Early on Monday, growing deflationary pressures in China compounded growth concerns from a faltering U.S. economy and a smouldering global trade war, causing Wall Street futures to plummet and the safe-haven yen to gain momentum.
Nasdaq futures NQ1! fell 0.9%, while U.S. S&P 500 e-mini stock futures ES1! indicated 0.7% down.
The yen rose approximately 0.4% to 147.395 per U.S. dollar.
Bitcoin BTCUSD, the cryptocurrency, dropped as much as 7.2% from Friday to $80,085.42, the lowest level this month.
China’s consumer price index dropped in February at the fastest rate in 13 months, according to data released on Sunday, while producer price deflation continued for the 30th consecutive month.
In the first monthly payrolls report that reflected President Donald Trump’s policies, U.S. data released Friday revealed that the labour market produced fewer jobs than anticipated last month. That continued a recent trend of weak readings for the largest economy in the world.
In contrast, Trump refused to say in an interview with Fox News on Sunday if his tariffs on China, Canada, and Mexico would cause a recession in the United States.
According to Kyle Rodda, senior financial markets analyst at Capital.com, “there is no shortage of possible catalysts” for early market downturn.
“Most of all though, I think it’s Trump’s cavalier approach to economic policy that’s rattling sentiment,” said Rodda.
“He is really committed on making big, structural changes to the economy, even if it means sacrificing short-term growth, in contrast to his previous administration, when indications of a market correction or economic slowdown would cause a shift in policy.