CURRENCY MARKET WRAP
As of Thu Aug 15th, Singapore Time zone UTC+8
Dollar Index +0.16%, 97.96
USDJPY, -0.78%, $105.92
EURUSD, -0.25%, $1.1143
GBPUSD, -0.01%, $1.2059
USDCAD, +0.67%, $1.3312
AUDUSD, -0.68%, $0.6755
NZDUSD, -0.29%, $0.6439
Economic data from two of the world’s biggest economies added to investors’ fears on Wednesday. European markets fell after Germany’s economy contracted 0.1% in the spring due to the global trade war and troubles in the auto industry. In China, the world’s second-largest economy, growth in factory output (4.8% vs 6.0% Exp.), retail spending (7.6% vs 8.6% Exp.) and investment (5.7% vs 5.9% Exp.) weakened in July.
The 2-yr yield fell nine basis points to 1.58%, and the 10-yr yield fell ten basis points to 1.58%. Interestingly, the 30-yr yield hit a record low at 2.02% before finishing the session down 11 basis points at 2.03%. The U.S. Dollar Index held firm, advancing 0.16% to 97.96. It should be noted that the 2s-10s yield spread did not remain inverted during the session.
STOCK MARKET WRAP
S&P500, -2.93%, 2,926.32
Nasdaq, -3.02%, 7,773.94
Nikkei Futures, -0.67%, 20,213.0
Each of the major U.S. indices lost around 3.0% on Wednesday, as weak global data and a recessionary signal in the U.S. Treasury market sent stocks reeling. Broad-based selling left both S&P 500 and Russell 2000 down 2.93%. The Dow Jones Industrial Average lost 3.1%, and the Nasdaq Composite lost 3.02%.
The stock market began the day sharply lower, giving back a bulk of yesterday’s advance, after data out of China and Germany continued to weaken. China reported its slowest industrial production growth since 2002, and Germany reported a 0.1% qtr/qtr decline in Q2 GDP. Understandably, investors rushed to safe-haven assets such as gold ($1527.80, +$13.70, +0.9%) and U.S. Treasuries, while equities steadily declined throughout the day. The yield-curve flattening impacted shares of Citigroup (C 61.41, -3.42, -5.3%), Bank of America (BAC 26.42, -1.30, -4.7%), and JPMorgan Chase (JPM 104.80, -4.54, -4.2%).