Global Markets: Safe havens rise as recession concerns trigger easing bets
By Rodrigo Campos NEW YORK (Reuters) - Traditional safe-havens including the Japanese yen and U.S. Treasuries were sought out on Tuesday even as there were signs that more economic stimulus was on its way, as traders focussed on concerns over a global deceleration. The prospect of new elections in Italy after the announced resignation of Prime Minister Giuseppe Conte added to global uncertainties, but Italian markets have been jittery over infighting within the coalition and Italian yields fell after the announcement.
By Rodrigo Campos
NEW YORK (Reuters) - Traditional safe-havens including the Japanese yen and U.S. Treasuries were sought out on Tuesday even as there were signs that more economic stimulus was on its way, as traders focussed on concerns over a global deceleration.
The prospect of new elections in Italy after the announced resignation of Prime Minister Giuseppe Conte added to global uncertainties, but Italian markets have been jittery over infighting within the coalition and Italian yields fell after the announcement.
The key for markets now is whether pledges for more accommodative policy from Germany to China are enough to assuage concerns about the state of the global economy and end fears of recession.
The immediate focus shifts to the minutes of the U.S. Federal Reserve's most recent meeting, due on Wednesday. Traders are also awaiting the Fed's Jackson Hole seminar and a Group of Seven summit this weekend for clues on what additional steps policymakers will take to boost economic growth.
"Market expectations for Jackson Hole and the central banking community in aggregate are extremely dovish," said Brad Bechtel, managing director at Jefferies in New York. "The U.S. market is pricing a tremendous amount of easing now, along with many other markets around the world. The market is literally trying to force the hand of the central banking community."
Weighed by the prospect of even lower interest rates, bank shares were among the largest decliners on Wall Street <.SPXBK> and in Europe <.SX7P>.
The Dow Jones Industrial Average <.DJI> fell 98.13 points, or 0.38 percent, to 26,037.66, the S&P 500 <.SPX> lost 16.38 points, or 0.56 percent, to 2,907.27 and the Nasdaq Composite <.IXIC> dropped 38.33 points, or 0.48 percent, to 7,964.48.
The pan-European STOXX 600 index <.STOXX> lost 0.68 percent.
MSCI's gauge of stocks across the globe <.MIWD00000PUS> shed 0.30 percent after two sessions of gains over 1%.
Emerging market stocks rose 0.32 percent boosted by overnight gains in South Korea.
The prospect of more central bank easing drove yields lower, Benchmark U.S. 10-year notes
Financial markets went into a tailspin last week after U.S. 2-year yields traded above those of 10-year paper, an inversion that has presaged previous recessions and is widely watched by markets.
The dollar fell against major currencies, in line with the drop in Treasury yields.
The dollar index <.DXY> fell 0.19 percent, with the euro
The Japanese yen strengthened 0.34 percent versus the greenback at 106.29 per dollar, while Sterling
The Turkish lira touched its lowest level in nearly a month and recently fell 1.02 percent versus the greenback at 5.73 per dollar after the central bank reduced the required reserves ratio for certain lenders in a move seen as encouraging more loans.
Oil prices rose as stimulus hopes offset concerns over future demand and helped reverse early losses.
(Reporting by Rodrigo Campos; additional reporting by Gertrude Chavez-Dreyfuss, Jessica Resnick-Ault and Karen Brettell; Editing by Nick Zieminski)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.