European stocks, futures slip after historic rally; dollar rises

Bloomberg

European stocks and US futures dropped as momentum in risk assets stalled after a historic rally. Treasuries advanced.
Banks dragged the Stoxx Europe 600 Index lower. The dollar rose for the first time in nine days, while the euro weakened. Government bonds in the European periphery slipped. A gauge of European junk-grade credit risk increased. Brent crude oil slid after Saudi Arabia decided to cease extra voluntary production cuts by the end of this month.
After global equities rebounded to their levels in February, concern that the bounce back has far overshot the economic recovery weighed more on investors. The World Bank warned the global economy will contract the most since World War II this year, reducing incomes and sending millions of people into poverty in emerging and developing nations.
“There are a lot of unknowns that we are dealing with despite the fact that normalisations of economic activities are still on track,” Frank Tsui, a senior fund manager at Value Partners, said on Bloomberg TV. “There are still a lot of unknown factors.”
Europe’s primary market is set for an avalanche of offerings, dominated by deals from the UK and Spain. A slew of corporate transactions is also expected, which could push annual sales past 1 trillion euros.
The Fed will announce its next policy decision on Wednesday and officials are expected to leave rates above zero. OECD will also release its economic outlook on Wednesday, a twice-yearly analysis of the economic prospects of member countries.
Meanwhile, euro-area finance ministers will meet Thursday to discuss the EU’s recovery package and Eurogroup presidency succession.
The Stoxx Europe 600 Index fell 1% as of 9:26 am London time, futures on the S&P 500 Index declined 0.9%. While Nasdaq 100 Index futures slipped 0.3%, the MSCI Asia Pacific Index climbed 0.5%.
The Bloomberg Dollar Spot Index increased 0.4% and the euro declined 0.4% to $1.1254.
As the British pound dipped 0.5% to $1.2666, the Japanese yen strengthened 0.5% to 107.94 per dollar.
The yield on 10-year Treasuries decreased five basis points to 0.82% and the yield on 30-year Treasuries decreased six basis points to 1.58%. Germany’s 10-year yield declined one basis point to -0.33% and Britain’s 10-year yield fell two basis points to 0.319%.
While Brent crude decreased 0.9% to $40.44 a barrel, gold strengthened 0.2% to $1,702.54 an ounce and iron ore decreased 1.4% to $100.85 per metric ton.