Global Stocks Extend Losses
The markets remain quite muted at the beginning of the week, as markets in the US and Canada are shut. While US stock markets are open for trade on Monday, bond markets will remain closed in observance of Columbus Day.
US stock index futures pointed to a lower open, amid ongoing concerns that rising US Treasury yields are gradually making equities less attractive for investors. The decline in US futures is also likely being aided by sell-offs in Asia and Europe at the start of the week. China's stocks fell sharply on the first trading day after the week long holiday, with the Shanghai Composite ending its first day back almost 4% lower.
China's central bank announced on Sunday it would reduce the reserve requirement ratio (RRR) for most banks by one percentage point. The move to cut the amount of cash which most commercial and foreign banks must hold in reserve, to repay loans obtained via the central bank's medium-term lending facility, will take effect on October 15. The move by China's central bank, its fourth in 2018, came amid concerns about the economic impact of Beijing's ongoing trade war with Washington.
Italian politics remained an obstacle, as the European Commission warned the country's budget deficit breached past commitments, leading Rome to insist it would "not retreat" from its spending plans. Matteo Salvini (Italy's Deputy Prime Minister) stated today, that European Commission President Jean-Claude Juncker and Economics Commissioner Pierre Moscovici are enemies of Europe, further adding to negative sentiment on the markets.