(Bloomberg) — European stocks dropped as the region’s leaders struggled to finalize a long-term plan for cushioning the economic blow from the coronavirus. U.S. equity futures and Asian shares slipped while Treasuries and the dollar gained.Energy and banking shares dragged the Stoxx Europe 600 Index lower after European leaders signed off on a 540 billion-euro ($580 billion) plan tackling the immediate fallout from the pandemic, but failed to come up with a longer-term rebuilding program. Italian government bonds fell. Underscoring the challenges, data showed German business confidence fell to record low while virus cases in the region’s biggest economy rose by the most in nearly a week.Futures on the three main American equity gauges pointed to losses at the open on Wall Street, while stocks from Tokyo to Shanghai retreated. Oil reversed gains to trade at about $16 a barrel in New York, after collapsing earlier this week.A global stock rally built on optimism that infection rates were slowing is beginning to fade amid mounting evidence of a deep economic slowdown. Total job losses in the U.S. now exceed 26 million.“The recent price action in global markets has highlighted the fragility of the risk rally in the face of deteriorating global economic data and weak commodity prices,” Valentin Marinov, the head of G10 FX strategy at Credit Agricole CIB in London, wrote in a note to clients. Still, “the recent global monetary and fiscal stimulus measures have put a ‘floor’ under the risky assets,” he said.In China, there was limited reaction to the central bank’s partial roll-over of maturing medium-term funding to banks, at a lower interest rate.Japanese bonds rallied after a Nikkei report that the Bank of Japan may replace its government bond-purchase target to allow for unlimited buying.These were the main moves in markets:StocksThe Stoxx Europe 600 Index fell 1.3% as of 9:21 a.m. London time.Germany’s DAX Index decreased 1.8%.Futures on the S&P 500 Index dipped 0.4%.The MSCI Asia Pacific Index declined 0.7%.CurrenciesThe Bloomberg Dollar Spot Index rose 0.3% to 1,264.34.The euro decreased 0.3% to $1.0747.The British pound declined 0.3% to $1.2311.The Japanese yen weakened 0.1% to 107.70 per dollar.BondsThe yield on 10-year Treasuries declined one basis point to 0.59%.Britain’s 10-year yield declined two basis points to 0.271%.The spread of Italy’s 10-year bonds over Germany’s climbed 13 basis points to 2.531 percentage points.CommoditiesWest Texas Intermediate crude decreased 3.5% to $15.93 a barrel.Brent crude declined 1.8% to $20.95 a barrel.Gold weakened 0.2% to $1,726.94 an ounce.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
