U.S. Philly Fed Manufacturing Index at 22.2 vs expected 19.7. Manufacturers remain optimistic about the outlook, as 48% of respondents expect business activity to increase over the next six months versus only 14% that expect declines. 2-yr yield and 10-yr yield settling unchanged at 2.88% and 3.18%, respectively. Risk-aversion overhangs as global markets tumbled on Thursday. USDJPY down -0.40%, $112.20.
Sentiment in the E.U. deteriorated as Italian debt crumbled on the ongoing budget dispute with the EU. Italian 10-year yields were up 14 bps to 3.69%. Euro down -0.41%. $1.14541. U.K. Retail Sales m/m at -0.8% vs expected -0.4%. Sterling plunged after a crucial Brexit summit ended withUK’s PM May offering nothing new and EU leaders canceling plans for a special summit next November. Negotiations, however, continue and EU leaders are willing to reconsider a summit next month, should a breakthrough is reached. Sterling down -0.74%, $1.3018.
WTI crude extended Wednesday’s slide, settling -1.4% lower at $68.71/bbl, marking a one-month low. USDCAD up 0.47%, $1.3079. Aussie Employment Change at 5.6K vs expected 15.2K. Unemployment Rate at 5.0% vs expected 5.3%. Aussie down -0.18%, $0.7096.
S&P 500 down -1.40%, 2768.02. Nasdaq down -2.23%, 7,116.09. Nikkei down -0.80%, 22,658.16.
The benchmark index opened just modestly lower, but started extending losses soon thereafter.U.S. Treasury Secretary Steven Mnuchin added to the uncertainty when he announced that he would be pulling out of next week’s Future Investment Initiative conference in Saudi Arabia. The decision comes as investigators seek answers over the disappearance and alleged murder of dissident Saudi journalist and Washington Post columnist Jamal Khashoggi.
In other corporate news, Dow component Travelers (TRV 125.14, -1.30) fell -1.0% despite reporting better-than-expected profits for the third quarter; Netflix (NFLX 346.71, -17.99) tumbled-4.9% after an NBC News report showed that the WSJ is investigating the company’s corporate culture.
