LONDON, Sept 16 (Reuters) – European shares fell on Friday and the yield on Europe’s benchmark German 10-year bond hit its highest level since mid-June as investors braced for a U.S. rate hike while warnings from the World Bank and the International Monetary Fund fueled fears of a slowdown. The World Bank’s chief economist said Thursday that he is concerned about a period of low growth and high inflation in the global economy. The International Monetary Fund said downside risks continue to dominate the global economic outlook, but it is too early to say whether there will be a widespread global recession. read more Wall Street sold off Thursday after U.S. economic data gave the Federal Reserve little reason to ease its aggressive stance on raising interest rates. read more Sign up now for FREE unlimited access to Reuters.comSign up The bearish tone continued during trading in Asia, with data showing that China’s property sector had contracted further last month. read more At 0815 GMT, MSCI’s global stock index, which tracks stocks in 47 countries, was down 0.5 percent on the day and set for a fourth straight day of losses. (.MIWD00000PUS) Europe’s STOXX 600 fell 1.2% (.STOXX) and London’s FTSE 100 (.FTSE) was 0.1% lower. Germany’s DAX fell 1.8% (.GDAXI). read more Markets are pricing in a 75% chance of a 75bp rate hike and a 25% chance of a 100bps hike at the Fed’s meeting next Wednesday. In the UK, retail sales fell more than expected, in another sign that the economy is slipping into recession as the cost of living crisis squeezes disposable household spending. read more “We are now seeing evidence confirming that the economy is indeed slowing,” said Axel Rudolph, market analyst at IG Group. “I expect stocks to pull back below their March lows. If you’re in an environment where you have central banks raising interest rates aggressively, historically that’s always led to bear markets.” The pound fell to a 37-year low against the US dollar. read more The US dollar index was up 0.3% at 110.13, still hovering near a 20-year high and flat against the yen at 143.365 yen. The yen could move to three-decade lows before the end of the year, according to market analysts and fund managers. read more Dollar strength pushed China’s offshore yuan past the 7-to-the-dollar level for the first time in nearly two years. read more The euro was slightly lower at $0.9961. German two-year bond yields hit a new 11-year high after the vice president of the European Central Bank said the economic slowdown in the euro zone would not be enough to control inflation and the bank would have to keep raising interest rates. read more Germany’s benchmark 10-year bond rose 3 basis points on the day to 1.765% – having hit its highest level since mid-June in early trading. Oil prices edged higher but were on track for a weekly decline amid fears of a slowdown in demand. read more Sign up now for FREE unlimited access to Reuters.comSign up Report by Elizabeth Howcroft. Editor: Sherry Jacob-Phillips Our Standards: The Thomson Reuters Trust Principles. Elizabeth Howcroft Thomson Reuters Reports on the intersection of finance and technology, including cryptocurrencies, NFTs, virtual worlds, and “Web3” driven money.
