It has been a breathtaking day for financial markets, no matter where you are in the world. Australia was no exception.
The UK decision to leave the European Union — a shock to markets who were all but certain that such an outcome was unlikely to occur — has shaken stocks, hammered the Aussie dollar and seen benchmark 10-year bond yields tumble to all-time record lows.
And a rate cut from the Reserve Bank of Australia is now seen as a certainty in the next couple of months.
Words don’t do it justice. It was certainly was not how many expected markets to end the week: the UK would vote to remain in the EU, and a relief rally across risk assets was to ensue.
Australia’s benchmark stock index, the ASX 200, finished trade nursing a loss of 3.17%. It was the largest one-day percentage fall since September 29 last year, and left the index trading at the lowest level seen since April 14.
Like the headline index, there was carnage across all sectors, with the noticeable exception of the All Ordinaries Gold index which surged by 9%. Telecommunications also outperformed, only falling 0.12%.
- A-REITS -1.96%
- CONSUMER DISCRETIONARY -2.67%
- CONSUMER STAPLES -2.85%
- ENERGY -3.88%
- FINANCIALS -3.81%
- HEALTHCARE -2.12%
- INDUSTRIALS -2.16%
- INFORMATION TECHNOLOGY -4.70%
- MATERIALS -3.64%
- TELECOMMUNICATIONS -0.12%
- UTILITIES -1.69%
- ALL ORDS GOLD INDEX 9.00%
After touching a high of .7648 earlier in the session, which followed yet another poll showing the UK was likely to vote to remain in the EU, the AUD/USD slid to as low as .7308.
Currently it’s trading at .7380, a decline of 3% for the session. It is currently on track to record it’s largest daily decline since September 22, 2011.
Against the British pound the Aussie surged by more than 6%, courtesy of an enormous 9% decline in the GBP/USD. The latter currently trades at the lowest level seen in over 30 years.
Australian 10-year bond yields also fell to fresh all-time lows below 2%. They have subsequently bounced back above this level in recent trade.
As a result of the market carnage, Australian cash rate futures now put the odds of a 0.25% rate cut in August at 96%. The market reaction in coming days will determine whether that will occur, or indeed, arrive even earlier.
Here’s the full Asia market scoreboard as at 4.15pm AEST. Truly a day that no one in financial markets will ever forget.
- ASX 200 5113.20 , -167.48 , -3.17%
- Nikkei 225 14952.02 , -1286.33 , -7.92%
- Shanghai Composite 2852.78 , -39.18 , -1.35%
- Hang Seng 19894.11 , -974.23 , -4.67%
- KOSPI 1925.24 , -61.47 , -3.09%
- Straits Times 2734.91 , -58.94 , -2.11%
- S&P 500 Futures 2004.25 , -101.50 , -4.82%
- USD/JPY 102.78 , -3.35 , -3.16%
- USD/CNY 6.6318 , 0.0489 , 0.74%
- AUD/USD 0.7373 , -0.0235 , -3.09%
- NZD/USD 0.7046 , -0.0204 , -2.81%
- AUD/JPY 75.78 , -4.96 , -6.14%
- EUR/USD 1.1072 , -0.0313 , -2.75%
- GBP/USD 1.3706 , -0.1172 , -7.88%
- USD INDEX 96.001 , 2.4720 , 2.64%
- Gold $1,314.91 , $59.66 , 4.75%
- Silver $17.67 , $0.40 , 2.30%
- WTI Futures $47.41 , -$2.70 , -5.39%
- Copper Futures ¥35,990 , -¥180 -0.50%
- Iron Ore Futures ¥387.00 , -¥0.50 , -0.13%
10-Year Bond Yields
- Australia 2.045%
- New Zealand 2.390%
- Japan -0.191%
- Germany -0.133%
- UK 1.363%
- US 1.497%
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