WORLD HEADLINES – Stocks fell and metals prices slumped to their lowest in a year on Wednesday, as U.S. threats of tariffs on an additional $200 billion worth of Chinese goods pushed the world’s two biggest economies ever closer to a full-scale trade war.
STOCKS – Shanghai markets were hardest hit overnight – with stocks there down almost 2 percent [.SS] and the yuan weakening toward last week’s 11-month lows, down 0.4 percent to 6.66 per dollar.
BONDS – Demand for risk-off assets that traditionally ride out turbulence saw the 10-year Treasury note yield fall 3 basis points to 2.84 percent. That was a pullback from a one-week peak of 2.875 percent scaled the previous day.
COMMODITIES – Copper, zinc and lead all slumped between 3 and 4 percent to their lowest levels in about a year. Copper was down 3 percent. Nickel, tin and aluminum also dropped to multi-month lows.
CURRENCIES – The Australian dollar, often seen as a proxy for Chinese economic fortunes, fell 0.6 percent as did South Korea’s won and Mexico’s peso which also faces the threat of Trump ditching the NAFTA trade pact.
ECONOMIC DATA – US PPI m/m due at 8:30, BOC Rate Statement at 10:00, Crude Oil Inventories at 10:30, BOC Press Conference at 11:15, FOMC Member Bostic Speaks at 12:30 ET.