In European Equity Markets the pan-European Stoxx 600 fell 1 percent at the close, with the majority of regional sectors trading in negative territory. All major bourses were sharply lower. Europe’s construction and material stocks were among the worst performers, down more than 1.75 percent amid growing trade war concerns. France’s Saint-Gobain fell over 3 percent after J.P. Morgan cut its stock recommendation to “neutral” from “overweight.” Another industry to lead the losses was insurance, which was down 1.75 percent.
In Currency Markets the Canadian dollar weakened to one-and-a-half-year low against its U.S. counterpart on Wednesday as investors slashed expectations for further interest rate hikes from the Bank of Canada after a dovish interest rate announcement from the central bank. The Canadian dollar was trading 0.8 percent lower at 1.3377 to the greenback, or 74.76 U.S. cents. The currency touched its lowest since June 2017 at 1.3400. Chances of a hike in January fell from about 60 percent before the data to 36 percent, the overnight index swaps market indicated.
In Commodities Markets oil prices rose more than 1 percent on Wednesday ahead of a meeting of the world’s biggest exporters who will discuss cutting output to help shore up prices and curb excess supply. The OPEC, Russia and other producers will meet in Vienna this week to discuss a potential cut in production. Saudi Arabia has indicated it wants OPEC and its allies to cut output by at least 1.3 million barrels per day. Brent crude futures rose to $62.97 a barrel, a 1.4 percent gain. U.S. West Texas Intermediate (WTI) crude futures rose to $54.07 a barrel, a 1.5 percent gain.
In US Equity Markets trading was closed on Wednesday to honor former U.S. President George H.W. Bush, who died last Friday.
In Bond Markets Canadian government bond prices were higher across the yield curve, with the two-year price up 13 Canadian cents to yield 2.048 percent and the 10-year rising 38 Canadian cents to yield 2.126 percent. The 10-year yield hit its lowest intra-day since July 19 at 2.118 percent. The Bank of Canada kept its benchmark interest rate on hold at 1.75 percent, as expected, and said there might be more room for non-inflationary growth, suggesting the pace of future hikes could be more gradual.