Economic Indicators & Central Banks:
- The FOMC’s high-for-longer stance, along with some increasing fears of a rate hike, continue to weigh on Treasuries. That’s taking a toll on Wall Street too with profit taking from recent record highs knocking stocks down further.
- There was weakness in EGBs after stronger German inflation and wage data.
- US Yields have risen since the market breathed a sigh of relief after cooler CPI and retail sales, and are back near the highs since November.
- Global equities are headed for their worst week since mid-April.
- In New Zealand, the new government delivered on its election promise to cut taxes in its first budget even as the Treasury forecast bigger deficits and a delayed return to surplus.
Asian & European Open:
- Wall Street dropped, led by the Dow’s -1.06% decline. The S&P500 declined -0.74%, with the NASDAQ -0.58% lower. Several earnings reports have been less than stellar as well. Salesforce disappointed today, while HP beat. Meanwhile, retailers are coming into the spotlight and there are fears of weakness.
Financial Markets Performance:
- The USDIndex has been benefiting from the hawkish outlooks. It has bounced back over 105.
- The USDJPY fell, with the Yen advancing after weakening to beyond 157.50 on Wednesday, falling through a level that had prompted the latest round of suspected action.
- The Rand extended losses as South Africa’s election vote count gathers pace.
- Gold and Oil steadied. USOIL is well below the week’s high however it has been ranging since yesterday afternoon as traders look to US stockpile data later today and an OPEC+ meeting at the weekend for more clarity on the supply and demand outlook.
Click here to access our Economic Calendar
Andria Pichidi
Market Analyst
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