(March 8): Asian stocks were set for declines after a European Central Bank cut to economic forecasts reignited concern on global growth, sending U.S. shares and bond yields lower. The euro fell to the lowest since 2017.
Futures pointed to declines for equities in Japan, Hong Kong and Australia. The S&P 500 Index sank for a fourth day, with Amazon, Microsoft, Apple and Facebook the biggest drags. The gauge closed just below its closely watched 200-day moving average that has provided support in the past. Treasuries and bunds climbed, while the dollar extended its march higher for a seventh day.
The U.S. jobs report on Friday will provide the next clues on the health of global growth after ECB President Mario Draghi delivered fresh stimulus as he downgraded the outlook for the region’s economy. The move came during a week that’s seen China cut its goal for economic expansion, the Bank of Canada dial back its expectations for policy tightening and the Organisation for Economic Co-operation and Development lowering its global outlook.
“In the context of anxiety about global growth, the ECB came out and made a major cut to their European growth forecasts,” Alec Young, managing director for global markets research at FTSE Russell, told Bloomberg TV in New York. “Panic is too strong a word but the market is reading this as a little bit of desperation. The market was surprised at the move by the ECB.”
Elsewhere, the pound fell even after the European Union was said to make a new offer to the U.K. in an attempt to break the Brexit impasse. Oil climbed toward $57 a barrel in New York as investors weighed a U.S. crude-stockpile surge that threatens to undermine OPEC’s bid to avert a glut against a drop in fuel inventories.
Here are some key events coming up:
The U.S. jobs report Friday may show hiring moderated in February. Nonfarm payrolls may have increased by 180,000 while the jobless rate fell to 3.9 percent, according to estimates. The House of Commons votes on U.K. Prime Minister Theresa May’s revised Brexit deal on Tuesday, 20 days before Britain is scheduled to leave the EU. A similar measure was resoundingly defeated in January.
These are the latest moves in markets:
The S&P 500 Index fell 0.8 percent. The MSCI Emerging Market Index sank 1.2 percent. Futures on Japan’s Nikkei 225 fell 0.7 percent. Hang Seng futures lost 0.7 percent. Futures on Australia’s S&P/ASX 200 Index dropped 0.6 percent.
The yen rose 0.1 percent to 111.64 per dollar. The offshore yuan fell 0.3 percent to 6.7346 per dollar. The Bloomberg Dollar Spot Index climbed 0.7 percent, hitting the highest in 10 weeks Thursday. The euro sank 1 percent to $1.1191. The British pound dipped 0.7 percent to $1.3081.
The yield on 10-year Treasuries decreased five basis points to 2.64 percent.
West Texas Intermediate crude climbed 0.6 percent to $56.56 a barrel. Gold slid 0.1 percent to $1,285.41 an ounce. - Bloomberg