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Shares Tumble as Bond Market Warning Rings Louder: Markets Wrap




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Stocks expanded their global retreat on Wednesday when investors fled to bonds, running returns down to several years lying in a new wave of risk aversion. Gold advanced.

U.S. stock index futures slumped, indicating a weak opening in New York. Decline in miners and technology companies lowered the Stoxx Europe 600 Index, after Japanese and South Korean stocks had the largest losses in Asia. Chinese stocks lined higher, though. The rally of 10-year Treasuries driven, on the other hand, part of the yield curve looked at the history of achieving recession.

Benchmark dividends went to the lowest since 2016 in Japan, to a record in New Zealand and below the central bank's interest rate in Australia. The dollar leaned higher against its large counterparts for a third day. The Yuan Yuan was on the news that People's Bank of China had injected the most into money market operations since January.

"The decline in US Treasury yield is an indicator of increasing uncertainty," said Lena Komileva, CFO of G Plus Economics Ltd., told Bloomberg TV in London. "It's pretty clear now that we are beyond the cyclical top of earnings and the cyclical trough of credit spreads. "Treasuries will be very well supported here," she said.

Investors measure warning signals in fixed income markets with little expectation of a rapid improvement in global growth outlook or trade war between the US and China, as The full effect of US rise in prices is not yet kicking in. Beijing is using its rare earth dominance as a counter to Washington, and a number of US data tomorrow and Friday will give merchants more chewing on when considering the Federal Reserve's political path.

The difference in yield between three-month and 10-year government bonds – often seen as an early signal of pending downturn – dropped to a low level of 13 minutes minus 13 basis points Wednesday.

Oldest places went West Texas oil futures and lost all their gains from Tuesday and more, and dipped below $ 59 a barrel in New York. A stock market measurement fell to its lowest level since January, and most developing country currencies fell against the dollar.

Here are some important events that come up:

China gives a first look at its May financial results on Friday, with economists predicting the official production PMI, will cross down to 49.9 among the worsening trade dispute with USUS The revised GDP data for the first quarter is due on Thursday. On Friday, data is due to Fed's preferred measurement of price pressure; The food, which excludes food an energy, is assumed to be stable at an annual 1.6%.

And these are the main features of the markets:

Stocks

Stoxx Europe 600 Index fell 1.3% from 11:22 am London time.Futures on the S & P 500 Index dipped 0.6%, the lowest for more than 11 weeks. The Kospi index fell 1.2% on the largest decline in two weeks. The MSCI Asia Pacific Index fell 0.7%. The MSCI Emerging Market Index fell 0.5%, the lowest for almost 20 weeks.

Currencies

Bloomberg Dollar Spot Index advanced 0.2%, the highest in about five months. The euro fell less than 0.05% to $ 1.1577. The British pound dipped less than 0.05% to $ 1,265. The offshore yuan weakened less than 0.05% to 6,909 per dollar.

Bonds

The return on 10-year Treasuries decreased by three basis points to 2.24%, the lowest within 20 months. The yield on two-year government bonds fell four basis points to 2.08%, the lowest for more than 15 months. Germany's 10-year return decreased less than one base point to -0.17%, the lowest within three years. Japan's 10-year return doubled to two base points to -0.09%, the lowest in nearly three years.

Commodities

West Texas Intermediate crude declined 2.1% to $ 57.93 per barrel.Soybeans climbed 3.9% to $ 8.90 a bushel with the largest increase for nearly 11 months. Gold increased 0.3% to $ 1,283.37 an ounce. Corn advanced 3.9% to $ 4.37 a bushel, the highest in a year. [19659020] With the help of Vildana Hajric, Andreea Papuc and Adam Haigh.

To contact the reporter on this story: Todd White in Madrid at twhite2@bloomberg.net

To contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, Robert Brand

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