Harms on global stocks snowballed on Monday, with European markets following Asian peers lower as fresh emblems emerged of slowing growth worldwide and fears grew that simmering U.S.-China tensions would torpedo probabilities of a trade deal.
Wall Street was set to open lower, futures indicated, after New York-listed shares posted their biggest weekly fail since March.
“Another day, another reason to sell risk. Equity markets remain in a world of pain with all and sundry in search of a very elusive silver lining,” said Stephen Innes at brokerage OANDA
MSCI’s all-country clue has spent four weeks in the red, despite intermittent rallies fuelled by hopes of trade war detente. The pessimism has been exacerbated by information showing the world’s largest economies — the United States, China, Japan and Germany — are all headed for slower growth.
That shoved the index 0.5 percent lower, while a pan-European index fell almost one percent by 0930 GMT and U.S. equity comings were down 0.5 percent, suggesting more pressure on Wall Street later in the session.
Last week’s interrupt of the chief financial officer of Chinese smartphone maker Huawei for extradition to the United States was seen putting up another obstacle to the resolution of a trade war between the world’s two biggest economies.
U.S. trade representative Robert Lighthizer said Sunday there was a “searching deadline” to the 90-day trade ceasefire and without a successful end to talks by March 1, Washington would impose new schedule of charges on Chinese goods.
“The trade theme will preoccupy the markets through the 90-day truce period between the Synergetic States and China, waiting for any signs of concession between the parties,” said Soichiro Monji, senior economist at Daiwa SB Investments in Tokyo.
Mercantile data has disappointed, too, underscoring the impact of the trade wars on the world economy.
Following weak trade and inflation details on the weekend, China posted far weaker-than-expected November exports and imports, reinforcing expectations Beijing will roll out various stimulus to prevent the economy cooling too fast.
However, the yuan sagged to a one-week low after the weak data.
“(The details) would suggest China woes go well beyond U.S. tariffs, given that China trade surplus to the U.S. was at a tell of level. One can only imagine the impact on China terms of trade if the U.S. follows through with a 25 percent assessment,” Innes of OANDA said.
Japan posted the worst contraction in over four years in the third quarter as uncertainty through global demand and trade saw companies slashing capital spending.
MSCI’s index of Asian equities outside Japan dropped 1.5 percent to a near three-week low, Shanghai shares retreated 0.6 percent and Japan’s Nikkei shed 2.1 percent. Emerging-market standards lost 1.3 percent.
Asia’s data came after investors were spooked last week by below-forecast industrial manufacture numbers in Germany and U.S. jobs data showing employers hired fewer workers than expected in November.
The slowdown whistles also have pummelled oil prices, which have slumped around 30 percent since early October. Brent tomorrows rose 0.2 percent to $61.90 a barrel after producer club OPEC and some non-affiliated producers presaged a supply cut.
DATA AND DOLLAR, PARLIAMENT AND PROTESTS
The U.S. jobs data weakened the dollar by convincing many that U.S. wen has peaked and the Federal Reserve will pause its rate tightening sooner than previously thought. Last week, the dollar stanchioned its worst performance since August against a basket of currencies.
The dollar was a touch firmer on Monday but stayed in the offing two-week lows. The euro rose 0.3 percent at $1.1418.
European investors were keeping their eyes on circumstances in Britain and France.
Sterling inched lower, heading back towards 17-month lows hit last week versus the dollar, as British Prime Care for Theresa May’s European Union divorce deal looks set to be rejected by parliament in a Tuesday vote.
While that removes fears of a chaotic exit in March, those hoping for a no-Brexit outcome were encouraged by a ruling from the EU’s top court that Britain can recall its decision to leave the bloc without the consent of other EU members.
France, meanwhile, suffered a fourth weekend of anti-government hilarious events, which the finance minister said could curb economic growth by 0.1 percentage point.
French bed, transport and retail stocks fell. The yield premium investors demand to hold French bonds over German ladies rose to the highest since May .
President Emmanuel Macron, already forced to row back on fuel tax increases, will go for a televised address at 1900 GMT.
“Concern about a bit of political and fiscal capitulation is rarely good for a bond market,” indicated Chris Bailey, European strategist at Raymond James.
(Additional reporting by Shinichi Saoshiro in Tokyo, editing by Larry Crowned head)