|
 European and Asian equities both sank as 3.2 and 1.2 percent falls
for miners and oil firms pushed the FTSEurofirst 300 down for a
third straight day and Tokyo gave back a fifth of the 4 percent it
made last week.
Wall Street looked set for a subdued start too with another
flurry of company earnings from, among others, Halliburton and Xerox
about to hit after some disappointing showings last week. [.N]
Signs that a three-month rally in stocks and commodities markets was
cooling, a U.S. Federal Reserve rate decision on Wednesday and a
Bank of Japan policy update on Thursday meant there was little
incentive for traders to be bold.
Talk has been that Japan could push deeper into negative interest
rate territory, while there is intense interest on where the Fed
currently stands on another rate hike.
"Central banks are still the name of the game," said Nordea's chief
strategist for developed markets, Jan von Gerich.
"There is a chance that the Fed could surprise with a bit of
hawkishness on Wednesday. The dollar hasn't really strengthened and
the S&P 500 is back near its all-time high, so they could certainly
test the market."
The dollar index was trading 0.3 percent lower on the day at 94.862.
Against the euro, it dipped to $1.1256, at the weaker end of a
10-cent range it has held for a year, while the yen rose to 111.16
after a walloping at the end of last week.
Sterling, meanwhile, had hit its highest in over a month after a UK
media blitz from President Barack Obama calling for Britain to stay
in the European Union saw bookmakers lengthen the odds on a Brexit
vote in June.
"If one of our best friends is in an organization that enhances
their influence and enhances their power and enhances their economy,
then I want them to stay in it," Obama said.
The subdued start to the week for Europe's markets, was further
compounded by an unexpected dip in German business morale amid
simmering global growth concerns.
The Munich-based Ifo economic institute said its business climate
index, which surveys around 7,000 firms, edged down to 106.6 in
April compared to a forecast of a rise to 107.0. That was still well
above the survey's long-term average, but also its fourth fall in
five months.
"The mood in the German economy is good but not euphoric," Ifo
economist Klaus Wohlrabe said, citing concerns about weakening
exports -- traditionally Germany's main growth driver -- linked to a
slowdown in the United States and China.
BOJ MEETING
The jittery mood sent investors back into government bonds, having
largely shunned them for the last couple of weeks.
[to top of second column] |
Bund yields fell a fraction but remained above 0.2 percent
having ended Friday with their biggest weekly rise since last
December. U.S. Treasury yields also squeezed lower in European
trade.
As well as the big central bank meetings this week, there is a
blizzard of multinational company earnings and A-list macro data
including both U.S. and euro zone Q1 GDP.
In Asia overnight, Chinese shares had continued a recent poor run as
the blue-chip CSI300 index and Shanghai Composite Index
slipped 0.5 and 0.6 percent respectively. [.SS]
Japan's Nikkei ended down 0.8 percent as the yen pulled off its
lows. MSCI's benchmark 23-country emerging market index dropped
roughly the same in its second consecutive session of falls.
Japan's central bank on Thursday is likely to cut its price
forecasts and debate whether a strong yen, weak global demand and
soft consumption have hurt inflation expectations enough to warrant
another hit of stimulus.
"We've had a strong 20 days (in Japan) and now is the point where
the index will break out or move sideways in anticipation of further
catalysts," said Martin King, co-managing director at Tyton Capital
Advisors.
Among commodities, oil prices slipped after notching their third
straight week of gains following a pick-up up in market sentiment
and signs a persistent global supply glut may be easing. [O/R]
Brent fell roughly 1 percent to $44.65 a barrel, while U.S.
crude shed 1.2 percent to $43.20.
Industrial metals also sagged after Shanghai aluminum futures hit
their highest level in nearly 10 months overnight, while gold ticked
higher on its reputation as a safe port in unsettled markets. [GOL/][MET/L]
(Additional reporting by Lisa Twaronite in Tokyo; editing by John
Stonestreet)
[© 2016 Thomson Reuters. All rights
reserved.] Copyright 2016 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed. |
