LONDON, Aug 19 – European stocks fell on Friday and German government bond yields hit multi-week highs after German producer prices rose by the most.
* Asian markets have struggled to find direction and concerns about China’s growth have weighed on sentiment.
* European stocks opened in the red and sentiment was further hit by data showing German producer prices – a leading indicator of inflation – saw their biggest-ever rise in July as energy costs continued to rise. .
* Meanwhile, UK consumer confidence hit its lowest since at least 1974 in August, with a sense of exasperation over rising costs of living.
* “The world’s three main economic engines – the United States, Europe and China – are sputtering,” Berenberg’s economists wrote in a note to clients.
* “As China struggles with its unsustainable zero COVID-19 policy and a series of domestic financial imbalances, a tsunami of inflation is hitting the United States and Europe. Consumers across the Western world have rarely been more pessimistic,” he added. .
* As of 1040 GMT, the MSCI World Stock Index was down 0.3%. The pan-European STOXX 600 was down 0.4%, on track for a weekly decline of 0.4%.
* German bond yields rose. The 10-year note hit a one-month high of 1.202% as producer price data was seen as reinforcing fears of “stagflation”, a combination of high inflation and low growth.
* Wall Street was preparing to open lower. S&P 500 futures were down 1% and Nasdaq futures were down 1.2%.
* The dollar benefited from comments from the Federal Reserve and investors’ caution, hitting a one-month high. The dollar index gained 0.4% to 107.9 points, and the euro fell 0.3% to $1.0061.
* The yield on 10-year US Treasuries advanced, approaching a one-month high at 2.9335%.
* Oil prices fell 2% after rising for two days, on track for a weekly decline, as traders worried about slowing global demand.