Gloomy European data hits stocks as bonds advance

Bloomberg

US equity futures fluctuated and European stocks retreated as disappointing data in the euro area overshadowed easing concern about trade relations between America and China. Treasuries rose and the common currency slid.
Manufacturing and services numbers for the euro zone came in far short of estimates on Monday, with disappointing readings from countries including Germany and France. The Stoxx Europe 600 Index extended losses and European bonds rallied. Contracts for all three main US benchmarks gave up earlier gains, which had been spurred after people familiar with the matter said a planned visit to American farms by a Chinese delegation was cancelled at the request of the US — news which eased immediate fears over the outlook for trade talks.
Stocks in Asia were mixed and drifty, with Tokyo shut for a holiday. Equities in India continued a surge, while those in Shanghai dropped.
The onshore yuan fell amid caution in the run-up to next week’s national holidays. The Korean won sank as exports continued to deteriorate.
The gloomy data from the heart of the euro area was a stark reminder to investors of the fragility of the global economy. While markets remain on edge ahead of next month’s planned high-level trade talks between the US and China, they’re also fixated on any action or messaging from the world’s major central banks that could support growth.
A slew of policy makers will speak this week.
“Global growth risks are rising,” Beverley Morris, director of rates and inflation at QIC Ltd. in Brisbane, told Bloomberg TV. “It’s certainly not panic stations at this stage, but certainly in terms of our portfolio actions, we are being more cautious.”
Elsewhere, oil fluctuated following a report that full repairs to Saudi facilities hit by a drone attack may take many months.
New York Fed President John Williams speaks at the US Treasury Market Conference hosted at his bank on Monday. San Francisco Fed President Mary Daly delivers remarks in Salem, Oregon.
Decisions are due on Wednesday from central banks in New Zealand and Thailand. Thursday brings a monetary policy decision in the Philippines. Core PCE — the Fed’s preferred inflation measure — is forecast for 1.8 percent, the strongest reading since January. That’s due on Friday.
Futures on the S&P 500 Index were little changed in New York. The Stoxx Europe 600 Index sank 0.9 percent. The Shanghai Composite Index fell 1 percent. The MSCI Emerging Market Index dipped 0.4 percent.
The Bloomberg Dollar Spot Index gained 0.1 percent. The euro declined 0.3 percent to $1.0982. The British pound fell 0.3 percent to $1.2435. The onshore yuan declined 0.5 percent to 7.127 per dollar. The Japanese yen climbed 0.1 percent to 107.48 per dollar.
The yield on 10-year Treasuries declined three basis points to 1.69 percent.
The yield on two-year Treasuries dipped two basis points to 1.67 percent. Germany’s 10-year yield decreased six basis points to -0.58 percent.