US futures fall with Europe stocks, Treasuries advance

Bloomberg

US stock-index futures retreated with Asian shares while equities sank across Europe as miserable manufacturing data from the world’s largest economy kept reverberating around markets. The dollar advanced.
Contracts on the S&P 500, Nasdaq 100 and Dow Jones Industrial Average all signalled declines when exchanges open in New York, after the underlying indexes slumped the previous day when a gauge of US manufacturing posted the weakest reading since the end of the last recession. The Stoxx Europe 600 tumbled, heading for its worst two-day performance since August, as all 19 industry sectors turned red. In the Asian session, all major equity markets fell.
Treasuries held gains after the latest US jobs report was largely in line with economists’ estimates, while most European bonds drifted lower.
UK stocks tumbled the most in two months after Prime Minister Boris Johnson outlined his latest Brexit plan and warned the European Union to compromise or watch the UK walk away without a deal. Gold climbed above $1,480.
Investors are reviewing their strategies after the US manufacturing surprise and disappointing data in Europe earlier this week.
The reports confirmed many concerns about slowing world growth amid the US-China trade war, sparking another round of speculation over the amount by which the Federal Reserve may cut interest rates this year.
Attention will now turn to the US labour market. The economy added 135 jobs in September, slightly short of economists’ estimates, a report showed. Services PMI data on Thursday and the non-farm payrolls data on Friday will provide further clues.
“For the month of October I think we are going to continue to see there is no shortage of headwinds for what is going on in the environment in terms of risk to economic growth,” Terri Spath, chief investment officer at Sierra Investment Management Inc, told Bloomberg TV. “There will be a lot more attention paid to that.”
Elsewhere, West Texas oil snapped a six-day losing streak as a surprise drop in US stockpiles and tumbling OPEC output helped to offset more evidence of global economic slowing.
The monthly jobs report is due on Friday. Federal Reserve Chairman Jerome Powell is set to speak on Friday.
The Reserve Bank of India sets policy on Friday.
The Stoxx Europe 600 Index sank 1.6 percent in New York. Futures on the S&P 500 Index decreased 0.4 percent. The UK’s FTSE 100 Index sank 2.2 percent. The MSCI Asia Pacific Index dipped 0.6 percent.
The Bloomberg Dollar Spot Index gained 0.1 percent. The euro decreased 0.1 percent to $1.0924. The Japanese yen advanced 0.2 percent to 107.51 per dollar. The South Korean Won sank 0.6 percent to 1,205.93 per dollar.
The yield on 10-year Treasuries decreased one basis point to 1.63 percent. The yield on two-year Treasuries declined three basis points to 1.52 percent. Britain’s 10-year yield climbed five basis points to 0.517 percent. Japan’s 10-year yield dipped two basis points to -0.164 percent.
West Texas Intermediate crude gained 0.8 percent to $54.03 a barrel. Gold increased 0.5 percent to $1,486.72 an ounce.