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European stocks declined and U.S. equity futures pared a gain as China pledged to take countermeasures against planned American tariffs. Treasuries and most European bonds advanced.
The Stoxx Europe 600 index fell while the three main American equity contracts trimmed an earlier jump after China’s Ministry of Finance said the latest 10% tariffs on Chinese goods by the U.S. derail efforts to solve disputes via negotiations. Earlier equities climbed in Hong Kong and Shanghai, though they fell overall across Asia a day after the S&P 500 Index dropped as much as 3%. The onshore yuan steadies as China’s central bank added liquidity to the financial system. Gold reversed an earlier decline to edge up.
Investor caution remains high on risk assets, helping to drive the yield on 30-year Treasuries below 2% for the first time, while the world’s pile of negative-yielding debt surpassed $16 trillion. China’s promised response to new tariffs came just as markets seemed to be settling in the wake of Wednesday’s rout. Traders will now await any response from President Donald Trump, as well as data on U.S. retail sales and manufacturing.
“The bond market rally is as much a global story as a U.S. one, and yesterday it was weak data in Asia and Europe that dragged U.S. yields down,” Kit Juckes, a strategist at Societe Generale (PA:SOGN) SA, wrote in a note. “But at some point, U.S. data need to justify the fall in U.S. yields, or at least a bigger part of them than recent data have. So today’s numbers ought to matter.”
Elsewhere, the Australian dollar jumped after a stronger-than-expected jobs report prompted traders to trim bets of another impending interest-rate cut. The yen erased a drop.Here are the main moves in markets:
Stocks
- Futures on the S&P 500 Index gained 0.2% as of 10:19 a.m. London time.
- The Stoxx Europe 600 Index fell 0.4%.
- The U.K.’s FTSE 100 Index sank 0.8%.
- Germany’s DAX Index decreased 0.6%.
- The MSCI Asia Pacific Index dipped 0.7%.
- The Bloomberg Dollar Spot Index fell 0.1%.
- The euro advanced 0.1% to $1.1145.
- The British pound increased 0.3% to $1.2097.
- The yield on 10-year Treasuries fell two basis points to 1.56%.
- The yield on two-year Treasuries dipped three basis points to 1.55%.
- Britain’s 10-year yield declined one basis point to 0.442%.
- Germany’s 10-year yield decreased two basis points to -0.67%.
- West Texas Intermediate crude fell 1% to $54.69 a barrel.
- Gold gained 0.1% to $1,518.05 an ounce.