Investor nerves remained on show across global stock markets Monday amid continued fretting about the potential for a full-fledged trade war. The dollar strengthened against most major peers and Treasury yields dropped, while the euro weakened as Italy headed toward a hung parliament.
European shares eked out gains following four days of losses, but equity gauges from Tokyo to Sydney slumped during the Asian trading session. The Stoxx Europe 600 Index got a helping hand from the euro, which weakened as Italy’s anti-establishment political groups surged in Sunday’s election. Italian stocks and bonds both slid. Amid worries about the implications of U.S. tariffs for the world’s economy, Germany’s breakthrough toward agreeing on a government did little for the common currency. Shares in Shanghai bucked the regional declines as China kept its 2018 growth target of around 6.5 percent.
The Italian election result and Germany’s move toward a coalition kick off a busy week for macro events. Both the Bank of Japan and European Central Bank will meet to decide on interest rate policy, while China hosts its National People’s Congress. Overshadowing it all, however, will be the next developments on global trade after U.S. President Donald Trump riled markets with his proposed tariffs last week.
Source: Bloomberg Pro Terminal
Jr Trader Alexander Kumanov
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