1266.
- The British pound fell 0.2 per cent to US$1.2469.
- The onshore yuan weakened 0.1 per cent to 7.025 per dollar.
- The Japanese yen weakened 0.4 per cent to 107.73 per dollar.
Bonds
- The yield on 10-year Treasuries declined one basis point to 0.67 per cent.
- The yield on two-year Treasuries climbed less than one basis point to 0.16 per cent.
- Germany’s 10-year yield declined one basis point to -0.44 per cent.
- Britain’s 10-year yield fell one basis point to 0.192 per cent.
- Japan’s 10-year yield increased one basis point to 0.046 per cent.
Commodities
- West Texas Intermediate crude sank 1.5 per cent to US$40.04 a barrel.
- Brent crude fell 1.2 per cent to US$42.60 a barrel.
- Gold weakened 0.5 per cent to US$1,776.29 an ounce.
