In European Equity Markets indices worst one-day drop in history on Thursday, as investors reacted to President Donald Trump’s decision to impose restrictions on travel to the U.S. from Europe, and the European Central Bank’s decision not to cut interest rates. The pan-European Stoxx 600 had fell 11% by the close, with travel and leisure stocks sinking 12.8% following Trump’s announcement of a ban on European travel. The U.K.’s FTSE 100 lost 9.8%, France’s CAC 40 shed 12.3% and Germany’s DAX fell 12.2%
In Currency Markets sterling tanked to five-month lows on Thursday, weighed down by worsening market turmoil after U.S. President Donald Trump slapped restrictions on travel from Europe and European Central Bank stimulus measures fell short of expectations. The U.S. flight ban exempts Britain but has been seen as a sign of an escalating crisis. Sterling slid 1.8% to $1.2584, its weakest since October. The pound also fell to 89.12 pence per euro, its lowest level against the single currency since October.
In Commodities Markets oil prices fell, with Brent crude sliding 8% on Thursday after U.S. President Donald Trump unexpectedly announced restrictions on travel from Europe in an attempt to halt the spread of coronavirus after the WTO described the outbreak as a pandemic. Brent crude was down $3.02, or 8.4%, at $32.77 a barrel. U.S. crude was down $2.02, or 6.1%, at $30.96. The decline in oil is being compounded by the threat of a flood of cheap supply after Saudi Arabia and the United Arab Emirates said they would raise output in a stand-off with Russia.
In US Equity Markets the Dow was on course for its worst day since 1987 as President Donald Trump’s sweeping move to restrict travel from Europe added to growing signs of corporate distress in the face of the coronavirus pandemic. The S&P 500 was down 7.98%, at 2,522.73. The Nasdaq Composite fell 7.75%, at 7,335.49. Trading on Wall Street was halted minutes after the opening bell with the S&P 500 sliding 7% and triggering a 15-minute cutout as traders fled to the perceived safety of bonds and the Japanese yen.
In Bond Markets U.S. Treasury yields fell on Thursday as stocks took another beating and anticipation grew for aggressive easing on the part of the Federal Reserve to help deal with the economic fallout from the spreading coronavirus. The 10-year note yield was last at 0.666%, down from 0.822% at Wednesday’s close. In an effort to address liquidity concerns, the New York Federal Reserve raised the overnight repurchase agreement (repo) operation limit twice this week.