In Asian Equity Markets fell on Wednesday. Japan’s Nikkei 225 fell 0.73 percent while the Topix shed 0.69 percent. The losses were also seen in South Korea, where the Kospi declined by 0.57 percent. Meanwhile, the Hang Seng index in Hong Kong also fell by 1.54 percent. Shares of vehicle maker Baic Motor fell 9.29 percent following a Bloomberg report that Germany’s Daimler is considering increasing its stake in its joint venture with the Chinese firm. The Shanghai composite declined 0.21 percent while the Shenzhen composite was largely flat.
In Currency Markets sterling briefly fell to a 17-month low on Tuesday, before recovering ground to trade little-changed on the day, in a volatile session dominated by Brexit-related headlines. The British currency fell sharply after Prime Minister Theresa May’s government was found in contempt of parliament on Tuesday for refusing to release its full legal advice on Brexit, underlining the depth of opposition among lawmakers to her deal on leaving the European Union. The pound touched a low of $1.2659, down around half a percent on the day and its weakest since June 2017.
In Commodities Markets oil prices fell by around 2 percent on Wednesday, pulled down by swelling U.S. inventories and a plunge in global stock markets as China’s government warned of increasing economic headwinds. International Brent crude oil futures were at $60.87 per barrel, down $1.21, or 2 percent, from their last close. U.S. West Texas Intermediate (WTI) crude futures were at $52.31 per barrel, down 95 cents, or 1.8 percent. Oil prices were pressured by a weekly report from the API that said U.S. crude inventories rose by 5.4 million barrels in the week to Nov. 30, to 448 million barrels.
In US Equity Markets indices fell more than 3 percent on Tuesday, led lower by bank and industrial shares, as the U.S. bond market sent unsettling signs about economic growth and investors worried anew about global trade. The S&P 500 lost 3.24 percent, to 2,700.06 and the Nasdaq Composite fell 3.8 percent, to 7,158.43. The trade-sensitive industrial sector fell 4.4 percent, with Boeing and Caterpillar declining 4.9 percent and 6.9 percent, respectively. Financial shares, which are particularly sensitive to bond market swings, fell 4.4 percent.
In Bond Markets the difference between short-dated and long-dated U.S. Treasury yields narrowed further on Tuesday as the inversion of the yield curve spread between more maturities, prompted by worries about a slowdown in U.S. economic growth. The yield on the two-year note briefly rose above the three-year yield for the first time since January 2008. Two-year and three-year yields held above the five-year yield for a second day. The 10-year Treasury yield shed nearly 8 basis points, to 2.915 percent, after hitting its lowest level since Sept. 7.