Global stocks wilt as Fed shift sparks stampede into bonds

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Asian shares rise on Fed dovishness; growth concerns linger

LONDON - European shares wilted and there was a stampede into bonds on Thursday, after the U.S. Federal Reserve’s abandonment of all plans to raise rates this year left traders wondering what might be lurking in the shadows.

Banks suffered their usual worries about low borrowing rates to drag the pan-European STOXX 600 down 0.2 percent, though London’s FTSE edged up as its miners were lifted by higher copper and metals prices.With investors rushing to price in the prospect of U.S. rate cuts later this year, benchmark Treasury yields dived to their lowest since early 2018 and those on German Bunds - Europe’s benchmark - to the lowest since October 2016.

“The Fed has the most leeway because it has raised rates nine times so it could cuts rates nine times,” Marey said. “But it will be much more difficult for other central banks which haven’t even started to hike yet.” That all left the dollar at 96.100 against a basket of currencies, having lost 0.5 percent overnight. It was also poised precariously on its 200-day moving average, and a sustained break would be taken as technically ‘bearish’.

U.S. President Donald Trump on Wednesday warned that Washington may leave tariffs on Chinese goods for a “substantial period” to ensure Beijing’s compliance with any trade deal.Global growth worries extended to commodity markets, where oil prices, which had jumped Wednesday on supply concerns, retreated.

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