European stocks slump on virus curbs; pound drops

Bloomberg

European stocks tumbled as a new strain of the coronavirus in the UK caused chaos ahead of the Christmas holiday, with regional neighbours suspending travel with the nation following another missed deadline in Brexit talks.
Travel and energy shares dragged the Stoxx Europe 600 Index down around 2% at the open as Italy, the Netherlands, Belgium and France closed their borders to the former European Union state. More than 16 million Britons are now required to stay at home as a full lockdown came into force in London and the southeast of England.
Meanwhile, the pound slumped nearly 2% as an official said “significant differences” remain in trade talks with the European Union (EU). Crude oil falls. Havens like Treasuries, the dollar and gold all advanced.
The emergence of the mutant strain of the virus in Britain is testing investors as they count down to the end of a chaotic year. Despite positive news recently over vaccine rollouts and stimulus packages, the pandemic for now is overshadowing any optimism, with experts warning it’s unlikely to be eliminated any time soon.
“For many, the end of 2020 cannot come soon enough,” said Simon Ballard, chief economist at First Abu Dhabi Bank. “The pathogen has wrought mayhem across financial markets and so we expect the New Year wish of many market participants to be that the arrival and initial distribution of coronavirus vaccines now signals light at the end of a very tiring and debilitating tunnel.”
In the US, equity futures edged lower after Congressional leaders reached a deal on roughly $900 billion of outlays to support the economy amid escalating virus cases. Major Asia Pacific equity markets were little changed.
Elsewhere, Thailand was one of the worst-performing equity markets globally, with the SET index sinking as much as 3.7%, as authorities said they might need to extend restrictions more widely amid a surge in virus cases.
Futures on the S&P 500 Index dipped 0.4% as of 8:13 am London time and the Stoxx Europe 600 Index sinks 1.7%.
While the MSCI Asia Pacific Index decreased 0.3%, the MSCI Emerging Market Index fell 0.4%.
The Bloomberg Dollar Spot Index jumped 0.7% and the euro decreased 0.5% to $1.2193.
While the British pound sinks 1.7% to $1.3297, the onshore yuan weakened 0.2% to 6.549 per dollar. The Japanese yen weakened 0.3% to 103.58 per dollar.
The yield on 10-year Treasuries sinks four basis points to 0.91% and the yield on two-year Treasuries falls one basis point to 0.11%.
While Germany’s 10-year yield sinks four basis points to -0.61%, Britain’s 10-year yield sink six basis points to 0.186% and Japan’s 10-year yield climbed less than one basis point to 0.011%.
West Texas Intermediate crude sank 3.4% to $47.44 a barrel and Brent crude sinks 3.2% to $50.59 a barrel. Gold strengthened as much as 0.9% to $1,897.40 an ounce.