-
Europe shares follow Asian peers down; S&P 500 futures lower
-
Cohn departure removes a free-trade advocate from White House
European stocks followed Asian shares lower and U.S. equity futures slumped as President Donald Trump’s plans to punish foreign imports appeared to gather force. Treasuries and most government bonds climbed with the yen as trade-war concerns grew.
The Stoxx Europe 600 Index headed for the first decline in three days as most of its 17 industry sectors retreated. Indexes in Asia also slid as investors mulled the implications of a stronger influence for protectionists in Trump’s administration after the departure of economic adviser Gary Cohn, a free-trade proponent. News that the White House is considering clamping down on Chinese investments and imposing broader tariffs added to the gloom. S&P 500 Index futures dropped, though they pared a decline that was as big as 1.6 percent.
“With Gary Cohn’s resignation, it shows that within the Trump administration the pendulum is swinging toward anti-trade,” said James Cheo, an investment strategist at Bank of Singapore. “What we should be watching out for is how other countries react in response to the tariffs,” he said, advising holding off on any buying “on this dip.”
Terminal users can read a wrap of market views on Cohn’s departure.
The prospect of increased protectionism overshadowed developments on North Korea that helped underpin gains in U.S. markets on Tuesday. Trump signaled that he’s open to talks with the country after Kim Jong Un’s regime told South Korean envoys he’s willing to consider denuclearization under certain conditions. The won rallied.
Elsewhere, the yen rose to its strongest level in almost 16 months, and bonds gained across Europe. Oil extended a decline before industry data that’s expected to show U.S. stockpiles expanded, and as the trade-war fears sapped most commodities. Gold edged lower and Bitcoin slipped.
Terminal users can read more in our markets blog.
Here are some key events coming up this week:
- The Chinese People’s Political Consultative Conference runs through March 15 and overlaps with the National People’s Congress meetings in Beijing, through March 20.
- The ECB isn’t expected to change policy on Thursday, but the Governing Council may discuss a change to pave the way for the end of quantitative easing.
- BOJ monetary policy decision and briefing on Friday.
- U.S. monthly payrolls data come Friday.
And these are the main moves in markets:
Stocks
- The Stoxx Europe 600 Index dipped 0.2 percent as of 8:32 a.m. London time.
- Futures on the S&P 500 Index sank 0.8 percent.
- The MSCI Asia Pacific Index decreased 0.6 percent.
- The MSCI Emerging Market Index declined 0.4 percent.
Currencies
- The Bloomberg Dollar Spot Index increased less than 0.05 percent to 1,126.07.
- The euro gained less than 0.05 percent to $1.241, hitting the strongest in almost three weeks with its fifth straight advance.
- The British pound fell 0.1 percent.
- The Japanese yen climbed 0.3 percent.
Bonds
- The yield on 10-year Treasuries fell two basis points to 2.86 percent.
- Germany’s 10-year yield dipped one basis point to 0.67 percent.
- Britain’s 10-year yield declined one basis point to 1.521 percent.
Commodities
- West Texas Intermediate crude fell 0.9 percent to $62.03 a barrel.
- Gold dipped 0.1 percent to $1,332.59 an ounce.
By Todd White and Adam Haigh
— With assistance by Livia Yap
Source: Bloomberg