World Economy

Global Markets Slip

Global Markets Slip Global Markets Slip

 Asian shares and gold retreated on Wednesday and bond yields were near two-week highs as markets were rattled by a media report flagging the possible withdrawal of the European Central Bank’s bond buying program.

European markets are also poised for a subdued start, with spreadbetters expecting Britain’s FTSE 100 to open as much as 0.2% lower, Germany’s DAX to begin the day down 0.5% and France’s CAC 40 to be off as much as 0.7%, Reuters reported.

MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.4%. Japan’s Nikkei closed up 0.5%, aided by a weaker yen.

China markets are closed for the National Day holiday.

Bloomberg reported on Tuesday that the European Central Bank would probably wind down its €80 billion ($90 billion) monthly bond purchases gradually before ending its quantitative easing program, citing unnamed officials at eurozone countries’ central banks.

Rates will remain low until inflation gets up to the ECB’s target, ECB chief economist Peter Praet told bankers on Tuesday.

Gold plunged 3.3% on Tuesday, its biggest tumble since September 2013, to its lowest level since Britain’s vote to leave the European Union. It recovered some of those losses on Wednesday, climbing 0.3% to $1,272.12 an ounce.

The yield on the benchmark 10-year US Treasury notes surged to a near two-week high of 1.692% on Tuesday. At 0625 GMT Wednesday, it was at 1.676%.

German 10-year government bonds also touched an almost two-week high of minus 0.043% on Tuesday before closing at minus 0.091%. On Wednesday, they set a two-week high of minus 0.042% before slipping to minus 0.052%.

 Main Currencies Fall

The dollar, which received a boost overnight from growing expectations for a rate hike this year, inched back on Wednesday.

The dollar index, which tracks the greenback against six major global peers, slipped 0.2% to 95.987 after advancing 0.5% on Tuesday.

The dollar edged up 0.1% to 102.96 yen, after jumping 1.2% to its strongest level since Sept. 14 on Tuesday.

Sterling remained near its 31-year low hit on Tuesday on concerns about Britain’s exit from the European Union, after British Prime Minister Theresa May said on Tuesday the country’s separation from the EU will not be “plain sailing”.

The British pound was last up 0.1% at $1.273, after surrendering almost 2% over the past two days.

The euro dropped as much as 0.7% on Tuesday, but recovered to end the day little changed. It was last trading up 0.1% at $1.121.


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