Photographer: Yuriko Nakao / Bloomberg
Photographer: Yuriko Nakao / Bloomberg
European stocks fell on Tuesday as a planned blockade in Germany amid a resurgence of virus cases called into question the region’s nascent economic recovery.
The Stoxx 600 index fell 0.5%, dragged down by travel and cyclical stocks as Chancellor Angela Merkel put Germany in trouble block during Easter to try to disable another wave of infections. The move comes amid signs that progress against the pandemic is stopping as deaths and global cases increase. The euro fell and regional bonds advanced.
The turmoil in Turkish assets continued following the surprise dismissal of the head of the central bank over the weekend, with a fall in the main stock market index activating a circuit breaker. US equity futures retreated alongside most Asian equities, while the dollar strengthened.
Ten-year US Treasury yields fell even more than the maximum in about 14 months, amid hopes of improving demand during this week’s heavy round sales. The bids include a seven-year note, a maturity that went wrong at last month’s auction, resulting in much higher benchmark yields.
While a new blockade of Europe’s largest economy puts investors up to the task, stabilizing bond yields provides some relief from fears that heavy US spending could revive inflation and force a stricter policy of central banks. All eyes are on Washington later today, where Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell will talk about the pandemic response.
“Risk assets can live on higher returns during the recovery stage,” not just an inflation rebound, said Dwyfor Evans, head of the Asia-Pacific macro strategy at State Street Global Markets. “We’re not there yet, so this is still the beginning of this stage of reflection when it comes to the business cycle: that’s what drives action right now.”
Elsewhere, WTI crude fell below $ 61 a barrel amid concerns about short-term demand prospects.
Vonnie Quinn of Bloomberg reports on the latest news of the hour in “Bloomberg Daybreak: Australia.”
Here are some key events to watch this week:
- Treasury Secretary Janet Yellen and Fed Chairman Jerome Powell make their first joint appearance before the U.S. House Financial Services Committee on Tuesday.
- The U.S. Treasury holds two-, five- and seven-year debt auctions.
- EIA Crude Inventory Report Wednesday.
- Friday, U.S. personal income and expense data.
These are some of the main movements in the financial markets:
Stocks
- S&P 500 index futures fell 0.4% as of 8:19 a.m. London time.
- The Stoxx Europe 600 index fell 0.5%.
- The MSCI Asia Pacific index fell 0.7%.
- The MSCI Emerging Market Index decreased by 0.7%.
Coins
- The Spot Bloomberg Dollar index jumped 0.3%.
- The euro fell 0.3% to $ 1,1902.
- The British pound fell 0.2% to $ 1.3831.
- The land yuan changed little, with $ 6,511 per dollar.
- The Japanese yen strengthened 0.1% to $ 108.76.
Good
- The ten-year Treasury yield fell five basis points to 1.65%.
- The two-year Treasury yield fell less than one basis point to 0.14%.
- Germany’s ten-year yield fell three basis points to -0.34%.
- The ten-year yield in the UK fell two basis points to 0.79%.
- Japan’s ten-year yield fell less than one basis point to 0.082%.
Commodities
- West Texas Crude Oil fell 1.6% to $ 60.58 a barrel.
- Brent crude fell 1.6% to $ 63.60 a barrel.
- Gold weakened 0.1% to $ 1,737.83 an ounce.
– With the assistance of Cormac Mullen