Market Brief, Friday, 4th of September, 2020
The major US indices declined sharply following a nosedive in the tech-sector with risk-off sentiment prevailing as market participants are awaiting today’s payroll data. The Nasdaq declined by more than 6% even though it is now off its worst levels.
In Asia, equity markets followed the decline of their US counterparts with the ASX down 3%, and the Nikkei down 1.3%. In China, the Hang Seng and Shanghai composite were down by 1.8 and 1.4% respectively following a liquidity drain by the PBOC.
The bloodbath in equities saw bond yields tumble with the US 10 year treasury yields falling back down to 60 basis points and the curve flattening.
The dollar index retraced some of its gains which saw it fall below the 93 levels. This follows the major moves in the equity and bond markets. The EURUSD is currently trading around the 1.1850 level while the GBPUSD around the 1.3280 level.
WTI and Brent continued their recent slide down to 41$ per barrel and 43.65$ per barrel respectively as worries about demand are overwhelming the recent decline in inventories.
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