In European Equity Markets the pan-European STOXX 600 closed provisionally down 1.2%. Autos and basic resources stocks were the worst performers. E.On and Centrica were the two notable companies reporting earnings on Monday. Britain’s largest energy supplier Centrica said it faces a challenging trading environment for the first half of the year due to a national cap on energy prices, warmer weather and weak U.K. gas prices. Gross revenue rose 54% in the first four months of 2019, and the company maintained its full-year guidance. Centrica shares were up 3%.
In Currency Markets the Chinese yuan fell to its lowest levels against the U.S. dollar since December on Monday as the trade war between the United States and China escalated, with each country putting new tariffs on the other’s goods. The yuan weakened to as far as 6.91, its lowest level since Dec. 24. China is expected to intervene to stop any plunge through 7 against the dollar. Sterling was little changed on Monday after a newspaper report suggested the British parliament might still reach a cross-party deal on Brexit.
In Commodities Markets oil prices rose more than 1% on Monday, lifted by growing concern over supply disruptions in the Middle East even as a standoff in the Sino-U.S. trade talks prompted investors to fret about the global economic outlook. Brent crude futures rose 83 cents to $71.45 a barrel, a 1.2 percent gain. U.S. WTI crude futures rose 69 cents to $62.35 a barrel, a 1.1 percent gain. Saudi Arabia on Monday said two Saudi oil tankers were among vessels attacked off the coast of the United Arab Emirates. It was unclear how the attacks occurred.
In US Equity Markets indices fell more than 2% on Monday after Beijing announced plans to retaliate with higher tariffs on U.S. goods, raising fears that another round of tit-for-tat measures could push the U.S. economy toward recession. The S&P 500 was down 2.12%, at 2,820.37 and the Nasdaq Composite fell 2.77%, at 7,697.52. Tariff-sensitive Boeing Co declined 2.9% and Caterpillar Inc dipped 4%. Shares of Uber Technologies Inc fell 7.4%, extending losses from Friday’s 7.6% fall in its first day of trading as a public company.
In Bond Markets U.S. Treasury yields fell to six-week lows on Monday as investors piled into low-risk assets after China announced plans to impose additional tariffs on U.S.-made goods in retaliation against a U.S. increase in duties on Chinese imports on Friday. The yield on the benchmark 10-year Treasury was 5.3 basis points lower at 2.4015% after touching 2.398%, the lowest since March 29. Ten-year yields fell below those on three-month Treasury bills. A sustained inversion of this part of the yield curve has preceded every U.S. recession in the past 50 years.