Hong Kong tensions end winning streak for global stock markets - as it happened

Rolling coverage of the latest economic and financial news, amid heightened tensions between the US and China

• China pledges to support' Hong Kong's police as US warned not to interfere
• UK says it will extend Hongkongers' visa rights if China pursues security laws

2.58pm BST

2.42pm BST

Oil output by OPEC members fell to its lowest level since 2002 in May, after members including Saudi Arabia embarked on a major supply cut meant to help offset a dramatic drop in demand during the Covid-19 outbreak.

The oil cartel produced 24.77 million barrels per day this month, Reuters has reported. That marks a 5.91 million bpd decline compared to April.

2.32pm BST

There's been no reprieve for equity investors today, with Wall Street extending global declines at the open:

2.26pm BST

The focus on renewed trade tensions between the US and China feels strangely familiar, but it's important to remember how the pandemic has put this in a completely different context.

Neil MacKinnon, Global Macro Strategist at VTB Capital explains:

From the perspective of the financial markets, these uncertainties manifest themselves at an awkward time, when the global economy is struggling to recover from the COVID-19 pandemic and the global recession is the worst this side of WW2.

China's key role in the global economy is widely-documented, and during the last financial crisis it played an important role through its mega-fiscal policy stimulus back then in preventing a much deeper downturn in the global economy.

1.55pm BST

Dataflash: US data has shown a sharp drop in spending and an increase in savings among consumers in April, as the coronavirus and resulting lockdown took hold.

Figures from the US Bureau of Economic Analysis show that personal spending last month fell by -13.6%, worse than consensus estimates for a -12.6% contraction and nearly double the -6.9% drop in March.

Consumer spending plunges, incomes soar on federal payments https://t.co/bslE5mfA7i pic.twitter.com/xAcRkHQDvp

The April estimate for personal income and outlays was impacted by the response to the spread of COVID-19, as federal economic recovery payments were distributed, and governments continued with stay-at-home" orders.

1.15pm BST

Time to check in with stock markets.

With just over an hour until the US open, we're still looking at a sea of red across European indices, with the FTSE 100 currently the worst performer.

12.55pm BST

British Airways is proposing to outsource work being done by at least 450 employees it is making redundant, my colleague Jasper Jolly writes.

The Labour party said the proposals were disturbing news" and called for the government to scrutinise the plans, revealed by the Guardian.

Related: British Airways may outsource work of 450 redundant employees

12.23pm BST

The Spanish government has approved a form of universal basic income that will guarantee up to 1,015 (916) per household per month, in an attempt to help the country's poorest.

The creation of a national minimum income, which has been trailed by the left-leaning government in recent days, has now been approved by cabinet under emergency measures.

11.44am BST

Twitter shares are down 0.9% in pre-market trading amid a growing rift between the social media platform and the White House.

Donald Trump signed signed an executive order overnight that aims to remove Twitter's protections against civil claims in cases where it acts as an editor" rather than a publisher. (That came after the company applied a fact-checking label to the president's tweets for the first time.)

The decision was made jointly by teams within Twitter, and our CEO Jack Dorsey was informed of the plan before the Tweet was labelled.

Related: Twitter hides Donald Trump tweet for 'glorifying violence'

11.17am BST

All that glitters is...silver?

The drop across global stock markets has pushed up safe havens assets including gold which is now trading higher by 0.4% at $1,725 per ounce

With gold struggling to make new highs, the market prefers silver, which has lagged gold considerably in this year's rally, and positioning does not seem to be a factor. Even the typical fast money momentum traders are avoiding selling silver these days.

10.52am BST

Naeem Aslam, chief market analyst at AvaTrade, says tensions between the US and China over Hong Kong are driving the drop in US futures. But aside from geopolitical tensions, carmakers and tech stocks will also take centre stage on Wall Street today.

Renault's stock, a French car maker, is going to be the primary focus among investors. The company has announced to lay off 14,600 jobs worldwide, nearly 4,600 job losses in France, and reduce its production capacity by nearly a fifth. The strategy is designed to stop the cash bleed under the current circumstances. There is no denying that the automobile industry has been hit hard, and the bigger question is whether we will see a similar reaction from other carmakers such as BMW and Mercedes-Benz.

The stock plunged over four percent yesterday after Twitter decided to fact check Trump's tweets. Under the current law, social platform companies such as Twitter and Facebook are protected for their user's posts.

However, Trump signed an executive order and called for a new law. Trump calls it freedom of speech, and this threatens the liability shield that companies like Twitter currently enjoy.

10.43am BST

Futures are pointing to a drop across major US indices at the start of trading today:

10.26am BST

Eurozone inflation has tumbled to its lowest level since June 2016.

