European shares fell on Wednesday as steep U.S. reciprocal tariffs kicked in, exacerbating fears over the economic damage caused by the trade war that even spread to the bond market. - REUTERS
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00:00European shares fell on Wednesday as the rollout of steep US retaliatory tariffs deepened
00:05fears of economic damage.
00:07The Pan-European Stock 600 slumped over 2 per cent in morning trade as the previous session's
00:13rally fizzled out.
00:15The trade-sensitive German DAX index also fell by a similar amount.
00:19The Stock 600 is currently about 15.5 per cent below its all-time closing high and nearing
00:25the 20 per cent threshold that will confirm a bear market.
00:29Rate-sensitive banks also slumped Wednesday as traders fully priced in an interest rate
00:33cut from the European Central Bank next week.
00:37US President Donald Trump's reciprocal tariffs, including a 20 per cent levy on select European
00:42Union goods, took effect on Wednesday.
00:45The 27-member bloc was due to vote on initial countermeasures later in the day.
00:50European farmer giants Roche Novartis and Novo Nordisk all dropped over 5 per cent after
00:56the American president reiterated plans of a major tariff on all pharmaceutical imports.
01:02The concerns also spilled over into bond markets.
01:05US Treasuries extended heavy losses on Wednesday in a sign investors are dumping even their safest
01:11assets.
01:12The 10-year US Treasury yield, the globe's benchmark safe-haven anchor, was unmoored.
01:18And long bonds were the focus of intense selling from hedge funds.
01:21The yield crossed 4.5 per cent at one point, even as traders ramped up expectations for
01:27US rate cuts.
01:28And in another signal of dislocation in the markets, the dollar fell against the euro and
01:33yen.