Wakey Wakey!!
Markets have kicked into life today, with US equity indices tumbling from their elevated perch. Falling by approximately 2% across the board, the sell off across the Atlantic has left a risk-off feel within markets, with investors flocking to safety. From the two graphs below, investors’ concerns can be clearly seen. The first graph shows both the NASDAQ Composite Index (Blue) and the NYSE Composite Index (Orange) in relative freefall, shedding hundreds of billions of Dollars from the value of US companies. In the second chart, the value of Gold, a traditional safehaven immune from the swings of more volatile and risky assets, can be seen to rise by 0.5% as rising demand unbalanced yesterday’s value.
   
The rally in safehavens and the selling of more risky assets, including emerging market currencies, has been precipitated by concerns that the trade war between the US and China, the effect of which had started to be priced out, may be reigniting. With the arrest of the Chief Financial Officer of one of China’s largest companies with a market cap larger than that of Apple and with considerable reach within the United States of America, there have been market-wide fears that the ceasefire between the two trading leviathans could be called off and tariffs ramped up once again. Within the Pound, developments in Westminster continue to cause disturbances. The Pound has received a bid today as the possibility of a no-deal Brexit seems increasingly unlikely. Whilst a second referendum would also contribute to political uncertainty, the increasing improbability of Carney’s chaotic no-deal scenario continues to support the Pound.
Today’s Global Market:
Â
Discussion and Analysis by Charles Porter
Click Here to Subscribe to the SGM-FX Newsletter
Related Insights
Daily Brief – Two tales of a weaker Dollar
Charles Porter
Thu 5 Sep 2024
Two tales of a weaker Dollar As the week that should decide the fortune of the US Dollar continues to unfold, this brief looks at the two very different legacies of a weaker Dollar. For emerging markets-EM and other high beta currency classes, a weaker Dollar can both act as a tail wind and a […]
Daily Brief – Not just about rates
Charles Porter
Tue 10 Sep 2024
The focus of next week’s Bank of England-BoE decision will not just be about benchmark interest rates. At a time when central bank meetings are most often scrutinised for clues regarding the outlook for domestic interest rates, this particular BoE meeting will have an important distraction. The next monetary policy decision is due next Thursday. […]
Daily Brief – Enough Labour Already!
Charles Porter
Tue 3 Sep 2024
Enough Labour Already! And no, I’m not talking about UK politics here. Despite the new UK government attracting significant attention in markets and the press ahead of the awaited/feared Autumn budget, this briefing is about the labour market. This week holds in store a plethora of US labour market data which is likely the biggest […]
