There's another global stock rout, oil is tumbling, and Sweden cuts its rate further into negative territory. Here are some of the things people in markets are talking about today.
Global stock rout
It's a grim day for equities. Markets in Hong Kong opened for the first time this week and had their worst start to a lunar new year since 1994, falling 3.9 percent. The MSCI Asia Pacific excluding Japan Index lost 2.2 percent. The Europe Stoxx 600 dropped as much as 4 percent before paring some losses to trade 2.8 percent lower at 10:47 a.m. London time. U.K. stocks slumped to a 4-year low led by bank shares. Standard & Poor’s 500 Index futures dropped 1.8 percent.
Bond yields fall to record lows
U.K. government 10-year bonds rose with the Gilt yield dropping to a record low of 1.306 percent. In Germany, the two-year yield fell to as low as minus 0.545 percent and the five-year yield to minus 0.341 percent, both records as HSBC Holdings Plc cut their 10-year bund yield forecast to 0.05 percent. On the flipside, the yield on Portugal's 10-year jumped 40 basis points to 4.08 percent as Socialist Prime Minister Antonio Costa faces EU demands to continue fiscal discipline.
Oil falls, again
Oil is trading near a 12-year low, with West Texas Intermediate dropping over 16 percent in the last five sessions. WTI for March delivery was at $26.42 a barrel, down $1.01 at 11:09 a.m. London time. Plunging oil prices have reduced the value of reserves of energy-producing countries and companies by tens of trillions of dollars.
Sweden cuts rates
In her testimony to Congress yesterday, Federal Reserve Chair Janet Yellen was not certain whether she had the legal authority to cut rates into negative territory. There are no such questions in Sweden, as the Riksbank surprised analysts by cutting its main repo rate to minus 0.5 percent, from minus 0.35 percent this morning. The Swedish currency weakened against the euro immediately following the cut, but had given back most of the losses to trade 0.3 percent lower at 11:30 a.m. London time.
Bullion for immediate delivery gained 2.9 percent to $1,226.36 an ounce at 11.30 a.m. London time. With the metal now $163 dollars an ounce higher so far in 2016, gold mining stocks are the one bright spot in European equities this morning, with Randgold Resources Ltd. and Fresnillo Plc climbing more than 4.5 percent.
What we've been reading
This is what's caught our eye over the last 24 hours.
- Oil is the cheap date from hell.
- Worst still ahead for mining industry hit by $1.4 trillion loss.
- Japan is closed today, but that hasn't stopped the yen surging.
- Do falling markets pose a serious threat to the U.S. economy?
- Bass says China bank losses may top 400 percent of subprime crisis.
- HSBC's ends global pay freeze after less than two weeks following employee feedback.
- Spuds to the rescue in Russia.
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