➤ Euro falls, Bund yields near zero on weak German data.
➤ Sterling edges up as EU offers to extend Brexit until May 22.
➤ Asian shares muted; European equities fall.
Sovereign bonds rallied and U.S. stock futures slumped with European equities as a spate of disappointing economic data stoked concerns of a global growth slowdown.
Yields on 10-year German Bunds tumbled 4 basis points to hover near zero percent, the lowest level since 2016, after private economic data pointed to a deeper contraction in Germany's manufacturing sector in March. The euro dropped 0.58% against the dollar to just under $1.131 as the downturn in German manufacturing also weighed on the eurozone-wide sector.
Ten-year Japanese government bond yields also dropped 4 basis points to negative 0.07% as manufacturing activity remained in contractionary territory in March, while yields on U.S. Treasurys with the same maturity slipped 5 basis points to below 2.49%. Moody's said the Federal Reserve, which this week signaled that it may not raise interest rates until 2020, could actually cut rates if 10-year yields drop below 2.4%.
Futures pointed to losses at the open on Wall Street as European equities dropped amid the economic concerns, while Asian stocks ended the session little changed.
The Shanghai SE Composite index closed virtually flat after slumping for most of the trading session, as DBRS revised the trend on China's issuer ratings to negative from stable, citing growing downside risks. Hong Kong's Hang Seng eked out a 0.14% gain at closing as Tencent Holdings Ltd. managed to rise 0.55% despite reporting lower online games revenue growth for 2018, while PetroChina Co. Ltd. slid more than 2% after reporting 2018 earnings.
Japan's Nikkei 225 returned from holiday with a 0.09% rise, while the MSCI index of Asia-Pacific stocks outside Tokyo ticked up 0.06%.
European stocks stumbled as German manufacturing data weighed on market sentiment, with the Stoxx 600 index declining 0.45%. Germany's DAX slumped 0.39%, France's CAC 40 fell 0.88% and the U.K.'s FTSE 100 slipped 0.89%.
Meanwhile, sterling stabilized as the European Union issued a new timetable for Brexit. The EU offered to postpone the U.K.'s departure from the bloc until May 22 if the country's Parliament hammers out a Brexit deal by next week. It also offered a new brake against a no-deal Brexit, giving London until April 12 to decide on its next course of action if its lawmakers again fail to reach an accord.
The pound rose 0.17% against the dollar after briefly trading lower. The dollar index advanced 0.27% amid weakness in the euro, while the Japanese yen strengthened 0.33% against the U.S. currency.
Brent crude oil slumped 1.05% to $67.15 per barrel on the ICE Futures Exchange. Gold increased 0.33% to $1,318.00 per ounce.
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The day ahead:
8:30 a.m. ET — Canada consumer price index (Econoday consensus: 0.6% month over month, 1.4% year over year)
8:30 a.m. ET — Canada (Econoday consensus: 0.4% month over month)
9:45 a.m. ET — U.S. PMI flash composite (Econoday consensus: 55.2)
10 a.m. ET — U.S. existing home sales (Econoday consensus: 5.1 million)
10 a.m. ET — U.S. wholesale trade (Econoday consensus: 0.1% month over month)
1 p.m. ET — U.S. Baker-Hughes rig count
2 p.m. ET — U.S. Treasury budget (Econoday consensus: $-227.0 billion)