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Bloomberg
US equity-index futures extended declines on Tuesday alongside stocks in Europe as the gloom surrounding the outlook for global trade refused to dissipate. The dollar gained and Treasury yields were steady.
Contracts on the S&P 500, Dow Jones Industrial Average and Nasdaq 100 all retreated as China’s top trade negotiator prepares to visit Washington this week to salvage a trade deal in the face President Donald Trump’s latest tariff threats. The Stoxx Europe 600 Index fell to a five-week low, led by declines for banks, oil producers and miners. Korean and Japanese shares slid as both markets reopened after holidays, though stocks in Shanghai and Hong Kong climbed.
The euro turned weaker after the European Commission slashed its growth forecasts for the euro area and warned that escalating trade tensions could worsen the outlook. Bonds in the region
rose. Oil dropped as Saudi Arabia was said to give extra crude supplies to its customers in Asia.
Investor sentiment remains fragile as traders wait for the next development in the trade dispute between the world’s two biggest economies.
China’s government confirmed that Vice Premier Liu He would visit the US for trade talks on May 9 and 10.
At the same time, the country was said to be preparing retaliatory tariffs on American imports should Trump carry out his threat of further duties. The latest twist sets up Thursday as a
potentially key moment in the year-long trade war.
“Reality is setting in that they are not going to get the master deal, the grand deal that they are hoping for and there’s a lot of work to be done,†Oliver Pursche, Bruderman Asset Management’s chief market strategist, told Bloomberg TV. “Our best guess is that these tariffs will be implemented on Friday, but will then be reversed relatively quickly.’’
Elsewhere, Turkey’s lira and stocks slumped as investors interpreted a decision to redo Istanbul’s municipal vote.
The Australian dollar strengthened after the country’s central bank refrained from cutting rates.
The Reserve Bank of New Zealand meets on Wednesday. China releases trade data on Wednesday, and the US does so on Thursday.
South Africa holds national elections on Wednesday. China reports on inflation on Thursday. The US releases the April CPI report on Friday.
A Chinese trade delegation is expected to arrive in Washington for talks.
The Stoxx Europe 600 Index dipped 0.5 percent in New York to the lowest in five weeks. Futures on the S&P 500 Index
fell 0.7 percent. The MSCI All-Country World Index decreased 0.2 percent to the lowest in almost four weeks. The UK’s FTSE 100 Index decreased 0.9 percent. The MSCI Emerging Market Index fell 0.1 percent to the lowest in more than five weeks.
The Bloomberg Dollar Spot Index increased 0.2 percent. The euro decreased 0.1 percent to $1.1184. The British pound declined 0.3 percent to $1.3061. The Japanese yen rose 0.1 percent to 110.63 per dollar, the strongest in almost six weeks.
The yield on 10-year Treasuries advanced less than one basis point to 2.47 percent. Germany’s 10-year yield fell three basis points to -0.03 percent. Britain’s 10-year yield fell five basis points to 1.172 percent. Japan’s 10-year yield dipped one basis point to -0.052 percent.
West Texas Intermediate crude dipped 1.1 percent to $61.57 a barrel, the lowest in more than five weeks.
Gold fell 0.2 percent to $1,278.92 an ounce.
The Bloomberg Commodity Index decreased 0.6 percent to the lowest in almost four months.