Fears that Chinese growth, which carried the global economy following the 2008 international financial crisis, is slowing in the long term are affecting the outlook for many industries, with the commodities sector among the hardest-hit.
U.S. crude oil prices CLc1 eased 0.8 percent after a fall of more than 4 percent on Wednesday following an unexpectedly large increase in U.S. stockpiles, barely holding above its 6 1/2-year low of $40.40 per barrel.
It last stood at $40.47, with a break below $40 seen as likely to trigger a fresh wave of selling.
Brent crude futures LCOc1 fell 0.6 percent to $46.90, edging near the six-year low of $45.19 touched in January.
Falls in oil and other commodity prices hit many resource-exporting emerging economies hard, and they have already suffered shocks from capital outflows as the prospect of higher U.S. interest rates looms larger.
MSCI’s emerging market index .MSCIEF set a new four-year low, having fallen 22 percent from this year’s high hit in April and coming within a stone’s throw of its Oct 2011 trough.
Minutes from last month’s Fed monetary policy meeting showed officials in broad agreement that the U.S. economy was nearing the point where interest rates should move higher.
But they also noted lagging inflation and a weak global economy posed too big a risk to commit to “lift off”, leading some investors to question the likelihood of a rate hike in September.
U.S. Treasury yields fell and money market futures <0#FF:> <0#ED:> rolled back expectations of a rate rise in September.
The 10-year U.S. Treasuries yielded 2.122 percent, having declined from an eight-month high of 2.500 percent touched in June.
The dollar also lost its edge against other major currencies. It fell to a three-week low of 123.68 yen JPY= on Wednesday and last stood at 123.92 yen while the euro also rose to $1.1138 EUR=, extending its rebound from this week’s low of $1.10165 touched on Tuesday.
Gold also gained XAU=, rising to a one-month high of $1,135.40 per ounce.
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