The european stock markets collapsed again on Wednesday, after China hinted that it could increase its trade conflict with the United States by reducing the exports of vital raw materials for many high-technology products in the world.
The benchmark Stoxx 600 index was down 1.4% to 371,14 at 11: 30, after the Global Times, a spokesman of the English language to Beijing, has tweeted that China was seriously considering to reduce its exports of rare earths in response to recently imposed by the United States import duty higher on their products, and a boycott is effective telecom giant Huawei.
The british FTSE 100 lost 1.0%, the French CAC 40 lost 1.5% and the German Dax has lost 1.1 per cent.
There was also bad news locally. The office of the German labor announced a rise shocking 60 000 the number of unemployed in may, while the long period of slowdown of manufacturing in the manufacturing industry was finished by touching on the job. There had already been hints of layoffs in the purchasing managers index of the IHS Markit last week, but the numbers have surprised the market, which expected a decrease of 8 000.
The miracle of the German labour market has been one of the most important engines of the european economy over the past 10 years, the number of persons in employment who have reached a series of highs. But its economy depends more than most manufacturing industries and its manufacturers are heavily dependent on exports to the United States and China (and, to a certain extent, Great Britain, grappling with its own slowdown).
At the opening, the markets were still under pressure signals indicating that the nationalist party, Italian Lega will adopt a more aggressive stance in its dispute of the budget with the EU. The risk premium offered by Italian government Bonds compared with equivalent German reached its highest level since February to 286 basis points after the head of the League, Matteo Salvini, winner of the elections of the weekend at the european Parliament, said he would press for the EU fiscal rules should be amended, and called on the European Central Bank to guarantee all the debts of the governments of the countries of the euro area.
The FTSE MIB fell 1.4% and is now down 8.7% compared to last month, which is the worst performance of the major european markets.