Chinese equities fell over 4% on Friday after official data revealed a 20% year-on-year decline in exports, intensifying global economic anxieties and pushing major indices to three-week lows. The February contraction far exceeded expectations of a 4.8% drop, worsening market fragility following the European Central Bank's revised growth forecasts and new monetary stimulus measures.
Analysts highlighted broader concerns about global economic momentum, with European auto stocks declining 1.6% and the STOXX 600 index posting its first weekly decline in a month. The MSCI world index extended its five-day losing streak, its longest since December 2018.
"The Chinese economy is underperforming relative to expectations, and global growth prospects are worse than perceived," said Fiera Capital's Julian Mayo. "This combination has created significant market turbulence." The ECB's decision to delay rate hikes and expand liquidity provisions sent bond yields to multi-year lows, with German 10-year yields approaching zero percent. U.S. Treasury yields also fell to two-week troughs amid shifting risk appetites.
Currency markets saw the euro rise to $1.1209 after recent declines, while the dollar weakened against a basket of currencies despite U.S. economic resilience. Oil prices edged lower as U.S. crude output reached record levels, countering OPEC's market-stabilization efforts.
Investors awaited U.S. nonfarm payrolls data for February, with expectations of potential revisions to January's strong employment figures. The report could influence central bank policy trajectories in the coming months. The euro touched $1.1176, its lowest since June 2017, while the dollar reached a 2019 high against a basket of currencies.
Germany’s benchmark 10-year bond yield approached zero percent, its lowest level since 2016. Ciaran O’Hagan of Societe Generale noted the ECB’s dovish stance would keep bond yields low, citing the central bank’s 2016 stimulus measures as precedent.
