European stocks ended Wednesday’s session in negative territory after the U.S. yield curve inversion deepened to levels not seen since 2007, reigniting fears of an impending recession.
The pan-European Stoxx 600 was 0.20% lower at the closing bell to 372.86, insurance stocks shedding 1.2% while the oil and gas sector posted gains on the back of higher oil prices.
The inversion of the spread between the 10-year and 2-year U.S. Treasury yield continued to worsen on Wednesday after falling to its lowest level since before the financial crisis on Tuesday, with inversions of the yield curve consistently preceding periods of recession. The rate on the benchmark 30-year Treasury bond also hit a new all-time low.
Sterling fell around 0.4% against the dollar on Wednesday after the queen approved British Prime Minister Boris Johnson’s plan to suspend parliament. A statement from the Privy Council, a body of advisers to the queen, confirmed that parliament would be suspended on a day between September 9 and September 12, with the suspension lasting until October 14.