NEW YORK (BLOOMBERG) - US futures tumbled and haven assets climbed on Monday (June 15), returning markets to last Thursday's risk-off mode, spurred by worries over a second wave of coronavirus infections that could dash hopes for a v-shaped recovery.
Futures on the S&P 500 slid over 2 per cent and European contracts were down about 2 per cent.
Japanese, Australian and Hong Kong stocks also slumped, with South Korea seeing outsize losses.
The dollar climbed along with the yen, and Treasuries advanced. Crude oil crumbled.
The moves suggested the stabilisation on Wall Street Friday in wake of a near 6 per cent stock slide may be temporary.
"We've gone risk-off because the reality of the U-shape pick-up" is hitting home, Mr David Bloom, global head of foreign-exchange strategy at HSBC Holdings Plc, said on Bloomberg TV. "It's a U-shape pick-up, and it's going to be slow and patchy" he said of the recovery.
Chinese economic data Monday showed the world's second-largest economy had a smaller bounce back in May than economists had expected, with retail sales continuing to drop and industrial output rising less than forecast.
On the virus front, more than 20 US states are seeing a pick-up in cases, Tokyo reported a jump over the weekend and a fresh outbreak in Beijing prompted officials to close a market there.
"The risk is that, globally, we get a second wave," said Mr Chris Iggo, the chief investment officer for core investments at AXA Investment Managers. "Now is the time to have that long-duration bond exposure in the portfolio."
These are some key events coming up:
- Policy decisions from the Bank of Japan, Bank of England and the Swiss National Bank are due this week.
- China on Monday releases industrial production and retail sales data for May.
- CBOE plans to open its trading floor, which has been electronic only since March 16.
- Federal Reserve Chairman Jerome Powell delivers his semi-annual policy report to Congress.
These are some of the main moves in markets:
Stocks S&P 500 futures fell 2.4 per cent as of 2.37pm in Tokyo. The S&P 500 advanced 1.3 per cent on Friday.
Japan's Topix index was down 1.8 per cent. Hong Kong's Hang Seng fell 1.9 per cent. Kospi Index dropped 3.2 per cent. Shanghai Composite lost 0.6 per cent.
Australia's S&P/ASX 200 Index, which tumbled almost 5 per cent the previous two sessions, was down 1.9 per cent. Euro Stoxx 50 futures retreated 2 per cent.
CURRENCIES
The yen edged up 0.2 per cent to 107.21 per dollar.
The offshore yuan slipped 0.2 per cent to 7.0913 per dollar.
The euro was at $1.1243.
The Bloomberg Dollar Spot Index rose 0.2 per cent.
BONDS
The yield on 10-year Treasuries fell about three basis points to 0.66 per cent.
Australia's 10-year yield fell four basis points to 0.86 per cent.
Commodities West Texas Intermediate crude dropped 4.6 per cent to $34.60 a barrel.
Gold was at $1,727 an ounce, down 0.2 per cent.
