From Marc to Market:
Overview: Equities remain under pressure as investors contemplate tighter financial conditions and the risks of recession. Most of the large equity markets in the Asia Pacific region sold-off, led by a 2.7% drop in Taiwan. Australia managed to buck the trend and managed a small gain. Europe’s Stoxx 600 is off by about 0.2% near midday after a 0.5% loss yesterday. US futures are lower and are threatening a gap lower opening for the S&P 500 and NASDAQ. Bonds are rallying. The US 10-year yield is off almost 8 bp and is slipping below 2.92% after a similar move yesterday. It closed at 3.08% last week after the employment report. European benchmark yields are off 9-13 bp with the peripheral premiums widening a little. The dollar rides higher, and the euro tested parity for the first time in 22 years. The drop in yields is helping the yen resist the dollar’s pull and it is the only major currency rising against the greenback today. Outside of the Russian rouble, no emerging market currency is rising today. The Hungarian forint and Polish zloty are the weakest, off more than 1%, followed by the Mexican peso, falling by 0.9%.
Gold buckled to about $1723.30 today as a new low has steadied in Europe and is a little higher on the day near $1735.50. August WTI is off about $2.50 but is holding above yesterday’s low (~$100.90). A break of $100 could spur a test on last week’s low closer to $95. US natgas is up 1.3% after yesterday’s 6.5% jump. Europe’s benchmark has surged 5.5% today after falling nearly 12% over the past two sessions. Covid concerns took another 4.5% from iron ore today after yesterday’s 2.5% decline. September copper is off more than 2%. It fell around 4% in the past two sessions. It has fallen by about a third since the March peak. September wheat reversed yesterday and fell by almost 4%. It is down another 1.4% now....
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