Global Markets:
- Asian stock markets: Nikkei down 4.76%, Shanghai Composite down 3.41%, Hang Seng down 4.59%, ASX down 3.20%
- Commodities: Gold at $1345.80 (+0.70%), Silver at $16.85 (+1.10%), WTI Oil at $63.48 (-1.04%), Brent Oil at $66.94 (-1.01%)
- Rates: US 10-year yield at 2.708, UK 10-year yield at 1.562, German 10-year yield at 0.727
News & Data:
- (AUD) Cash Rate 1.50% vs 1.50% expected
- (AUD) Trade Balance -1.36B vs 0.25B expected
- (AUD) Retail Sales m/m -0.50% vs -0.20% expected
- (USD) ISM Non-Manufacturing PMI 59.9 vs 56.5 expected
- (GBP) Services PMI 53 vs 54.1 expected
- Oil prices fall more than 1 percent amid global market rout
- Stock sell-off overdue, investors lick their wounds and hunt- RTRS
- Dow futures point to a more than 1,200-point fall at the open- CNBC
Markets Update:
Following the US markets’ worst fall in the last 6 years, witnessed yesterdays, Asian equities echoed the sentiment, with the Nikkei falling by as much as 1500 points at a point. Australian shares dropped 2.7 per cent in early trade to their lowest level since October while futures suggest Japan's Nikkei is on course to fall more than 4 percent.
Overall, the trigger was a sharp rise in US bond yields following Friday's data that showed US wages increasing at the fastest pace since 2009, raising the alarm about higher inflation. Investors’ scepticism about earnings growth, and high valuations added to the pain. The CBOE Volatility index, the closely followed measure of expected near-term stock market volatility and often seen as a gauge of investors fear, jumped 20 points to 30.71, its highest level since August 2015.
Amid chaos, Bank of Australia maintained interest rates, expressing hopes to achieve target inflation and reduce unemployment numbers. The 10-year US Treasuries yield rose to as high as 2.885 per cent on Monday, its highest in four years and 47 basis points higher than 2.411 per cent at the end of 2017, before falling as the rapid selloff in equity markets sparked demand for the low risk debt, and benchmark 10-year note yields were last at 2.68 percent.
The euro eased to $1.2379, not far from last week's low of $1.2335, a break of which could usher in further correction after its rally to a 3-year high of $1.2538 by late last month.Against the yen, which is often used as a safe-haven currency because of Japan's solid current account surplus, the dollar slipped to 109.14 yen, having lost one percent on Monday.Bitcoin also tumbled, hitting a 12-week low of $6,600. That represented a 66 percent fall from its record high of $19,666. It last stood at $6,792.
Upcoming Events:
- 09:00 AM GMT – (EUR) German Buba President Weidmann Speaks
- 01:30 PM GMT – (CAD) Trade Balance
- 03:00 PM GMT – (CAD) Ivey PMI
- 09:45 PM GMT – (NZD) Employment Change q/q
- 09:45 PM GMT – (NZD) Unemployment Rate
- Tentative – (NZD) GDT Price Index
