In European Equity Markets the pan-European Stoxx 600 closed 5.1% lower, off lows hit earlier in the session. Travel and leisure stocks plummeted around 10% to lead losses as all sectors and major bourses ended the day in the red. Airlines and travel companies continued to suffer on Monday, although by the end of the day had pared some losses. Tui shares ended down around 13%, EasyJet shed 19%, Air France KLM fell 10% and British Airways parent IAG tumbled 27% after hitting 52-week lows.
In Currency Markets sterling stumbled against the U.S. dollar and euro on Monday in volatile trading as money markets digested a further surprise cut to U.S. rates to rock-bottom levels by the Federal Reserve in the face of the coronavirus pandemic. The Fed cut to a target rate of 0% to 0.25% on Sunday, while five other central banks including the Bank of England took steps to relieve a shortage of dollars and provide extra liquidity as part of a coordinated global action. The pound held at its lowest level since early October at $1.2215 and was last down 0.5%.
In Commodities Markets oil prices fell below $30 a barrel on Monday as the worldwide coronavirus outbreak worsened over the weekend, leading governments and businesses to shut down as the global economy appeared to be headed toward certain recession. At the same time, Saudi Arabia reiterated its plans to boost production in response to a developing price war with its rival Russia after efforts to restrict supply failed earlier this month. Brent crude was down $3.35, or 9.9%, to $30.50 a barrel.
In US Equity Markets indexes fell about 7% on Monday, as the Federal Reserve’s drastic interest rate cut to near zero stoked fears of a coronavirus-driven recession. Rate-sensitive financial stocks fell 9.3%, leading declines among the major S&P sectors. The sector also came under pressure after the big U.S. banks said they would stop buying back shares. The S&P 500 retail index fell 9.3% as Nike Inc, Lululemon Athletica Inc and Under Armour Inc said they would close stores in the United States and some other markets.
In Bond Markets U.S. government bonds yields fell on Monday morning after the Federal Reserve announced that it would slash interest rates to near zero, but the moves were modest as investors worried that Treasuries would sell off as they did last week. The 10-year yield rose 24.7 basis points last week, and the 30-year yield rose 35.2 basis points. Yields move inversely to price. The yield on the 30-year bond was down 13.9 basis points to 1.439%.