Markets: Gold down $2 to $1837 WTI crude down $1.02 to $84.78 US 10-year yields down 1 bps to 1.827%S&P 500 down 50 points to 4482
Markets:
- Gold down $2 to $1837
- WTI crude down $1.02 to $84.78
- US 10-year yields down 1 bps to 1.827%
- S&P 500 down 50 points to 4482
- AUD leads, EUR lags
This was a disappointing day for the bulls and anyone optimistic about global growth in 2022. The Chinese rate cut helped to kick off a positive day and US equities initially reacted very positively, with the Nasdaq up 2%. That was mirrored in FX with the commodity currencies rallying, led by AUD/USD.
It didn’t last.
The selling crept into US stocks after Europe closed and then accelerated late in the day in a brutal turnaround.
FX was able to ignore the volatility up to a certain extent but it was a full-on flight to safety late. AUD/USD sank to 0.7220 from 0.7275 at the highs. Incredibly, AUD/JPY was able to battle to a standstill on the day, in large part due to the earlier strong jobs report from Australia.
Keep a close eye on USD/CAD. Oil finally relented today and the pair ran to 1.2514 after carving out a double bottom at 1.2450 in the past two days.
Cable continues to be a close mirror of the risk trade as it turned a solid gain at the time of the London fix at 1.3661 down to 1.3593.
The euro continues to give back all of last week’s gain. Bunds traded positive but fell back underwater and the pair sank back to 1.1300 after touching 1.1475 on Friday.
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