Global stock markets slide ahead of Fed meeting

The yield on the 10-year Treasury note fell to 1.60 percent from 1.61 percent the day before, trading at yields not seen since 2012.

Investors are also cautious ahead of this week’s US Federal Reserve meeting on interest rates.

The US Federal Reserve is not expected to hike interest rates on Wednesday, but investors will be watching to see if it turns more dovish amid heightened market uncertainties and weak inflation.

Vote Leave chief executive Matthew Elliott said last month: “These threats lack credibility – the pound has actually been stable in recent months as the possibility of Brexit has increased”.

European Union foreign policy chief Federica Mogherini has so far declined to comment on the referendum. “Fed is unlikely to increase rates this month, but we can not say the same about next month”, said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.

European shares fell to their lowest level in more than two months on Monday, hit by a sell-off in cyclical stocks and widespread unease in markets over a possible British exit from the European Union.

Sterling gained ground for the first time in a week and was last up 0.5 percent at $1.4185, having hit a two-month low of $1.4091 on Tuesday.

“We’re already in a bear market in Europe and fears over Brexit are adding further pressure and uncertainty to markets”, he said.

Cyclical stocks – sensitive to economic shifts – were the top fallers, with the auto and bank sectors down 2.0 and 1.6 percent respectively. Those polls excluded respondents who answered “don’t know”.

Wall Street looked set for more declines, with futures for the Dow Jones industrial average and the Standard & Poor’s 500 both down 0.1 percent.

The Nasdaq dropped 4.89 (-0.10 percent) to finish at 4,843.55, while the S&P gave up 3.74 (-0.18 percent) to close at 2,075.32.

The oil market is now in balance due to unplanned outages and robust demand, particularly from emerging economies, but this equilibrium will tip into surplus again early in 2017, the International Energy Agency (IEA) had said on Tuesday.

A Brexit has the potential to impact the entire global economy.

Volatility in the pound spiked to its highest in at least 20 years, rising beyond heights seen when USA investment bank Lehman Brothers collapsed in late 2008.

By 0842 GMT, the pound was up 0.6 percent to $1.4194 and 0.4 percent at 79.04 pence per euro.

The yen also hit a six-week high versus the dollar and a almost three-year peak against sterling. Spot gold was down 0.3 percent at $1,282.60 an ounce at 1340 GMT, while US gold futures for August delivery were down $2.40 an ounce at $1,285.70.

Wall Street followed the main indexes in Asia and Europe downward but gained support from a slightly better-than-expected report on United States retail sales in May.

Gold hit its highest in nearly six weeks.