European Stocks Head for Longest Run of Losses in Over Five Years

(Bloomberg) — European stocks are on track for their longest run of losses in more than five years. This comes after weak German economic data and a strengthening dollar as investors anticipate further Federal Reserve policy tightening.

German Economic Data Causes Retreat in European Stocks

• The Stoxx 600 gauge is retreating for a seventh consecutive day.
• German industrial output declined again in July, further impacting Europe’s largest economy.

Dollar Strengthens with Eighth Consecutive Week of Gains

• The Bloomberg dollar index is set for its longest ever run of increases.
• This streak of gains dates back to 2005.

Risk-off Sentiment Intensifies with China’s Plan to Ban iPhones

• US equity futures face downward pressure as China plans to ban iPhones from certain government departments and state-backed agencies.
• This poses a blow to Apple Inc.

Treasury Yields Increase Following Positive US Services Index

• Treasury yields are drifting higher, extending Wednesday’s increases.
• Data from the Institute for Supply Management’s US services index shows growth in August.
• Economists have been boosting their forecasts for US gross domestic product.

Fed Officials May Scale Back Rate Cut Estimates

• Strong economic reports prompt economists to revise their GDP forecasts for the US.
• Traders have reduced bets on the degree of Fed easing they expect next year.

Risk-off Sentiment Spills into Asian Markets

• All major Asian markets experience declines.
• Chinese stocks, particularly property developers, are among the worst performers.

Commodities Experience Mixed Results

• Oil declines, snapping a nine-day winning streak.
• Gold edges higher after a drop on Wednesday.

Upcoming Key Events

• China forex reserves
• Eurozone GDP
• US initial jobless claims
• Bank of Canada Governor Tiff Macklem to speak on the Economic Progress Report
• Atlanta Fed President Raphael Bostic speaks
• New York Fed President John Williams participates in moderated discussion at the Bloomberg Market Forum
• Japan GDP
• Germany CPI
• US wholesale inventories and consumer credit

Main Market Moves

Stocks

• The Stoxx Europe 600 fell 0.4%
• S&P 500 futures fell 0.3%
• Nasdaq 100 futures fell 0.5%
• Futures on the Dow Jones Industrial Average fell 0.2%
• The MSCI Asia Pacific Index fell 0.7%
• The MSCI Emerging Markets Index fell 0.7%

Currencies

• The Bloomberg Dollar Spot Index rose 0.1%
• The euro fell 0.2% to $1.0710
• The Japanese yen rose 0.1% to 147.46 per dollar
• The offshore yuan fell 0.2% to 7.3328 per dollar
• The British pound fell 0.3% to $1.2473

Cryptocurrencies

• Bitcoin rose 0.3% to $25,745.36
• Ether rose 0.5% to $1,635.96

Bonds

• The yield on 10-year Treasuries was little changed at 4.28%
• Germany’s 10-year yield was little changed at 2.65%
• Britain’s 10-year yield declined two basis points to 4.51%

Commodities

• Brent crude fell 0.3% to $90.34 a barrel
• Spot gold rose 0.1% to $1,918.51 an ounce

This story was produced with the assistance of Bloomberg Automation.

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