In European Equity Markets the pan-European STOXX 600 was down 1.4% to its lowest point since March 11, basic resources leading the losses with a 2.5% decline as all sectors remained in the red. Also weighing on European investors was disappointing economic data. An indicator of German consumer sentiment fell to its lowest level in two years on Tuesday. In terms of individual stocks, Swedish radiation company Elekta climbed 19% after a strong set of fourth-quarter earnings, while shares of German IT company Bechtle fell 7.8%.
In Currency Markets the Swiss franc gained across the board on Wednesday and the yen rallied to a two-week high versus the dollar as investors flocked to perceived safe havens assets amid growing fears about trade and growth. The Swiss franc, a currency that usually gains when risk aversion is strong, gained against the euro and was within striking distance of a near two-month high hit last week. The yen edged 0.2 percent higher to 109.15 against the dollar, its highest level since May 15 this year and not far away from an early February high of 109.02 yen.
In Commodities Markets oil prices fell sharply on Wednesday as China signaled it would play the rare earths card in its trade war with the United States, stoking concerns that an ongoing stand-off could hurt crude demand. Supply constraints linked to OPEC output cuts and political tensions in the Middle East offered some support, however. Front-month Brent crude futures were at $68.68 a barrel, down $1.43 from the previous close, having hit a session low of $68.08. U.S. WTI crude futures were at $57.57 per barrel, down $1.57, after hitting a low of $57.14.
In US Equity Markets indices hit more than two-month lows on Wednesday, after China signaled further escalation in its trade war with the United States, fueling fears that the dispute could be protracted and pressure global economic growth. The S&P 500 was down 0.64%, at 2,784.42 and the Nasdaq Composite fell 0.74%, at 7,550.87. Among other stocks, Capri Holdings Ltd fell 8.6%, the most among S&P companies, after the Michael Kors owner issued a disappointing first-quarter profit forecast as it spends more on marketing.
In Bond Markets peripheral bond yields in the euro zone fell to record lows on Wednesday as deeply negative German bond yields forced investors to look elsewhere for returns, with even Italy enjoying some demand. Spanish and Portuguese 10-year bond yields slid over five basis points each to record lows of 0.73% and 0.87% respectively . Italy’s 10-year yields reversed earlier rises, falling four bps to 2.65%. Germany’s 10-year bond yield fell to its most negative in nearly three years, hitting -0.17%, pushing the German curve to its flattest in the same period of time.