Wall Street futures underlined a global market sell-off on Monday morning as investors fretted over the potential knock-on effects of U.S. President Donald Trump‘s surprise failure to deliver on health-care reform.
Dow futures were set for triple-digit losses, down over 180 points at 8.00 a.m. London time, after Republicans dramatically pulled their health-care bill on Friday.
“The market’s patience is wearing thin,” Vasileios Gkionakis, head of global FX strategy at Unicredit, told CNBC on Monday morning.
“It definitely doubts the U.S. administration’s ability to push forward (with) this so much talked and discussed agenda including the fiscal stimulus, tax deregulation, tax cuts,” Gkionakis added.
Trump’s perceived inability to garner enough support from his own Republican party to repeal and replace Obamacare appeared to dent the president’s image as someone who could get deals done, which prompted concern among traders for future economic policies.
The depressed mood for investors was far-reaching as European markets, led by the U.K.’s FTSE 100 and German Xetra DAX, sank nearly 1 percent as the session opened on Monday morning.
Elsewhere, Asia markets were mostly lower. The Japanese benchmark Nikkei 225 dropped by more than 1.44 percent as risk-off sentiment spurred a rush to safe-haven assets such as gold and the yen. Spot gold was trading at highs not seen for over a month as the commodity spiked to hit $1.258 an ounce.
The dollar index fell to its lowest level since mid-November as it weakened from a high of 100.00 on Friday to 99.24 against a basket of currencies.
“The dollar for example is quite fascinating, right now the dollar has pretty much wiped out all the gains that (were made) on the back of this Trump-euphoria related trade. I don’t want to call it Trump reflation trade because I think the reflation trade has started before Trump was actually elected,” Gkionakis said.
Meanwhile, U.S. government debt prices were also higher on Monday morning. The yield on the benchmark 10-year Treasury note, which moves inversely to price, was lower at around 2.3549 percent, while the yield on the 30-year Treasury bond was also lower at 2.9651 percent.