European shares open lower, FTSE leads losses

Galtero Lara
Setiembre 11, 2019

However, concern has been building that ECB policymakers and other global central banks are reaching the limits of stimulus policies, especially those with negative interest rates and sub-zero long-term sovereign bond yields.

"Bond markets have priced in much of the gloomy outlook and made assumptions that additional stimulus is going to be provided by the European Central Bank, so the scope for disappointment is there if the European Central Bank doesn't provide as much as desired", said Stewart Robertson, senior economist at Aviva Investors. Also helping Frankfurt-listed shares close 0.3% higher, a report said Germany was considering the creation of a "shadow budget" that would enable Berlin to boost public investment beyond the restrictions of constitutionally enshrined debt rules, sources told Reuters.

Europe's largest economy is teetering on the brink of recession, but strict national spending rules have tied policymakers hands on fiscal policy.

The US Federal Reserve is also widely expected to cut interest rates next week as policymakers race to shield the global economy from risks, which also include Britain's planned exit from the European Union.

Data showing China's mainland factory-gate prices shrank at their fastest pace in three years, as flagging demand at home and overseas forced some businesses to slash prices, saw Asian bourses slip lower.

The pan-European STOXX 600 index () opened higher but was down 0.1% as losses in the airlines and commodities sectors outweighed gains in oil and auto stocks. -China trade talks further brightened sentiment.

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China's producer price index fell 0.8% in August year-on-year, official data showed on Tuesday, its sharpest decline since August 2016 as flagging demand at home and overseas forced some businesses to slash prices.

"The move in bond yields will affect share prices, but its still uncertain how stocks will react".

On Wall Street, stocks were lower, weighed down in part by technology shares as data from China showing producer prices had their sharpest pace of declines in three years in August renewed global recession worries.

The dollar index .DXY rose 0.1%, with the euro EUR= down 0.05% to $1.1041.

The pound traded steady near a six-week high of $1.2385 after a law came into force demanding that Prime Minister Boris Johnson delay Britain's departure from the European Union unless he can strike a divorce deal with the bloc.

USA crude traded at $57.97 a barrel after hitting the highest since July 31. Brent crude futures climbed to $63.23 a barrel.

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