European markets start September on a negative note
The pan-European Stoxx 600
fell 1.7% by mid-morning, with basic resources plunging 4.1% to lead losses as all sectors and major bourses slid into the red.
Market jitters have been prevalent since Friday after hawkish remarks from Federal Reserve Chair Jerome Powell. On Tuesday, New York Fed President John Williams called for a “somewhat restrictive policy to slow demand.”
U.S. stocks fell for a fourth-straight day on Wednesday, the last trading session of August, putting the summer market comeback in doubt as investors weighed the Federal Reserve’s inflation-fighting efforts.
Meanwhile, shares in the Asia-Pacific are trading lower Thursday as investors digested the results of a private survey on China’s factory activity which showed the sector slipping into contraction this month. U.S. stock futures fell on Thursday morning.
U.K. factory activity offered a rare upside surprise in August, with the the S&P Global/CIPS manufacturing PMI coming in at 47.3 against a consensus forecast of 46.0.
Despite outpacing expectations, the reading still represents the worst month for British factories since May 2020, as the country battles a historic cost of living crisis.
U.S. Treasury yields rose further to 3.52% in Asia’s morning trade, the highest since November 2007.
The yield on the short-term 2-year Treasury note
reached similar levels on Tuesday, when it hit 3.497%.
The yield on the benchmark 10-year Treasury note also rose to 3.22%, while the yield on the 30-year Treasury bond was at 3.3%.
Yields move inversely to prices, and a basis point is equal to 0.01%.
The results of a private survey showed China’s factory activity contracted in August.
The Caixin/Markit manufacturing Purchasing Managers’ Index came in at 49.5 for August, compared to 50.4 in July.
PMI readings are sequential and represent month-on-month expansion or contraction. The 50-point mark that separates growth from contraction.