European shares retreat after weak China data: Markets wrap

(Bloomberg) — European stocks and Asian shares fell as disappointing data from China renewed concerns about the country’s weak economic recovery.

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The Stoxx 600 fell 0.7%, a fifth day of declines, and U.S. stock futures fell. Treasuries slipped as currency trading resumed on Monday following a US holiday.

China’s services sector saw slower growth in August this year, an industry survey showed, as the economic recovery is losing traction and dampening earlier confidence in government stimulus measures. The MSCI Asia Pacific index headed for its first drop in seven days, with Hong Kong shares falling after falling more than 1%. The offshore yuan weakened.

IG Markets Ltd in Melbourne. “It’s a typical post-party reality check cooling China’s rally today as services PMI missed expectations, suggesting further economic slowdown ahead,” said Hebei Chen, analyst at

At the same time, Country Garden Holdings told lenders it had paid coupons on two dollar bonds within their grace period. The troubled developer, which has come to symbolize China’s property woes, is also proposing to extend principal payments on eight yuan bonds, according to holders who said they had been briefed by company advisers.

Traders are now turning their attention to August PMI data from the Eurozone. European Central Bank President Christine Lagarde avoided signaling whether policymakers would raise or hold interest rates next week in a speech on Monday.

Goldman Sachs Group Inc. A US recession lowered the probability estimate. “Continued positive inflation and labor market news led to a further reduction in our estimated 12-month US recession probability to 15%, down 5pp from our previous estimate,” its chief economist John Hutchesus wrote in a note.

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Elsewhere, Brent crude fell for the first day in six, trading down 0.3% at $88.71 a barrel. Expectations of further supply cuts from OPEC+ pushed prices to their highest level since November. Gold fell.

Highlights of this week:

  • Eurozone S&P Global Eurozone Services PMI, PPI, Tuesday

  • US factory orders, Tuesday

  • A panel led by ECB President Christine Lagarde focused on central banks and international sanctions at the ECB legal conference on Tuesday.

  • Australia GDP, Wednesday

  • Euro zone retail sales, Wednesday

  • German factory orders, Wednesday

  • US Business, Wednesday

  • Canada rate decision, Wednesday

  • Bank of England Governor Andrew Bailey testified before the UK Parliament’s Treasury Select Committee on Wednesday.

  • The Federal Reserve publishes its Page Book economic survey on Wednesday

  • On Wednesday, Boston Fed President Susan Collins speaks about the economy at the New England Council

  • China trade, foreign exchange balance, Thursday

  • Eurozone GDP, Thursday

  • US Initial Jobless Claims, Thursday

  • Bank of Canada Governor Tiff Macklem speaks on Thursday about the economic development report

  • New York Fed President John Williams participates in a moderated discussion at the Bloomberg Markets Forum on Thursday

  • Atlanta Fed President Raphael Bostic speaks Thursday at Broward College about the economic outlook.

  • Japan GDP, Friday

  • France industrial production, Friday

  • Germany CBI, Friday

Some key movements in the markets:

Shares

  • The Stoxx Europe 600 was down 0.7% as of 8:20 a.m. London time.

  • S&P 500 futures fell 0.3%

  • Nasdaq 100 futures fell 0.2%

  • Futures for the Dow Jones industrial average fell 0.3%

  • The MSCI Asia Pacific index fell 0.7%

  • The MSCI emerging market index fell 0.8%

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Coins

  • The Bloomberg Dollar Spot Index rose 0.4%

  • The euro fell 0.3% to $1.0764

  • The Japanese yen fell 0.3% to 146.90 per dollar

  • The offshore yuan fell 0.3% to 7.2988 per dollar

  • The British pound fell 0.3% to $1.2591

Cryptocurrencies

  • Bitcoin fell 0.6% to $25,681.94

  • Ether fell 0.4% to $1,620.96

Bonds

  • The yield on 10-year Treasuries rose three basis points to 4.21%.

  • Germany’s 10-year yield was little changed at 2.58%

  • Britain’s 10-year yield was little changed at 4.46%

materials

  • Brent crude was down 0.5% at $88.58 a barrel

  • Spot gold was down 0.3% at $1,937.41 an ounce

This story was produced with the help of Bloomberg Automation.

–With assistance from Georgina McKay.

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