The mood was mainly risk-off across markets on Tuesday, with U.S. stock futures slipping and declines across Asia as investors grappled with trade, growth, and geopolitical worries. The dollar rallied amid upbeat retail sales data, the bond sell-off deepened, and oil advanced.
The Stoxx Europe 600 Index was a standout in the equity space, shrugging off its early malaise to advance as higher fuel prices spurred energy companies. But benchmarks fell in South Korea and Australia earlier, and in Hong Kong after data signaled investment slowing in China. Shanghai shares bucked the declines as the same numbers showed economic momentum broadly holding up. Treasury yields once again rose above 3 percent, and the euro slid following disappointing German growth data.
What began as a sell-off in European bonds on Monday — off the back of hawkish comments from an ECB official — picked up steam through the U.S. session and carried through to Asia. Rising yields, a stronger dollar and sliding stocks are fast becoming a familiar and uncomfortable cocktail for investors. Now violence in the Middle East, the U.S.-China trade spat, uncertainty on Italy’s government and global growth concerns are helping cement the prevailing sentiment.
Despite the sour mood, established safe-haven assets failed to catch a bid. Gold and the yen dropped, and the Swiss franc weakened.
Elsewhere, the Turkish lira hit a new low, plunging after President Recep Tayyip Erdogan said he intends to tighten his grip on the economy and take more responsibility for monetary policy if he wins an election next month. Emerging-market stocks slumped.
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These are some key events to watch this week:
- China plans to send Vice Premier Liu He to Washington for more trade talks.
- European Union Chief Brexit negotiator Michel Barnier briefs European affairs ministers on the status of talks with the U.K.
- U.K. Prime Minister Theresa May meets with her Brexit cabinet Tuesday to discuss plans for a post-withdrawal customs union.
- U.S. industrial production numbers are due this week.
These are the main moves in markets:
- The Stoxx Europe 600 Index increased 0.2 percent as of 8:32 a.m. New York time, the highest in almost 15 weeks.
- Futures on the S&P 500 Index declined 0.3 percent, the first retreat in almost two weeks.
- The MSCI All-Country World Index declined 0.4 percent, the first retreat in a week and the largest drop in almost two weeks.
- The U.K.’s FTSE 100 Index jumped 0.5 percent to the highest in almost four months.
- Germany’s DAX Index climbed 0.1 percent.
- The MSCI Emerging Market Index sank 1.4 percent, the first retreat in more than a week and the biggest tumble in almost seven weeks.
- The MSCI Asia Pacific Index sank 1 percent, the largest decrease in almost seven weeks.
- The Bloomberg Dollar Spot Index climbed 0.5 percent to the highest in almost 20 weeks on the biggest increase in two weeks.
- The euro declined 0.5 percent to $1.187, the largest fall in a week.
- The British pound dipped 0.4 percent to $1.3507, the weakest in 19 weeks on the biggest dip in two weeks.
- The Japanese yen dipped 0.5 percent to 110.18 per dollar, the weakest in 16 weeks.
- The yield on 10-year Treasuries jumped three basis points to 3.04 percent, the highest in about seven years on the biggest surge in more than three weeks.
- Germany’s 10-year yield increased three basis points to 0.64 percent, the highest in more than two months.
- Britain’s 10-year yield climbed one basis point to 1.486 percent, the highest in almost three weeks.
- West Texas Intermediate crude gained 1.1 percent to $71.73 a barrel, the highest in more than three years.
- Copper decreased 0.4 percent to $3.08 a pound.
- Gold decreased 0.8 percent to $1,303.25 an ounce, the weakest in 19 weeks on the largest dip in two weeks.
— With assistance by Andreea Papuc