By Dow Jones Newswires Staff
U.S. stock futures fall slightly. Gold continues its march to new record highs as investors flock to safe-haven assets amid weakening sentiment on the U.S. credit sector.
The dollar falls again, hitting an 11-day low against a basket of currencies after Federal Reserve governor Christopher Waller indicated he would vote for a fresh cut to interest rates, echoing comments from the central bank’s chair, Jerome Powell, earlier in the week.
The French prime minister’s survival of a confidence vote among legislators meanwhile steadies spreads between French and German government bonds and accelerates a fall in eurozone yields.
U.S. stock futures for the S&P 500 were down 0.6%. Futures for the Dow Jones Industrial Average fell by 0.65% and Nasdaq futures slipped by 0.5%.
European indices moved lower, with Germany’s DAX falling 2.3% and the FTSE 100 down 1.4%; U.K. banks including Barclays were among the biggest fallers amid concerns around U.S. regional banks.
Asian shares mainly weakened, led by declines in China, as markets tracked Wall Street losses amid rising uncertainty over U.S.-China trade relations. The tech heavy ChiNext was hit the most, closing 3.4% lower, while Shanghai and Shenzhen were down 2% and 2.7% each respectively. Shares in Japan were also lower with Nikkei dropping 1.4%. South Korea Kospi Index was in and out of negative territory to close flat. The Hang Seng Index is down 2.4%.
The dollar fell further on rising expectations of an interest-rate cut, driving the euro higher. Sterling fell 0.1% to $1.3420. The euro rose 0.2% to $1.1706. DXY dollar index fell 0.1% to 98.203 after earlier hitting an 11-day low of 98.030.
Bitcoin was dragged to its lowest in nearly a week amid a decline in U.S. stocks overnight. The digital asset fell to a low of $105,160, LSEG data showed.
The fall in eurozone yields accelerated slightly, tracking moves in U.S. Treasury yields. The 10-year German Bund yield fell 5 basis points to 2.526%, while the 10-year OAT yield was down 3.2 bps at 3.311% The spread between French government bonds, or OAT, and German bonds, or Bunds, tightened further after French premier Sebastien Lecornu survived a confidence vote in the legislature Thursday, injecting some calm into the country’s turbulent politics. The 10-year OAT-Bund yield spread was 78.6 basis points. U.S. 10-year Treasury yields were down nearly 2 basis points at 4.028%
-Oil prices fell on news that President Trump would meet his Russian counterpart Vladimir Putin, easing recent concerns over supply. Brent crude and WTI fall 0.3% to $60.87 and $56.81 a barrel, respectively. .
-Gold rose to a new record high on the back of Waller’s comments on rates, which added to the precious metal’s safe-haven allure. In early trade, futures in New York are up 1.5% to $4,371 a troy ounce.
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