Volatility Rises Again in Markets – Nasdaq Down 0.9%
It was another volatile day in financial markets yesterday as risk sentiment continued to take a hit before a higher US GDP print came through with a bit of stability. US tech stocks were again hit with both the Nasdaq and S&P losing ground on the day, down 0.93% and 0.51% respectively, whilst the Dow pushed 0.22% higher. US treasury yields again saw a disparity between the long and short dated bonds, but widening the gap again this time, the 2-year gaining 2.5 basis points up to 4.441% and the 10-year dropping 2.8 basis points to 4.258%. Oil prices pushed higher again, Brent adding 0.81% to trade up to $82.37 a barrel and WTI gaining 0.89% to move back to $78.28 a barrel. Gold again saw big profit taking flows and lost 1.8% on the day to close at $2,355.
Aussie in Free Fall as Risk Sentiment is Hit
All the talk this week in the FX world has been about the Yen, but those trading the Aussie dollar have had a rough time of it as well. The Aussie has dropped over 4% against the big dollar since it hit multi-month highs on July 11, and it has taken an even bigger hit against the Yen losing over 9% from the same data. There has been little in the way of respite on the way down and any brief rallies have been hit hard with the usual exporter flow doing little to stem the tide. The move has coincided with a drop across commodities and until we see a change in commodity’s outlook or indeed the global risk story, the traders are anticipating more downside the currency. Support now comes in on the overnight low around 0.6510 with longer term support all the way down at 0.6420 and resistance now sits with the 200-day moving average at 0.6660.
Another Busy Day is Set to Close the Trading Week
It was another rollercoaster trading day yesterday with volatility hitting all markets and it doesn’t look like stopping in the last three sessions of the week. Inflation data is set to dominate market focus today with key updates due out of Tokyo and the US. We are due to have the latest Tokyo CPI numbers out early in the Asian session but the real focus for the day will come once New York opens and we have the latest update on the Fed’s favoured inflation metric, the Core PCE Price Index. Expectation is for a 0.2% increase and anything significantly off this print will see more moves in the market. The revised University of Michigan Consumer Sentiment and Inflation Expectations are also due out and traders will keep a wary eye on any updates from the latest G20 meeting that kicks off in Rio de Janeiro.
