Asian stocks and oil fell for the second consecutive day while the euro is experiencing its worst week since the start of the year. Evidently the actions of the European and Chinese central banks have not convinced investors who fear that such moves are not enough to generate economic growth. Bond risk rose in Asia ahead of US employment data.
THEMSCI Asia Pacific index it lost 0,5% as of 12:14 in Tokyo. Hong Kong's Hang Seng index lost 0,4%, mainly due to the performance of the banking sector on fears that such low levels of rates could erode profits next year. The euro is at 1,238 against the dollar after hitting a monthly low of 1,2364 yesterday. Oil fell 0,8% in New York, while corn fell 1,7%.
Yesterday the ECB cut its benchmark rate to an all-time low of 0,75% and the People's Bank of China cut borrowing costs for the second time in a month. The US Labor Department could today reveal a slowdown in hiring in the second quarter and an unemployment rate of 8,2 percent.
“There is weakness all over the world – commented Stephen Roach, a professor at Yale University and former non-executive chairman of Morgan Stanley in Asia. "When you see such low levels of interest rates, you don't expect economies to recover quickly."
