A look at the day ahead in European and global markets |
|
| By Tom Westbrook, Chief Correspondent |
|
|
U.S. stocks finally caught up overnight with what currency and bond markets have been saying for several weeks: A slowdown is coming. The Nasdaq's 4% fall was its steepest in two-and-a-half years. Bond yields fell sharply and markets are now pricing in a roughly 50-50 probability of the Fed cutting rates in May. Tesla shares have halved since their post-election peaks and the dollar, which had been rising in anticipation of Donald Trump's policies, has now begun sliding as he slaps tariffs on his neighbours. |
|
| Shipping containers are seen at the port of Oakland, as trade tensions escalate over U.S. tariffs, in Oakland, California, U.S., March 6, 2025. REUTERS/Carlos Barria |
The so-called "Trump trade" is in full retreat and the "Trump put", or the expectation that he may be sensitive to falls in the stock market, is so far nowhere to be seen. Citi downgraded its U.S. asset allocation recommendation, cutting stocks to "neutral" from "overweight" after the market closed, saying that for the next few months at least it's not clear that the U.S. economy's outperformance can continue. Asian markets did their best to steady the ship, helped a bit because it's everywhere outside the U.S. that stands to benefit from any repatriation flows from dumped U.S. assets. |
|
| Stocks in Tokyo, Seoul, Hong Kong and Sydney were off their early lows by the afternoon, but the mood was skittish. U.S. equity futures also fell in early trade and, while recovering their losses, are struggling to make much headway beyond flat. The scene in currency markets was quiet. The yen has been rising for weeks and inched to a new five-month peak in the Asia session - although, as some dealers noted, it's stocks catching up to the move in dollar/yen rather than the other way around. The euro, too, has shown little reaction to Germany's Greens promising to block plans for increased military spending, perhaps in anticipation of a compromise deal. |
Graphics are produced by Reuters. |
|
|
Key developments that could influence markets on Tuesday: |
- Earnings: Volkswagen, TP ICAP
- Economics: U.S. Jolts
|
|
|
Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias. |
Morning Bid is sent every weekday morning. Think your friend or colleague should know about us? Forward this newsletter to them. They can also sign up here. Want to stop receiving this email? Unsubscribe here. To manage which newsletters you're signed up for, click here. Terms & Conditions and Privacy Statement |
|
|
|
Comments