Global stock markets are generally in risk-on mode today, riding on speculation of Fed rate cut. As Chair Jerome Powell indicated his openness on the topic yesterday, an insurance cut could come as soon as in September if US trade wars, with China and others, escalate. However, it’s also pointed out that Powell just said Fed would “act as appropriate” only, without specifically talking about a cut. Impacts of trade wars could be rather complicated, in particular if Mexico is dragged into it. Trump could claim China subsidizes its products so there is no lift in inflation. But it’s unsure if he thinks Mexico will do the same.
Anyway, entering into US session, Yen is the weakest one for today despite falling treasury yields. German 10-year bund yield has indeed hit another record low at -0.226. Australian Dollar is the second weakest one, followed by Sterling. New Zealand Dollar is the strongest one, followed by Euro. A lot of key events lie ahead, including ADP, ISM services, ECB tomorrow, and job data from US and Canada on Friday. A rough ride ahead is likely.
In Europe, currently:
- FTSE is up 0.49%.
- DAX is up 0.36%.
- CAC is up 0.56%.
- German 10-year yield is down -0.0108 at -0.217.
Earlier in Asia:
- Nikkei rose 1.80%.
- Hong Kong HSI rose 0.50%.
- China Shanghai SSE dropped -0.03%.
- Singapore Strait Times rose 0.61%.
- Japan 10-year JGB yield dropped -0.0249 to -0.126
