Monday was not a good session for Asian markets. Stocks, commodities, bonds and higher-yielding currencies were all under the pump.
One look at the scoreboard below tells the story.
All major stock indices finished down by around 2%, following the move in US markets on Friday. As was the case then, the moves today were driven by a shift in investor sentiment towards the outlook for central bank policy.
All of a sudden a US rate hike, perhaps as soon as September 21, is now seriously being considered by investors. Hopes for further stimulus from the ECB, BOJ and BOE, among others, is also being questioned.
Given the potential for a shift in central bank dynamics, commodities were in the wars with bulk and base commodities under pressure, as were crude oil futures.
Precious metals, assisted by skittish sentiment, traded mixed with gold up and silver down.
This is despite the US dollar index trading fractionally weaker, thank largely to inflows into the euro and Japanese yen, currencies favoured to fund carry trades into higher-yielding assets.
Government bond yields, at the epicentre of recent markets moves, were also under pressure, although the recent bout of market volatility kept losses in check in Asia.
Given the focus on future central bank policy, there’s going to be plenty of attention on upcoming speeches from US Federal Reserve officials that will arrive in the coming hours.
Here’s the final scoreboard. It doesn’t make for pleasant viewing, unless you’re short risk assets, of course.
- ASX 200 5219.60 , -119.58 , -2.24%
- Nikkei 225 16672.92 , -292.84 , -1.73%
- Shanghai Composite 3020.94 , -57.92 , -1.88%
- Hang Seng 23445.04 , -654.66 , -2.72%
- KOSPI 1991.48 , -46.39 , -2.28%
- S&P 500 Futures 2110.75 , -12.00 , -0.57%
- USD/JPY 102.2 , -0.48 , -0.47%
- USD/CNY 6.6873 , -0.0081 , -0.12%
- AUD/USD 0.7525 , -0.0013 , -0.17%
- NZD/USD 0.7310 , -0.0014 , -0.19%
- AUD/JPY 76.91 , -0.50 , -0.65%
- EUR/USD 1.1258 , 0.0029 , 0.26%
- GBP/USD 1.3274 , 0.0012 , 0.09%
- USD INDEX 95.126 , -0.2100 , -0.22%
- Gold $1,329.95 , $2.26 , 0.17%
- Silver $19.02 , -$0.01 , -0.07%
- WTI Futures $45.13 , -$0.75 , -1.63%
- Copper Futures ¥36,200 , -¥410 -1.12%
- Iron Ore Futures ¥421.00 , -¥10.50 , -2.43%
10-Year Bond Yields
- Australia 2.114%
- New Zealand 2.455%
- Japan -0.013%
- Germany 0.036%
- UK 0.876%
- US 1.675%
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