Asian stocks tumbled overnight, putting a break on the previous global rally. The yen climbed, while the pound declined and crude slumped.
Chinese shares led declines in Asia, while European and U.S. index futures also retreated. The yuan weakened after the People’s Bank of China lowered its daily reference rate by the most in six weeks. Sterling dropped 0.3 percent, after plummeting Monday by the most since 2009 on concern over Britain’s possible exit from the European Union. On Wall Street, oil fell after surging above $33 a barrel on Monday, while nickel and zinc led industrial metals lower.
This month’s first indicators for China showed private gauges of manufacturing and services falling to new lows while business confidence slipped. Britain’s referendum on its EU membership in the European Union is raising currency-market risks across the continent.
According to Toshifumi Sugimoto, chief investment officer at Capital Asset Management in Tokyo, “If there’s something dramatic in the Chinese market, then normally people buy U.S. Treasuries. The Chinese economy is not doing well.”
Currencies and Oil
Meanwhile, the yuan fell 0.08 percent to 6.5283 a dollar, according to China Foreign Exchange Trade System prices. The People’s Bank of China lowered the daily reference rate for the yuan by 0.17 percent, the most in six weeks.
The pound traded at $1.4109, while the euro added 0.1 percent.
The yen gained 0.5 percent to 112.33 per dollar, rallying from a decline Monday. Options traders are close to the most bullish on the yen since 2011, pricing on six-month contracts show.
Oil traded near $33 a barrel as the International Energy Agency said a global surplus will continue into next year and limit any chance of a short-term price rebound. April futures in New York slid 1.6 percent after the March contract expired Monday up 6.2 percent.