Inventories decline as the virus continues to spread: the winding of markets

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(Bloomberg) – American and European equity futures fell back with Asian equities as the acceleration of the spread of the coronavirus at a number of sites outpaced some signs of economic improvement.

Inventories fell more than 1% in Japan, Australia and Hong Kong. They experienced a more modest decline in China, where markets reopened after two days of vacation. South Korean stocks fell 2% after the country’s finance minister ruled out another budget for this year. T-bills were little changed, while the dollar depreciated against its major peers. Crude oil has dropped.

Investors are preparing to continue last week’s sense of risk as coronavirus cases exceed 10 million worldwide and a resurgence in the United States continues to beat states like Texas, Arizona and Florida. The data overshadowed the data showing that Chinese industrial companies experienced the first monthly profit increase since November.

“The recovery is going to be much slower and much more patchy than most people think,” said David Hunt, president and CEO of PGIM Inc., on Bloomberg TV. “The markets are valued for a much sharper V-shaped recovery than we think is likely. “

At the same time, the central bank of China has announced that it will implement new monetary tools to ensure that liquidity reaches the real economy. The People’s Bank of China has said it will increase the proportion of small business loans, credit and manufacturing, and continue to lower lending rates.

Here are some key events to come:

New York Fed Chairman John Williams to Lead Discussion on Monday with IMF Managing Director Kristalina Georgieva and Federal Reserve Chairman Jerome Powell and US Treasury Secretary Steven Mnuchin the House Financial Services Committee. data collection problems that may seem to underestimate the true extent of unemployment. Friday brings the Independence Day of the United States. Markets are closed, as are government offices.

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these are the main market developments:

Stocks

The S&P 500 futures fell 0.3% at 7:07 a.m. in London. The Topix index in Japan fell 1.8%, the Hang Seng index in Hong Kong fell 1.4%, the Shanghai composite lost 0.8%, the Kospi in South Korea fell 2.2%, the S & P / ASX 200 index in Australia fell by 1.8%, the Euro Stoxx 50 fell by 1.8%. contracts lost 0.9%.

Currencies

The yen was 107.13 per dollar, up 0.1% .The offshore yuan rose 0.2% to 7.0726 per dollar. The euro bought $ 1.1256, up 0.3%. The Bloomberg Dollar Spot Index fell 0.1%.

Obligations

The yield on 10-year treasury bills remained at 0.64%. Australia’s 10-year yield increased by 0.8 basis points to 0.88%.

Raw materials

West Texas Intermediate crude oil lost 2.2% to $ 37.62 a barrel. Gold was $ 1,773.11 an ounce, little change.

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