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European stock markets fell for the third consecutive trading day, and Wall Street stocks appear to follow them lower, as traders expect the European Central Bank to begin to scale back its monetary stimulus measures in response to the crisis.
The Stoxx Europe 600 Index fell 0.7%, its biggest decline in three weeks following Wednesday. The London FTSE 100 index fell 1.1%, and the futures market hinted that the Wall Street S&P 500 index would fall 0.4% in early New York trading.
For months, the market has been watching when the world’s most influential central bank, the Federal Reserve, may announce a reduction in its pandemic bond purchase plan, which has reduced borrowing costs and increased stock valuations since March 2020.
Now, analysts expect the European Central Bank to take the lead in its 185 million euro emergency plan to dominate Broad forecast At the meeting later on Thursday, it will reduce the amount of government and corporate bond purchases from 80 billion euros per month to around 60 billion euros.
The main interest rate in the Eurozone, which defines the borrowing costs of businesses and households, and How investors value The company’s future cash flow is at a historical low of minus 0.5%.
“The challenge for the European Central Bank is to convince the market that reduction is not the same as tightening,” said Trevor Greetham, investment strategist at Royal London.
He added: “In theory, they will still print money, just a little less.” “But it can be seen as a precursor to a rate hike.”
The yield on German 10-year government bonds stabilized at minus 0.323%, close to the highest level since mid-July. The yield is inversely proportional to its price and serves as a benchmark for borrowing costs in the Eurozone.
Fed officials also said in recent days that the Fed may follow the example of the European Central Bank. St. Louis Fed President James Brad told the British “Financial Times” that the gradual reduction of monetary stimulus measures “will begin this year.”
In a virtual event on Wednesday, Dallas Fed President Robert Kaplan stated that the monthly bond purchases of $120 billion should be gradually reduced from October.
After the rating agency Fitch, the Chinese market has deteriorated Said As the world’s most indebted real estate developer, Chinese real estate developer Evergrande is “very likely” to default.
Hong Kong’s Hang Seng Index fell 2%, South Korea’s Kospi 200 Index fell 1.8%, and Tokyo’s Topix Index fell 0.7%.
Compared with the same period last year, the price of Chinese factory gates increased by 9.5% in August, which was the largest increase since 2008 and heralded the outbreak of highs. inflation The United States and the Eurozone may continue.
Greetham said that while the global economic recovery from the coronavirus appears to be slowing down, central banks are facing pressure to control stimulus measures and control inflation.
China’s manufacturing activities Sign up This is the first time since April 2020 last month.In its Beige book In an economic summary released on Wednesday, the Federal Reserve stated that due to concerns about the highly contagious strain of the Coronavirus Delta virus, people’s dining out and travel have decreased, so there is a “slightly slower growth” in the summer.
The 10-year U.S. Treasury bond yield fell 0.02 percentage points to 1.324%. The euro held steady against the dollar, buying $1.182. The oil benchmark Brent crude oil was flat at US$72.55 per barrel.