By Karin Strohecker
London (Reuters) – German 10-year bond yields dived below zero, while European stocks and the euro fell on Friday after adverse data from the continent killed fears for a global economic downturn after this week's poor end of the US Federal Reserve.
The yield on Germany's 1
Factory activity throughout the euro area as a whole looked just as bleak and contracted at the fastest pace for almost six years, reflecting a large drop in demand.
European equities stood with German shares falling 0.3 percent after plumbing to their lowest for two weeks earlier. Stocks in Paris fell 0.8 percent while London fell 1 percent. Europe's banking and industrial products and service sectors led to the decline.
"Figures like those we've seen this morning from the European manufacturing industry in Europe would indicate more weak data," said Tim Graf, EMEA Head of Macro Strategy at State Street . (NYSE 🙂 Global Advisors.
"Everybody is looking for the bend point I'm guessing for when it finally gets better – and it's not quite arrived yet."
MSCI's worldwide inventory of inventory declined by 0.2 percent, pulling away from the 5-1 / 2 month high hit earlier in the week. US stock futures showed that sour mood would spill over to Wall Street, with e-mini futures for Down Jones, S & P and Nasdaq as much as 0.4 percent.
The German data exacerbated concerns about the US economic outlook after the Fed surprised investors by adopting a strong stance on Wednesday and did not anticipate further interest rate hikes this year and finalize the balance sheet settlement.
The decline in German bottom yield comes after the US yield curve flat overnight overnight, suggesting increased market expectations for a recession.
The spread between three-month government bond yields and 10-year note yields fell to the narrowest level since August 2007 following the US Federal Reserve's decision to stop tightening monetary policy, as the US economy shows signs of contraction.
"The main market reaction to the Fed's announcement was that it has agreed that Fed's next step is a betting," says Naoya Oshikubo, senior manager of Sumitomo Mitsui Trust Asset.
"As economic data from China and elsewhere has not tied out yet, investors will look at economic fundamentals for now. If there are improvements, then markets could roll back expectations of a Fed rate cut," he said.
Adding to the uncertainty is concern over how much progress the world's two largest economies will be able to face when meeting for another round of negotiations next week.
On Friday, Bloomberg reported that US officials downplayed the prospect of an imminent trade deal with Beijing, just as a US trade delegation led by trade representative Robert Lighthizer and finance minister Steven Mnuchin will visit China on 28-28. March. 19659004] In foreign exchange markets, the dollar rose 0.3 percent against a basket of six rival currencies in another straight day of gains.
Euro tumbled 0.6 percent to $ 1.11301, pulling further away from Wednesday's 1-1 / 2-month high of $ 1.14485.
Britain's pound stood at $ 1,3147 after recovering overnight, as EU leaders gave Prime Minister Theresa May a two-week postponement until April 12 to determine how to leave the European Union.
Sterling had dropped to $ 1.30 on Thursday in its biggest one-day fall this year as fears that Britain would collide out of the block on March 29.
The EU has said that Britain may have a short delay for Brexit, as requested in May, but she must first gain parliamentary approval for her withdrawal agreement, describing the future relationship between London and its largest trading partner.
In commodity markets, oil prices have gone away from 2019 peaks, as economic growth pertains to ill-feeling and breaks a three-month rally driven by OPEC-led supply cuts and US sanctions against Iran and Venezuela.
futures and futures both fell about 1 percent to $ 67.06 and $ 59.43 per. Barrel.