Stock markets across Asia drop on concerns surrounding global growth
Mar 10 2019
There was also scepticism that the European Central Bank would be able revive inflation toward its near two-percent target long-term, with a key measure of inflation expectations in the currency bloc hitting a two-week low on Friday.
Those losses continued in Asia, where Shanghai, which has surged about a quarter so far this year, shed 4.4 percent, while Hong Kong was off 1.9 percent and Tokyo ended two percent lower with better-than-thought growth figures unable to help the Nikkei 225. China'sstock market slumped the most since October as traders interpreted a rare sell rating from the nation's largest brokerage as a sign the government wants to curb gains.
The February data, well below expectations of a 4.8% drop, worsened the brittle mood on world markets, following the European Central Bank's announcement slashing growth forecasts and unveiling a new round of policy stimulus.
The reversal came in the same week that Canada's central bank took a sudden dovish turn and dismal data from Australia to the United Kingdom instilled a sense of foreboding in markets.
The next hurdle for investors will be US payrolls data for February, with analysts uncertain how much payback there might be for January's outsized jump.
U.S. 10-year Treasury yields hit a fresh two week low 2.627%.
With a global trade war weighing on confidence, industrial production and exports have slipped, exacerbated by a string of domestic difficulties, from German industry's struggle to adapt to new auto emissions regulations to protests in France. West Texas oil futures slipped toward US$56 a barrel in NY. There was also a chance the jobless rate could fall by more than forecast given the recent strength in employment.
The ECB will provide easier, cheaper access to credit for Eurozone banks, with further increases to interest rates ruled out for 2019.
The greenback reached a new 2019 high against a basket of currencies and was last at 97.548. On Wednesday it cut its growth forecast for the euro zone to 1 percent from the prediction of 1.8 percent which it made just last November.
"There is reason to argue that the European Central Bank would need to keep rates lower than beyond the guidance date because if you look at their inflation forecasts out to 2021, you would need some form of accommodation to reach these levels of growth", said ING senior rates strategist Benjamin Schroeder.
"Eurointerest rates could be at current levels into 2021".
Gold futures on the COMEX division of the New York Mercantile Exchange jumped back on Friday as weak USA job data dragged down the dollar and equities.
U.S. crude was last down 38 USA cents at $56.28 a barrel, while Brent crude fell 49c to $65.81.