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European Stocks Slide to 3-Week Low, Dollar Rises: Markets Wrap

European Stocks Slide to 3-Week Low, Dollar Rises: Markets Wrap

(Bloomberg) — European stocks sank to a three-week low and U.S. futures slid as evidence of a second virus wave dashed hopes of a quick economic recovery. Treasuries and the dollar rose.

The Stoxx Europe 600 Index pared some losses, but was still 1.4% lower. S&P 500 futures sank 2.2% and Treasuries rallied, pushing the 10-year yield to 0.67%. BP Plc slumped after announcing it will write down the value of its business by as much as $17.5 billion and predicted the pandemic will be a long-term hit to energy demand.

After a fierce rally sent global equities close to their pre-pandemic levels, sentiment in markets is starting to sour. Evidence is emerging that a second wave of the virus is underway and economic data points to a slow and difficult recovery.

“We’ve gone risk-off because the reality of the U-shape pick-up” is hitting home, David Bloom, global head of foreign-exchange strategy at HSBC Holdings Plc, said on Bloomberg TV. “It’s a U-shape pick-up, and it’s going to be slow and patchy” he said of the recovery.

In China, a string of top-tier data all showed that factory output, consumer spending and investment continued to improve in May, but there are few signs of a broad-based rebound needed to spur a V-shaped recovery.

China’s Slow Reboot Points to Hard Road Back for Global Economy

On the virus front, more than 20 U.S. states are seeing a pick-up in cases. Spreading cases in Beijing have also raised concern of a resurgence of the pandemic in China and a former Food and Drug Administration chief said new U.S. outbreaks are occurring.

In other markets, bitcoin slid below $9,000 for the first time since May.

These are some key events coming up:

Policy decisions from the Bank of Japan, Bank of England and the Swiss National Bank are due this week.China on Monday releases industrial production and retail sales data for May.CBOE plans to open its trading floor, which has been electronic only since March 16.Federal Reserve Chairman Jerome Powell delivers his semi-annual policy report to Congress.

These are some of the main moves in markets:


Futures on the S&P 500 Index decreased 1.8% as of 9:55 a.m. New York time.The Stoxx Europe 600 Index fell 1%.The MSCI Asia Pacific Index declined 2.3%.The MSCI Emerging Market Index fell 1.9%.


The Bloomberg Dollar Spot Index gained 0.2% to 1,216.55.The euro climbed 0.1% to $1.1262.The British pound was little changed at $1.2538.The Japanese yen strengthened 0.1% to 107.27 per dollar.


The yield on 10-year Treasuries sank three basis points to 0.68%.The yield on two-year Treasuries decreased one basis point to 0.18%.Germany’s 10-year yield dipped one basis point to -0.45%.Britain’s 10-year yield declined two basis points to 0.192%.


West Texas Intermediate crude dipped 2.7% to $35.56 a barrel.Gold weakened 0.6% to $1,720.55 an ounce.

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