The global stocks are trying to find a solid ground to stand on after several days of a powerful downside correction. The broad-based S&P500 index futures fell under the ice below 3,300 points during the Asian early trading hours on Wednesday, weighing down also the Shanghai Composite (SSEC) index, which slipped by 1.86% beneath the water today.
Renewed fears of a possible U.S. Debt selloff by China shook the market after Beijing-based Global Times tabloid newspaper under the auspices of the Chinese Communist Party published an article last Thursday quoting Xi Junyang, a professor at the Shanghai University of Finance and Economics, that was saying that “China will gradually decrease its holdings of U.S. debt to about $800 billion under normal circumstances”.
Xi Junyang has not provided any timeframe of such possible selloff. But, he added that “China might sell all of its U.S. bonds in an extreme case, like a military conflict.
Today, the market sentiment is being
risk-averse. After the strong correction of last week's indices, eyes are
on the opening of the North American market.
European and US equities futures are in negative
territory this Tuesday, with tech stocks remaining vulnerable as Nasdaq futures retreat
almost 1.5 %.
Hopes for a vaccine for Covid-19 after Donald Trump’s
comments, that a treatment may be ready as early as October, may weigh on the
dollar, while the US-China tensions give some support to the currency.
This Monday resembles a day off work on global markets, due to the Labour Day in the United States and Canada. The New York Stock Exchanges (NYSE) as well as high-tech Nasdaq stocks are closed, so the U.S.-listed shares are not traded today. In the last few days, the relative strength of downside correction's volatility in stock prices was also the main driver for all currency pairs, but especially for the forex market instruments with the U.S. Dollar participance.
U.S. stocks have made a nasty surprise on Thursday to a densely populated and cold bullish camp, which was sleeping the peaceful sleep that knew no waking for several weeks. However, this time the share prices forced some sobriety on that snoring crowd while many investors were staring with wonder watching the high tech Nasdaq 100 index going down by more than 600 points for one trading session. Futures quotes for the main U.S. technology sector index crashed falling almost 200 points more during the first Pacific hours.
stocks rushed after the next wave of the U.S. indexes rally. The German DAX30
index is specifically shining on Wednesday to come as close as possible to its
summer peak and it claims to get the highest closing price of the day since the
pre-coronavirus period. This happened despite a monthly decline of 0.9% in
German retail sales data, with an annual growth of 4.2% after 5.9% published in
the beginning of August, but the last value was revised up to 6.7% today,
according to the report of German statistics. The German manufacturing
purchasing managers index (PMI) came at 52.
assets inspire crude prices. The upward trend in Brent crude benchmark lifted
prices up to the $46 per barrel mark. This week Brent crude attempted to
conquer important resistance level of $46.2 per barrel that was pinned before
as a post pandemic high. However, major drivers of crude rally are beyond oil
market itself. The primary driver is the Federal Reserve (Fed) intention to
skip the inflation target of 2% while maintaining control over interest rates.
That means interest rates may remain at ultra-low levels for a long term even
if the inflation will exceed 2%.
and global stocks continue to follow the trend set by the speech of the U.S.
Federal Reserve (Fed) Chairman Jerome Powell at the Jackson Hole Symposium last
Thursday. In particular, the U.S. Dollar index futures for September (DXU0)
updated the low of the year in early Asian hours today, and is closely
approaching another psychological mark of 92 points, which is a minimum price
since May 2018.
Today is a
day of greater risk appetite as investors bet on more accommodative monetary
and fiscal policies on a global scale, also motivated by signs of progress in a
coronavirus vaccine and easing trade tensions between the US and China.
The dollar is
rising on today’s Asian session, as the improving global economy and the lack
of progress in U.S. fiscal stimulus weigh on this currency.
longer-term Treasuries retreated on Friday after investors processed data from
the U.S. economy following the Federal Reserve's historic change of direction
in the monetary policy framework.
stocks today did not immediately join the new acceleration of the American
market's rally. The U.S. S&P500 broad market index updated its all-time
peak above 3,500 points in early Asian hours and kept most of the fresh gains
before the Old World's trading start. But the pan-European Euro Stoxx 50 index
and the German DAX30 slipped at the open on Friday as a response to a
disappointing GfK Consumer Climate indicator from Germany, which remained in
negative territory falling to -1.8 points from an upwardly revised -0.2 points