From Marc Chandler at Bannockburn Global Forex:
Overview: At the end of last week, there was much talk about Black Monday and today it is here. Various circuit breakers kicked in as stocks plummeted. The Nikkei 225 fell 7.8%, and while China's CSI 300 fell 7.05%, the index of mainland shares that trading in Hong Kong dropped 13.75%. The Hang Seng itself was down 13.2%. Europe's Stoxx 600 fell 5.1% before the weekend and is off another 5.8% today. US index futures settled on their lows before the weekend and are poised to gap lower today. It would be third consecutive gap lower opening, which in some reckoning in technical analysis is often a sign of capitulation. The equity sell-off is giving a bid to the bond markets. The yield of the 10-year JGB fell 7-8 bp and now is about 50 bp off its recent high slightly below 1.09%. European benchmark yields are off mostly 2-8 bp but the 10-year German Bund yield is off 12 bp and the Dutch benchmark is off 10 bp. Peripheral premiums are widening at lower absolute yields. The 10-year US Treasury is off five basis points to a little through 3.95%.
The US dollar is mixed in choppy trading. The Swiss franc and Japanese yen are the best performers, rising more than 1% and 0.7%, respectively. The euro is little changed. However, the risk currencies, which among the G10 are the dollar-bloc and Scandi currencies, and they are under pressures. The Scandis are off more than 1%, while the Antipodeans are down 0.7-0.8%, and the Canadian dollar is nursing a 0.3% decline. After the Russian ruble's 1.75% loss, the Mexican peso is the second-weakest emerging market currency with a 1.7% decline. The peso trade 24-hours a day and is sometimes used as a proxy for emerging market currencies. The main exceptions in the emerging market space today are the Taiwanese dollar and Czech koruna, both posting minor upticks. There are some reports suggesting Taiwan's central bank may have intervened earlier today. Gold set a record last Thursday near $3168 and reached a low near $2971 today before rebounding to $3055. It is consolidating in a $3013-$3035 range in the European morning. OPEC+ plan to boost output next month by more than expected, and Saudi's sharp cut in next month's sales price, coupled with recession fears, have seen May WTI crater to about $59 a barrel. In the middle of last week, it reached nearly $73.30. It is back to levels last seen in late 2021.
USD: The Dollar Index finished strong relative to the day's range before the weekend, but it did lose around 1% on the week and returned to lows not seen since last October. Last week's low could prove to be the climactic low from a sell-off that began a week before the inauguration from 110.00 to reach almost 101.25....
....MUCH MORE
