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Equities extended their global retreat on Wednesday as investors fled into bonds and cut yields several times-year lows in a new wave of risk aversion. Crude oil reached a three-month low.
Benchmark yields fell to their lowest level since 2016 in Japan, reaching a record in New Zealand and at the Bank's central bank benchmark rate in Australia. The dollar rose against its major counterparts for a third day. The yuan stabilized after it became known that People's Bank of China had made the most money market transactions since January.
"The decline in US Treasury yields is an indicator of growing uncertainty," said Lena Komileva, chief economist at G Plus Economics Ltd., told Bloomberg TV in London. "It is now quite clear that we have overcome this cyclical high of profits and the cyclical low of credit spreads, which are" very well supported "by government bonds," she said.
Investors measure warning signals in fixed income securities. Earnings markets with little expectation of a rapid improvement in the global growth outlook or trade war between the US and China, as US tariff increases will only be fully effective. Beijing is preparing to use the dominance of the rare earths as an antidote to Washington. A series of American data from tomorrow and Friday will give traders more opportunity to reassess the Federal Reserve's policy stance.
The spread between three- and ten-year government bonds, which is often seen as an early signal of an impending recession, fell to a low of -13 basis points in 2007 on Wednesday.
Otherwise, a benchmark for emerging market equities fell at the lowest level since January and most of the developing world currencies fell against the dollar, led by Russia's ruble.
] Here are some key events:
China gives a first look at May's economic performance on Friday, with economists predicting that the PMI for the manufacturing sector will be 49.9, given the worsening trade war with the US The revised GDP data for the first quarter are due on Thursday. On Friday, data on the preferred measurement of price pressures by the Fed is due. The indicator excluding food and energy is expected to remain constant at 1.6% per year.
These are the main movements in the markets:
The Stoxx Europe 600 Index fell 1.5% from the level of 8:27 am New York time, the lowest level in 14 weeks, the biggest drop in almost three weeks. The S & P 500 fell 0.7%, its lowest level in nearly 12 weeks. The MSCI All-Country World Index was down 0.5%, the lowest level in nearly 12 weeks. The UK FTSE 100 index fell 1.6%, the lowest level in 11 weeks after the largest decline in more than three weeks.
The Bloomberg Dollar Spot Index rose 0.2%, the highest in more than five months. The Euro fell 0.1% to $ 1.1153, the weakest in a week The British pound fell less than 0.05% to $ 1.2647, the weakest in nearly 21 weeks. The Japanese yen rose 0.1% to $ 109.32 per dollar.  Bonds
Ten-year government bond yields fell four basis points to 2.23%, the lowest level in 20 months. The yield fell one basis point to -0.17%, the lowest level in three years or so. Britain's 10-year yield fell one basis point to 0.909%, its lowest level in more than two years. The 10-year Japanese yield fell by two basis points to -0.09 Commodities
West Texas Intermediate crude dropped 3.2% to $ 57.27 a barrel, the lowest level in nearly three months. Gold rose 0.3% to $ 1,283.65 per ounce. The Bloomberg Commodity Index rose 0.1%, its highest level in more than a week.
– With support from Vildana Hajric, Andreea Papuc and Adam Haigh.
Contacting the reporter on this story: Todd White in Madrid at [email protected]
To contact the editors responsible for this story: Christopher Anstey at [email protected], Robert Brand
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