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Futures Tumble Below 3,000 After China Warns Of “High Virus Resurgence Risk”

Courtesy of ZeroHedge View original post here.

On a day when more than 20 US states are seeing a pick-up in cases, Tokyo reported a jump over the weekend and a fresh outbreak in Beijing prompted officials to close a market there, futures are tumbling, with Eminis down more than 40 points to 2,980 the lowest level since the start of June.

The drop follows renewed fears of a second coronavirus wave which massacred shares on Thursday before a modest rebound Friday.

But the trigger for tonight's drop appears to have come out of China, which reported 49 new cases of COVID19 in China on June 14, including 10 imported cases and 39 local cases. 36 local cases were diagnosed in Beijing and 3 in Hebei province, according to the National Health Commission, with China’s Vice Premier Sun Chunlan spooking traders saying that the risks are high for Beijing’s coronavirus resurgence to spread as all cases are related to Xinfadi wholesale market where a large population has visited, according to Xinhua.

As reported yesterday, Beijing shut a major food market and imposed lockdown restrictions on residential areas nearby after dozens of people associated with the wholesale market were tested positive for coronavirus.

Additionally, the Global Times reported that 17 out of 19 new imported coronavirus cases registered on Saturday came from South Asia, Chinese health authorities said Sunday, a sharp spike which analysts said indicates that loosening restrictions and worsening contagion in the region poses a danger to the country's domestic situation. The 17 patients were reported in South China's Guangdong Province, with 14 flying from Bangladesh and three from India.

The 14 patients and the three asymptomatic carriers arrived in Guangzhou on China Southern Airlines flight CZ392 from Dhaka to Guangzhou on Thursday, which prompted the Chinese aviation regulator to suspend the route for four weeks from June 22 in accordance with the latest policy.

"The risk is that, globally, we get a second wave," said Chris Iggo, the chief investment officer for core investments at AXA Investment Managers, quoted by Bloomberg. "Now is the time to have that long-duration bond exposure in the portfolio."

In a few minutes, the market's mood may shift again after China reports key economic data for May, expected to show a continued improvement after the world’s second-largest economy. Officials moved a press briefing online due to the latest virus outbreak in Beijing.

In FX, the yen edged up 0.1% to 107.29 per dollar; the offshore yuan slipped 0.2% to 7.0890 per dollar, and the Bloomberg Dollar Spot Index rose 0.1%.

The yield on 10-year Treasuries fell about three basis points to 0.67%, and is again approaching the April lows of 0.54% after printing shy of 1% two weeks ago amid a burst of reopening hopes that sent value stocks surging.


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