Global Markets Rattled By Europe Political Jitters: Markets Wrap

Global markets rattled by Europe political jitters. A selloff in European assets amid heightened political risk hit stocks and bonds around the globe, with investors also positioning for this week’s Federal Reserve decision.

Stocks and bonds dropped across the board after French President Emmanuel Macron called a legislative vote in the wake of a crushing defeat in the European Parliament elections. Yields on France’s 10-year government bonds hit their highest level this year, while shares in the nation’s top banks tumbled almost 10%. The euro led losses in developed world currencies.

“The growing uncertainties in Europe have those markets from across the pond trading lower this morning in a material way,” said Matt Maley at Miller Tabak + Co. “Although it’s hard to decipher what it will mean for the global economy and global markets over the near-term, it does raise uncertainties about the longer term.”

The S&P 500 fell to around 5,330. The yield on 10-year Treasuries advanced two basis points to 4.46%. The dollar rose 0.3%.

Key events this week:

• ECB’s Francois Villeroy de Galhau, Robert Holzmann and Philip Lane speak, Tuesday
• China PPI, CPI, Wednesday
• Germany CPI, Wednesday
• US CPI, Fed rate decision, Wednesday
• G-7 leaders summit, June 13-15
• Eurozone industrial production, Thursday
• US PPI, initial jobless claims, Thursday
• Tesla annual meeting, Thursday
• New York Fed President John Williams moderates a discussion with Treasury Secretary Janet Yellen, Thursday
• Bank of Japan’s monetary policy decision, Friday
• ECB’s Christine Lagarde and Philip Lane speak, Friday
• Chicago Fed President Austan Goolsbee speaks, Friday
• US University of Michigan consumer sentiment, Friday

Some of the main moves in markets:

Stocks

• The S&P 500 fell 0.2% as of 9:30 a.m. New York time
• The Nasdaq 100 fell 0.3%
• The Dow Jones Industrial Average was little changed
• The Stoxx Europe 600 fell 0.7%
• The MSCI World Index fell 0.3%

Currencies

• The Bloomberg Dollar Spot Index rose 0.3%
• The euro fell 0.6% to $1.0740
• The British pound was little changed at $1.2707
• The Japanese yen was little changed at 156.90 per dollar

Cryptocurrencies

• Bitcoin fell 0.5% to $69,321.81
• Ether fell 0.7% to $3,672.54

Bonds

• The yield on 10-year Treasuries advanced two basis points to 4.46%
• Germany’s 10-year yield advanced five basis points to 2.67%
• Britain’s 10-year yield advanced five basis points to 4.31%

Commodities

• West Texas Intermediate crude rose 0.6% to $75.99 a barrel
• Spot gold rose 0.4% to $2,303.59 an ounce

Source