Stocks slumped again in Asia as the precipitous decline in developed-market Yields on 10-year Treasuries hit a fresh 15-month low on Thursday in Asia, and Australian ones recorded the lowest on record, while Japan’s are near levels unseen since 2016. Japanese shares led declines in the region, sliding almost 2 percent. Korea’s benchmark also slumped, while China and Hong Kong saw more modest declines. U.S. futures fell after the S&P 500 Index dropped on Wednesday. The yen headed higher as haven demand emerged.
Britain’s pound traded at the weaker end of its recent range after the U.K. Parliament rejected eight possible options for a new Brexit strategy, leaving the Brexit outlook all the muddier. Elsewhere, rates on benchmark German Bunds sank further below zero after European Central Bank President Mario Draghi said an accommodative stance is still needed.
Recent data showing weakness in U.S. housing and consumer sentiment fed into the growth concerns that have helped stoke the bond rally over the past week. Federal funds futures are now pricing in more than a quarter point of easing by the end of 2019.
Everything is going ‘mad’ in the bond market -- read more here.
“We are worried about the short term because the Fed is as dovish as they can be in the short term,” Chris Harvey, head of equity strategy at Wells Fargo in New York, told Bloomberg TV. “Interest rates are coming down throughout the globe, fears of recession are starting to go higher. We don’t think those fears are founded -- but you have to acknowledge that that’s going to weigh on markets in the short term.’’
Here are some key events coming up:
U.S.-China trade talks resume, with a cabinet-level American delegation due in China. Fed official Randal Quarles will speak Friday to the Shadow Open Market Committee on “Strategic Approaches to the Fed’s Balance Sheet and Communications.”These are the main moves in markets:
Stocks
Japan’s Topix index fell 1.9 percent as of 10:30 a.m. in Tokyo. South Korea’s Kospi index retreated 1 percent. Hong Kong’s Hang Seng Index slid 0.2 percent. The Shanghai Composite fell 0.4 percent. Australia’s S&P/ASX 200 Index dropped 0.1 percent. The S&P 500 Index futures dipped 0.5 percent after the underlying benchmark fell 0.5 percent.
Currencies
The yen rose 0.3 percent to 110.20 per dollar. The offshore yuan traded flat at 6.7378 per dollar. The Bloomberg Dollar Spot Index rose 0.1 percent. The euro bought $1.1252, up 0.1 percent. The British pound dipped 0.1 percent to $1.3181.
Bonds
The yield on 10-year Treasuries fell two basis points to 2.34 percent, adding to a five-basis point drop in the previous session. Australia’s 10-year bond yield dipped four basis points to 1.73 percent.
Commodities
West Texas Intermediate crude fell 0.4 percent to $59.17 a barrel. Gold was steady at $1,309.99 an ounce.