Originally published by Rivkin Securities
Almost all asset classes fell overnight with the notable exception of bonds and Bitcoin (BitfinexUSD). European stocks had a horrid session with fears of economic collapse in Turkey unsettling investors. The Dax Index fell 1.6% while the FTSE 100 fell 1.5%. US stocks staged a late rally to finish the session with more modest losses of 0.5% and 0.75% for the Dow and S&P 500 respectively.
Commodities, including precious metals, were also sold off with the CRB commodity index falling 1.8%. Fears of demand destruction resulting from the trade wars is reducing the markets expectations for future commodity demand. Gold prices fell another 1.5% to a new low for this move. The last time gold was at this level ($1,175 per ounce) was in December 2016 and silver is at an over two year low. Oil was also heavily sold overnight from a combination of the fears of reduced demand as well as a large, unexpected stockpile build.
Investors fled into the usual safe havens, the US dollar and bonds. Bond yields have fallen over the past couple of weeks with the US 10-year yield back down to 2.86% after briefly exceeding 3.0% on 1 August. The 3% level has proven to be a strong resistance level as yields have tried several times, and failed, to hold above this level. The US dollar is at a one-year high according to the US dollar index.
Today Australia will release its employment data for the month of July. Only 15,000 new jobs are expected to have been created after June which saw an unexpectedly large number of 50,900 new jobs.
Data Releases:
- Australia Employment Data 11:30am AEST
- UK Retail Sales 6:30pm AEST