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European stocks extend losses as slowdown warnings weigh

European stocks extend losses as slowdown warnings weigh
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LONDON, Sept 16 (Reuters) – European stocks slumped on Friday and the benchmark European yield on 10-year German bonds hit their highest level since mid-June as investors braced for a US interest rate hike amid warnings from the US World Bank and International Monetary Fund fears fueled a slowdown.

The World Bank’s chief economist said Thursday he was concerned about a period of low growth and high inflation in the global economy. The International Monetary Fund said downside risks continue to dominate the global economic outlook, but it is too early to say if there will be a widespread global recession. Continue reading

Wall Street sold off on Thursday after US economic data gave the Federal Reserve little reason to ease its aggressive stance on interest rate hikes. Continue reading

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The dovish tone continued during Asian trading, with data showing that China’s real estate sector had continued to shrink over the past month. Continue reading

As of 0815 GMT, the MSCI world stock index, which tracks stocks in 47 countries, was down 0.5% on the day and faced a fourth straight day of losses. (.MIWD00000PUS)

Europe’s STOXX 600 fell 1.2% (.STOXX) and London’s FTSE 100 (.FTSE) 0.1% lower. The German DAX lost 1.8% (.GDAXI). Continue reading

Markets have priced in a 75 percent chance of a 75 basis point rate hike and a 25 percent chance of a 100 basis point hike when the Fed meets next Wednesday.

In the UK, retail sales fell more-than-expected in another sign that the economy is slipping into recession as the cost-of-living crisis squeezes households’ disposable spending. Continue reading

“We are now seeing data that confirms that the economy is indeed slowing down,” said Axel Rudolph, market analyst at IG Group.

“I expect stocks to dip back below their March lows. If you’re in an environment where you have central banks aggressively raising rates, historically that has always led to bear markets.”

The pound weakened to a 37-year low against the US dollar. Continue reading

The US dollar index rose 0.3% to 110.13, still hovering near a 20-year high and steady against the yen at 143.365.

According to market analysts and fund managers, the yen could plummet to a three-decade low before the end of the year. Continue reading

Dollar strength pushed China’s offshore yuan above 7 per dollar for the first time in nearly two years. Continue reading

The euro was slightly lower at $0.9961. Yields on two-year German bonds hit a new 11-year high after the European Central Bank’s vice president said an economic slowdown in the euro zone would not be enough to control inflation and the bank would have to keep raising interest rates. Continue reading

Germany’s benchmark 10-year bond rose 3 basis points on the day to 1.765% – after hitting its highest level since mid-June in early trade.

Oil prices edged higher but were on track for a weekly decline on fears of a slowdown in demand. Continue reading

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Reporting by Elizabeth Howcroft; Edited by Sherry Jacob Phillips

Our standards: The Thomson Reuters Trust Policy.

Elizabeth Howcroft

Thomson Reuters

Covering the intersection of finance and technology, including cryptocurrencies, NFTs, virtual worlds and the money-making Web3.

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