Markets continue to be wobbly.
To start with, the Nikkei is falling to a 2-month low, following a down-day in the US.
The big event, of course, in the US was the release of the minutes from the last FOMC meeting, which were generally interpreted as suggesting that the Fed’s “tapering” (commencement of a slowdown in bond purchases) would begin in September.
This coincided with a rise in US interest rates that continues this evening, as the yield on the 10-year Treasury hits 2.9%, the highest level in 2 years.
All of this is part of a cycle we’re seeing in markets, whereby taper/higher interest rates are causing dollar strength, and violent emerging market weakness, as money whooshes back out.
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