European shares plunge, bond rout sounds alarm bells

Bangkok Post Group

European shares fell on Wednesday as steep U.S. reciprocal tariffs kicked in, exacerbating fears over the economic damage caused by the trade war that even spread to the bond market. - REUTERS

Transcript

00:00European shares fell on Wednesday as the rollout of steep US retaliatory tariffs deepened

00:05fears of economic damage.

00:07The Pan-European Stock 600 slumped over 2 per cent in morning trade as the previous session's

00:13rally fizzled out.

00:15The trade-sensitive German DAX index also fell by a similar amount.

00:19The Stock 600 is currently about 15.5 per cent below its all-time closing high and nearing

00:25the 20 per cent threshold that will confirm a bear market.

00:29Rate-sensitive banks also slumped Wednesday as traders fully priced in an interest rate

00:33cut from the European Central Bank next week.

00:37US President Donald Trump's reciprocal tariffs, including a 20 per cent levy on select European

00:42Union goods, took effect on Wednesday.

00:45The 27-member bloc was due to vote on initial countermeasures later in the day.

00:50European farmer giants Roche Novartis and Novo Nordisk all dropped over 5 per cent after

00:56the American president reiterated plans of a major tariff on all pharmaceutical imports.

01:02The concerns also spilled over into bond markets.

01:05US Treasuries extended heavy losses on Wednesday in a sign investors are dumping even their safest

01:11assets.

01:12The 10-year US Treasury yield, the globe's benchmark safe-haven anchor, was unmoored.

01:18And long bonds were the focus of intense selling from hedge funds.

01:21The yield crossed 4.5 per cent at one point, even as traders ramped up expectations for

01:27US rate cuts.

01:28And in another signal of dislocation in the markets, the dollar fell against the euro and

01:33yen.

Category

Transcript

Recommended