(Adds gold, oil settlement prices)
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
* Wall Street, European shares decline
* Oil falls on oversupply, collapsing demand worries
* U.S. yields slip as COVID-19 effects economy
By Herbert Lash
NEW YORK, April 15 (Reuters) - A double whammy of economic
data showing the U.S. economy in a deep downturn and reports of
persistent crude oil oversupply and collapsing demand slammed
global markets on Wednesday as vivid reminders of the damage
from coronavirus-related lockdowns.
Oil prices sank after the International Energy Agency (IEA)
forecast a 29-million-barrel per day dive in April crude demand
to levels not seen in 25 years and said no output cut could
fully offset the near-term decline facing the market.
Washington could slap tariffs on U.S. oil imports if global
crude producers fail to keep pledges made over the weekend to
reduce output, the top U.S. energy diplomat said.
Shares on Wall Street followed European stocks lower as a
raft of dour earnings from U.S. banks and a slide in listed oil
heavyweights in London and Paris due to the outlook for crude
prices pushed major stock indexes lower.
Uncertainty still prevails in markets as it's not clear when
economies are going to come out of the pandemic-driven slowdown,
said Candice Bangsund, a global asset allocation strategist at
Fiera Capital in Montreal.
"Our premise has been that uncertainty and near-term market
gyrations are going to continue until we get more clarity on the
status of the outbreak," Bangsund said. "Until the virus peaks
globally, there's little visibility in that regard."
U.S. retail sales plunged 8.7% last month, the biggest
decline since the government started tracking the series in
1992, while manufacturing output dropped by the most in just
over 74 years in March.
The retail sales data set U.S. consumer spending up for its
worst decline in four decades.
MSCI's gauge of stocks across the globe shed
1.78% and emerging market stocks lost 0.92%.
The Dow Jones Industrial Average fell 311.33 points,
or 1.3%, to 23,638.43. The S&P 500 lost 46.3 points, or
1.63%, to 2,799.76 and the Nasdaq Composite dropped
59.73 points, or 0.7%, to 8,456.01.
Bank of America fell 5.6% and Citigroup Inc
lost 4.1%, leading the banking subsector to slip 5.4%.
Bank earnings have been negatively impacted by a large
increase in their loan loss reserves and may remain high, while
operating costs may rise to deal with bad loans, said senior
research analyst Dick Bove at Odeon Capital Group LLC.
The pattern could continue into 2021, he said.
The pan-European STOXX 600 index slipped 3.3%,
after rising almost 8% since April 6 on early signs the
health crisis was ebbing and hopes sweeping lockdown
measures would soon be lifted.
Chancellor Angela Merkel said some shops in Germany could
reopen next week, but that social distancing rules would remain
in place. England's chief medical officer said that while
Britain was probably close to the epidemic's peak, it was too
soon to begin thinking about next steps.
Oil companies Total SA, Royal Dutch Shell Plc
and BP Plc all sank in Europe, pushing the
European energy index down 6.9%.
U.S. crude futures fell 1.2% to settle at $19.87 a
barrel, while Brent futures <LCOc1) fell 6.5% to settle at
$27.69 a barrel.
U.S. Treasury yields fell across the board as risk aversion
flared up again. U.S. two-year yields dropped below 0.2% for the
first time in three years.
Benchmark 10-year notes rose 35/32 in price to
push their yield down to 0.6395%.
The dollar firmed as investors fled risk assets for safe
havens. The U.S. dollar index, which had fallen in the
four previous trading days, rose as high as 99.98.
The dollar index rose 0.615%, with the euro
down 0.53% to $1.0921. The Japanese yen weakened 0.19% versus
the greenback at 107.43 per dollar.
China earlier moved again to cushion its economy, cutting a
key medium-term interest rate to record lows and paving the way
for a similar reduction in benchmark loan rates, while reducing
the amount banks must hold as reserves.
Gold prices fell, a day after scaling over seven-year highs,
as the dollar firmed and investors booked profits. Concerns of a
global recession put a floor under prices.
U.S. gold futures settled down 1.6% at $1,740.20 an
ounce.
(Reporting by Herbert Lash, additional reporting by Katanga
Johnson in Washington; Editing by Bernadette Baum)
BP (BP.)
