Stocks Slide As Rate Drop Continues, Dollar Spikes
Our futures are pretty tame see cap 2
While global markets showed tentative signs of a rebound in sentiment in early Thursday trading, as the global bond rally showed signs of easing, with Treasuries turning lower alongside most sovereign debt in Europe, this quickly reversed around the time US traders start showing up at their desks, and European stocks faded almost all of their earlier gains, while U.S. equity futures drifted, once again within striking distance of the 2,800 key level.
After the 10-year US Treasury yield crept back above 2.37% during Asia trading, a renewed flight to safety saw the yield on the benchmark paper slide in the red again, as global bond yields continued to spiral lower on Thursday as recession fears fed expectations of more policy easing by major central banks, with the 10Y trading below 2.36% at last check.
After shares slumped in Japan and fell in China and South Korea at the start of trading, contracts on the S&P 500 pointed to a modestly red open fading an earlier rebound, while the Stoxx Europe 600 paring earlier gains of as much as 0.4 percent, with banking stocks the regional benchmark’s weakest sector. The Stoxx 600 was steady as of 11:36am in London, with the index tracking banking stocks dropping 1.3% following fresh turmoil in Sweden over money-laundering, while healthcare gauge climbs 0.8%. Rating agency S&P became the latest to cut its euro zone growth forecasts while a Reuters report that the United States and China had made progress in all areas in trade talks seemed to bolster sentiment a little, though sticking points still remained and there was no definite timetable for a deal.
Worries that the inversion of the U.S. Treasury curve signaled a future recession only deepened as 10-year yields fell to a fresh 15-month low at 2.34% on Wednesday. "We think that the ongoing flattening, or outright inversion, of the curve is a bad sign for equities, as it usually has been in the past,” said Oliver Jones, markets economist at Capital Economics. “Arguments that the yield curve is no longer a reliable indicator seem to resurface every time it inverts, only to be subsequently proved wrong."
Meanwhile, Chinese Premier Li said world economy faces slower growth and increasing uncertainties, while he added that some fluctuation in quarterly economic growth this year cannot be ruled out. Chinese Premier Li further commented that China must achieve goal of tax and fee cuts this year, while it will also publish a revised negative list for foreign investors and will treat domestic and foreign companies equally. Separately, adding that changes in their economy in March have exceeded expectations, adds that China's economic operations were steady in Q1.
But it was the Turkish lira, one of the currencies at the heart of last year’s emerging market meltdown, which was once again the overnight highlight as plunged as much as 5% against after the central bank unveiled that it had burned through a third of its reserves in 1 month and the attempt to crush shorts had ended, inviting a fresh wave of bears. As Reuters notes, authorities were showing the first sign of easing a draconian squeeze put on international lira traders ahead of local elections this weekend but a day after the country’s stock market also slumped there was little good will. Ugras Ulku at the International Institute of Finance in Washington said the question was, when the dust settles, whether portfolio managers want to continue to invest in Turkey or not “we will have to wait and see,” he said
Elsewhere, hints of rate cuts from New Zealand’s central bank* had the desired effect on its currency, which was pinned at $0.6816 after diving 1.6 percent overnight. The Aussie was on the defensive at $0.7090. Draghi’s comments likewise kept the euro back at $1.1250, and left the U.S. dollar a fraction firmer against a basket of its competitors at 96.874. Only the yen held its own thanks to its safe-haven status and firmed to 110.00 per dollar.
'''*Should be no surprise as where did they want to bug out to…
That this central bank is cutting rates ..now should tell you all you need to know. Trying to keep the entire system together by cutting interest rates.'''
https://www.zerohedge.com/news/2019-03-28/stocks-slide-rate-drop-continues-dollar-spikes
https://www.bloomberg.com/markets/stocks/futures
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https://www.kitco.com/charts/livegold.html
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