Flash estimates from Eurostat showing that the annual rate of inflation increased just 0.1% year-on-year in May, as a jump in food costs were offset by a sharp drop in fuel demand and energy prices.

10.01am BST

UK lenders have granted around 1.5 million payment holidays on credit cards and personal loans for customers impacted by the Covid-19 outbreak and lockdown.

That's according to fresh figures released by banking lobby group UK Finance, which shows there has been a near 30% increase in payment delays being granted across both products since the start of May.

9.34am BST

Discount retailer B&M has fared relatively well during lockdown.

The company has reported exceptionally strong demand for DIY and gardening tools that helped push underlying UK sales up 22.7% over the last eight weeks.

Related: B&M buoyed by DIY sales boom in UK coronavirus lockdown

9.19am BST

The final reading of Italy's Q1 economic growth has been revised lower from -4.8% to -5.4%, compared to a year earlier.

That is worse than economists had expected, having forecasted no change from preliminary estimates, according to a Reuters poll.

9.09am BST

The FTSE 100 has extended its losses and is now down over 1.1% at around 6,146 points.

9.02am BST

Newsflash: China's foreign ministry has said it reserves the right to take countermeasures against the UK if it offers permanent residency to Hong Kong residents, according to Reuters.

It's not exactly clear what those countermeasures would entail, but it is unlikely to be good news for future trade relations and industry.

Related: UK says it will extend Hongkongers' visa rights if China pursues security laws

8.44am BST

In a sign that some semblance of normality is expected in the UK in the months ahead, CityAM has announced that it will be restarting the printing presses by September:

Some good news to share: @CityAM will return to print on Monday 7 September, just days after the paper's 15th birthday. Can't wait to be back with a full team. Thank you for all the support.

8.38am BST

Nationwide Building Society has seen its annual profits almost halve, in part due to the impact of hundreds of thousands of customers taking payment holidays due to the coronavirus, my colleague Mark Sweney writes.

The mortgage lender said that pre-tax profits plunged by 44% from 833m to 466m in the year to 4 April. Joe Garner, chief executive, said that 280,00 customers have so far opted to take a payment holiday which has cost the company 101m:

In the last month of our financial year all our lives have been overshadowed by the coronavirus. We are helping members in financial difficulty with payment holidays on mortgages and loans and interest-free overdraft periods.

8.29am BST

Europe's Stoxx 600 has been dragged lower by autos, banks, and travel & leisure stocks, and the FTSE 100 is not much different.

The worst performers including Rolls Royce and cruise company Carnival, as well as easyJet. HSBC is not too far behind either, having been hit by fears that Hong Kong's robust financial sector could be hurt if it is included in sanctions aimed at China.

8.13am BST

French carmaker Renault plans to cut 14,600 jobs as it aims to save 2bn in one of the deepest restructuring programmes prompted by the coronavirus pandemic across the global car industry, my colleague Jasper Jolly writes.

Renault will cut 4,600 jobs in its French operations, which will undergo a major reorganisation, and another 10,000 around the world.

In a context of uncertainty and complexity, this project is vital to guarantee a solid and sustainable performance, with customer satisfaction as a priority.

By capitalizing on our many assets such as the electric vehicle, by capitalizing on the resources and technologies of Groupe Renault and the Alliance, and by reducing the complexity of development and production of our vehicles, we want to generate economies of scale to restore our overall profitability and ensure our development in France and internationally.

8.04am BST

After steadily climbing all week, major indices across Europe have also lost their steam and follows US and Asian stocks into the red:

8.02am BST

Commenting on the negative turn in global stocks, Michael Hewson, chief market analyst at CMC Markets UK says:

Having spent most of this week ignoring the prospect of an escalation of US, China tension over Hong Kong, despite various smoke signals throughout the week suggesting a confrontation was brewing, US markets turned tail sharply late last night on reports that President Trump was going to be holding a press conference later today on China.

The US house also passed a bill, earlier this week authorising sanctions against senior Chinese officials for human rights abuses, against Muslim minorities, so today's press conference could well up the ante further, if President Trump signs off on that bill as well as implementing further measures that might hint that the US is keen to send the Chinese a message.

This sharp reversal in the last hour of US trading, merely goes to show that markets not only see what they want to see and hear what they want to hear, but that they also choose when they want to as well.

7.56am BST

Global mkts turn Risk-Off as tensions between US & China continued to escalate. US & European Futures along w/most Asian shares drop ahead of Trump's planned presser to announce fresh steps on China. Bonds higher w/US 10y at 0.67%, 10y Bunds at -0.43%. Gold $1718, Bitcoin $9.5k. pic.twitter.com/S2LNzMhmuh

7.54am BST

Good morning and welcome to our rolling coverage of the world economy, the financial markets, eurozone and business.

Global stock markets have ended their winning streak as attention was turned back to rising tensions over Hong Kong.