New quarter, same struggles for stocks, bonds and yen
By Marc Jones
LONDON (Reuters) — World markets struggled to put a testing third quarter behind them on Monday, with stocks and the euro ticking lower, bonds still on edge and a last-minute deal to avert a U.S. government shutdown barely lifting Wall Street futures.
A opening move higher from the pan-European STOXX 600 quickly gave way in the face of some weak PMI data, denting traders' hopes for its first three-session run of back-to-back gains since the middle of August.
MSCI's 47-country world index was also lower, having lost 7% since July amid a sharp rise in oil prices and global borrowing costs (EU). The updated euro zone September PMI data — seen as a key indicator of economic health — showed manufacturing activity remains in a broad-based downturn.
It was enough to nudge the euro back into the red for the day. It, like many of the major global currencies, had fallen over 3% in the third quarter, unable to fend off irresistible U.S. dollar strength built on ongoing Federal Reserve interest rate rises.
Markets in China, Hong Kong and India were closed for holidays but Tokyo's open-for-business Nikkei jumped as much as 1.7% as the yen dribbled back towards 150-per-dollar, a weakness viewed as a boon for Japan's exporters.
«We have had two big risk-off months and you have a risk-on event with the (U.S. government) shutdown being postponed but the 10-year Treasury is at 4.62% and the yen is near 150 so nothing has really changed,» said Societe Generale (OTC:SCGLY) analyst Kit Juckes.
Marginally higher oil prices and debt pressures meant benchmark European government bond yields were also edging higher again, with Germany's 10-year Bund level within striking distance of a 12-year high of 2.86% hit late last week.
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