All the action on Wednesday was in the stock markets, which saw the biggest daily decline since April, with the sell-off intensifying into the NY close as markets become increasingly unnerved by the rising US Treasury yields, which along with the current US trade policy and the threat of tariffs sent investors fleeing for safety.
In the currency space, the Jpy was in demand on safe haven grounds, while elsewhere the US$ was choppy but under some pressure against the Euro and Cable amid growing investor optimism for a Brexit deal. On the other hand, the Aud and Kiwi remain heavy, not helped by the risk-off stance and look to be headed lower.
WTI also took a hit, down by 2.8%, despite the threats to crude supply from Hurricane Michael and Iranian sanctions, which were outweighed by worries about the hawkish US monetary policy and the possible slowdown in world growth that sent stocks lower. The metals were choppy and ended up mostly unchanged.
Thursday kicks off with the NZ Food Price Index (Sept), Australian Consumer Inflation Expectation (Oct) and a speech from the RBA’s Ellis. This will be followed in Europe by the UK BOE Credit Conditions Survey and the ECB Monetary Policy Minutes, while the main focus of the day will be on the US CPI (Sept – exp 2.8%, Ex F/E; 2.3%), as well as the weekly US Jobless Claims.
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